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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-K

 

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

For the fiscal year ended December 31, 2010

OR

 

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

For the transition period from                     to                     

Commission File 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)

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act: NONE

 

 

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   ¨     No   x

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes   x     No   ¨

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ¨     No   x

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     x

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   ¨    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 aggregate market value of the voting and non-voting common equity held by non-affiliates as of the close of business on December 31, 2010 was zero.

The number of shares outstanding of the Registrant’s common stock, $0.01 par value, as of March 1, 2011 was 100.

DOCUMENTS INCORPORATED BY REFERENCE

None.

 

 

 


Table of Contents

Table of Contents

 

     Page  

Introductory Note

     1   

Special Note Regarding Forward-Looking Statements

     3   

Trademarks and Service Marks

     6   

Market and Industry Data and Forecast s

     6   
PART I      

Item 1.

   Business      7   

Item 1A.

   Risk Factors      26   

Item 2.

   Properties      47   

Item 3.

   Legal Proceedings      47   

Item 4.

   Removed and Reserved      49   
PART II      

Item 5.

   Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.      50   

Item 6.

   Selected Financial Data      50   

Item 7.

   Management’s Discussion and Analysis of Financial Condition and Results of Operations      53   

Item 7A.

   Qualitative and Quantitative Disclosures about Market Risk      100   

Item 8.

   Financial Statements and Supplementary Data      101   

Item 9.

   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure      101   

Item 9A(T).

   Controls and Procedures      101   

Item 9B.

   Other Information      102   
PART III      

Item 10.

   Directors, Executive Officers and Corporate Governance      103   

Item 11.

   Executive Compensation      108   

Item 12.

   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters      128   

Item 13.

   Certain Relationships and Related Transactions, and Director Independence      132   

Item 14.

   Principal Accounting Fees and Services      141   
PART IV      

Item 15.

   Exhibits, Financial Statements and Schedules      143   

SIGNATURES

     144   

Supplemental Information to be Furnished with Reports Filed Pursuant to Section  15(d) of the Act by Registrants which have not Registered Securities Pursuant to Section 12 of the Act

     145   

Financial Statements and Notes

     F-1   

Exhibit Index

     G-1   

 

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INTRODUCTORY NOTE

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. “Holdings” refers to our indirect parent company, Domus Holdings Corp.

Financial information and other data identified in this Annual Report as “pro forma” give effect to the Refinancing Transactions (as defined below) as if they occurred on December 31, 2010.

The term “Existing Notes” refers, collectively, to the 10.50% Senior Notes due 2014 (the “10.50% Senior Notes”), the 11.00%/11.75% Senior Toggle Notes due 2014 (the “Senior Toggle Notes”) and the 12.375% Senior Subordinated Notes due 2015 (the “12.375% Senior Subordinated Notes”).

The term “Extended Maturity Notes” refers, collectively, to the 11.50% Senior Notes due 2017, the 12.00% Senior Notes due 2017 and the 13.375% Senior Subordinated Notes due 2018 issued in the Debt Exchange Offering described below.

The term “Convertible Notes” refers, collectively, to the 11.00% Series A Convertible Notes due 2018, the 11.00% Series B Convertible Notes due 2018 and the 11.00% Series C Convertible Notes due 2018 issued in the Debt Exchange Offering described below.

The term “New Notes” refers, collectively, to the Extended Maturity Notes and the Convertible Notes.

The term “Unsecured Notes” refers, collectively, to the Existing Notes and the New Notes.

The term “First and a Half Lien Notes” refers to the 7.875% Senior Secured Notes due 2019 described below.

***

Debt Exchange Offering

On January 5, 2011, we completed private exchange offers under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), relating to its outstanding Senior Notes, Senior Toggle Notes and Senior Subordinated Notes (the “Debt Exchange Offering”). As a result of the Debt Exchange Offering, approximately $2,110 million aggregate principal amount of Existing Notes were tendered for Convertible Notes, approximately $632 million aggregate principal amount of Existing Notes were tendered for Extended Maturity Notes and approximately $303 million aggregate principal amount of Existing Notes remained outstanding.

Amendment to Senior Secured Credit Facility

Effective February 3, 2011, we entered into a first amendment to our senior secured credit facility (the “Senior Secured Credit Facility Amendment”) and an incremental assumption agreement, which resulted in the following: (i) extended the maturity of a significant portion of our first lien term loans to October 10, 2016 and increased the interest rate with respect to the extended term loans; (ii) extended the maturity of a significant portion of the loans and commitments under our revolving credit facility to April 10, 2016, increased the interest rate with respect to the extended revolving loans and converted a portion of the extended revolving loans to extended term loans ($98 million in the aggregate); (iii) extended the maturity of a significant portion of the commitments under our synthetic letter of credit facility to October 10, 2016 and increased the fee with respect to the extended synthetic letter of credit commitments; and (iv) allowed for the issuance of $700 million aggregate principal amount of First and a Half Lien Notes, the net proceeds of which, along with cash on hand, were used to prepay $700 million of the outstanding extended term loans.

 

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Additionally, the Senior Secured Credit Facility Amendment provides that the First and a Half Lien Notes will not constitute senior secured debt for purposes of calculating the senior secured leverage ratio maintenance covenant under our senior secured credit facility.

Issuance of First and a Half Lien Notes

On February 3, 2011, the Company issued $700 million aggregate principal amount of First and a Half Lien Notes in a private offering exempt from the registration requirements of the Securities Act. The First and a Half Lien Notes are secured by substantially the same collateral as the Company’s existing secured obligations under its senior secured credit facility, but the priority of the collateral liens securing the First and a Half Lien Notes is (i) junior to the collateral liens securing the Company’s first lien obligations under its senior secured credit facility and (ii) senior to the collateral liens securing the Company’s second lien obligations under its senior secured credit facility.

As discussed above, the net proceeds from the offering of the First and a Half Lien Notes, along with cash on hand, were used to prepay $700 million of certain of the first lien term loans that were extended in connection with the Senior Secured Credit Facility Amendment.

As used in this Annual Report, the term “Refinancing Transactions” refers to, collectively, (1) the Debt Exchange Offering, (2) the Senior Secured Credit Facility Amendment, and (3) the issuance of First and a Half Lien Notes, all as more fully described in Note 20—“Subsequent Events” to the consolidated financial statements.

 

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SPECIAL NOTE REGARDING 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. (collectively with their affiliates, “Apollo”) and the related financings (the “Merger Transactions”). Since 2007, we have needed to incur additional debt in order to fund negative cash flows. After giving effect to the Refinancing Transactions, as of December 31, 2010, our total debt (excluding the securitization obligations) would have been $7,007 million. The industry and economy have experienced significant declines since the time of the Merger 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 December 31, 2010 and the ratio limit steps down to 4.75 to 1 on March 31, 2011 and thereafter. For the fiscal year ended December 31, 2010, we were in compliance with the senior secured leverage ratio covenant with a ratio of 4.59 to 1.0. After giving effect to the Refinancing Transactions, our senior secured leverage ratio would have been 3.51 to 1.0 at December 31, 2010. While the housing market in 2010 showed signs of stabilization, in part due to government actions designed to bolster the housing market, there remains substantial uncertainty with respect to the timing and scope of a housing recovery and if a housing recovery is delayed 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;

 

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

 

   

increasing mortgage rates and down payment requirements and/or reduced availability of mortgage financing, including but not limited to the potential impact of various provisions of the Dodd-Frank Act and regulations which may be promulgated thereunder relating to mortgage financing, including restrictions imposed on mortgage originators as well as retention levels required to be maintained by sponsors to securitize mortgages;

 

   

legislative, tax or regulatory changes that would adversely impact the residential real estate market, including but not limited to potential reform relating to Fannie Mae, Freddie Mac and other government sponsored entities that provide liquidity to the U.S. housing and mortgage markets;

 

   

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 regional home inventory levels;

 

   

the inability or unwillingness of homeowners to enter into homesale transactions due to negative equity in their existing homes;

 

   

lower home ownership rates in the U.S. due to various factors, including, but not limited to, high unemployment levels, reduced demand or preferred use by households of rental housing due in part to uncertainty regarding future home values;

 

   

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;

 

   

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;

 

   

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;

 

   

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;

 

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disputes or issues with entities that license us their trade names 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 (“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 described under “Item 1A—Risk Factors” and “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report, may also cause actual results to differ materially from those described in 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 this Annual Report, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

 

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TRADEMARKS AND SERVICE MARKS

We own or have rights to use the trademarks, service marks and trade names that we use in conjunction with the operation of our business. Some of the more important trademarks that we own or have rights to use that appear in this Annual Report include the CENTURY 21 ® , COLDWELL BANKER ® , ERA ® , THE CORCORAN GROUP ® , COLDWELL BANKER COMMERCIAL ® , SOTHEBY’S INTERNATIONAL REALTY ® and BETTER HOMES AND GARDENS ® marks, which are registered in the United States and/or registered or pending registration in other jurisdictions, as appropriate, to the needs of our relevant business. Each trademark, trade name or service mark of any other company appearing in this Annual Report is owned by such company.

MARKET AND INDUSTRY DATA AND FORECASTS

This Annual Report includes data, forecasts and information obtained from independent trade associations, industry publications and surveys and other information available to us. Some data is also based on our good faith estimates, which are derived from management’s knowledge of the industry and independent sources. As noted in this Annual Report, the National Association of Realtors (“NAR”), the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) were the primary sources for third-party industry data and forecasts. 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 use data based on actual reported 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. Historical NAR data is subject to periodic review and revision. NAR has recently issued a press release disclosing that it is engaged in a review of its sampling and methodology processes with respect to existing homesale data to ensure accuracy. NAR expects to conclude this analysis and publish any revisions in the summer of 2011. Any such changes could result in downward revisions of NAR’s historical national survey data but would have no impact on Realogy’s reported financial results or driver information.

Forecasts regarding rates of home ownership, median sales price, volume of homesales, and other metrics included in this Annual Report to describe the housing industry are inherently uncertain or speculative in nature and actual results for any period may materially differ. Industry publications and surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but such information may not be accurate or complete. We have not independently verified any of the data from third-party sources nor have we ascertained the underlying economic assumptions relied upon therein. Statements as to our market position are based on market data currently available to us. While we believe that the industry data presented herein are derived from the most widely recognized sources for reporting U.S. residential housing market statistical data, we do not endorse or suggest reliance on this data alone but provide the data as a benchmark for the industry.

We believe our internal research is reliable, even though such research has not been verified by any independent sources.

 

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PART I

 

Item 1. Business.

Our Company

We are one of the preeminent and most integrated providers of real estate and relocation services. We are the world’s largest real estate brokerage franchisor, the largest U.S. residential real estate brokerage firm, the largest U.S. provider and a leading global provider of outsourced employee relocation services and a provider of title and settlement services. Through our portfolio of leading brands and the broad range of services we offer, we have established our company as a leader in the residential real estate industry, with operations that are dispersed throughout the U.S. and in various locations worldwide. We derive the vast majority of our revenues from serving the needs of buyers and sellers of existing homes, rather than serving the needs of builders and developers of new homes. We were incorporated on January 27, 2006 in the State of Delaware.

We report our operations in four segments: Real Estate Franchise Services, Company Owned Real Estate Brokerage Services, Relocation Services and Title and Settlement Services.

Segment Overview

Real Estate Franchise Services : Through our Real Estate Franchise Services segment, or RFG, we are a franchisor of some of the most recognized brands in the real estate industry. As of December 31, 2010, our franchise system had approximately 14,700 offices (which included approximately 750 of our company owned and operated brokerage offices) and 264,000 independent sales associates operating under our franchise and proprietary brands in the U.S. and 99 other countries and territories around the world (internationally, generally through master franchise agreements). In 2010, based on NAR’s historical survey data and our own results, we were involved, either through our franchise operations of our franchisees or our company owned brokerages, in approximately 23% of all existing homesale transaction volume (sides times average sales price) for domestic transactions involving a real estate brokerage firm. As of December 31, 2010, we had approximately 3,600 domestic franchisees, none of which individually represented more than 1% of our franchise royalties (other than our subsidiary, NRT LLC, or NRT, which operates our company owned brokerage business). We believe this reduces our exposure to any one franchisee. On average, our franchisee’s tenure with our brands is 18 years as of December 31, 2010. Our franchise revenues in 2010 included $206 million of royalties paid by our company owned brokerage operations, or approximately 37% of total franchise revenues, which eliminates in consolidation. As of December 31, 2010, our real estate franchise brands were:

 

   

Century 21 ® —One of the world’s largest residential real estate brokerage franchisors, with approximately 8,000 franchise offices and approximately 121,000 independent sales associates located in the U.S. and 71 other countries and territories;

 

   

Coldwell Banker ® —One of the largest residential real estate brokerage franchisors, with approximately 3,300 franchise and company owned offices and approximately 89,700 independent sales associates located in the U.S. and 49 other countries and territories;

 

   

ERA ® —A residential real estate brokerage franchisor, with approximately 2,500 franchise and company owned offices and approximately 30,100 independent sales associates located in the U.S. and 41 other countries and territories;

 

   

Sotheby’s International Realty ® —A luxury real estate brokerage brand. In February 2004, we acquired Sotheby’s company owned offices and the exclusive license for the rights to the Sotheby’s Realty and Sotheby’s International Realty ® trademarks. Since that time, we have grown the brand from 15 company owned offices to approximately 550 franchise and company owned offices and approximately 11,800 independent sales associates located in the U.S. and 43 other countries and territories;

 

   

Better Homes and Gardens ® Real Estate —We launched the Better Homes and Gardens ® Real Estate brand in July 2008 under an exclusive long-term license from Meredith Corporation (“Meredith”) and

 

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have approximately 200 franchise offices and approximately 7,000 independent sales associates located in the U.S.; and

 

   

Coldwell Banker Commercial ® — A commercial real estate brokerage franchisor. Our commercial franchise system has approximately 160 franchise offices and approximately 2,100 independent sales associates worldwide. The number of offices and independent sales associates in our commercial franchise system does not include our residential franchise and company owned brokerage offices and the independent sales associates who work out of those brokerage offices that also conduct commercial real estate brokerage business using the Coldwell Banker Commercial ® trademarks.

We derive substantially all of our real estate franchising revenues from royalty fees received under long-term franchise agreements with our franchisees (typically ten years in duration for domestic agreements). The royalty fee is based on a percentage of the franchisees’ sales commission earned from real estate transactions, which we refer to as gross commission income. Our franchisees pay us royalty fees for the right to operate under one of our trademarks and to utilize the benefits of the systems and tools provided by our real estate franchise operations. These royalty fees enable us to have recurring revenue streams. In exchange, we provide our franchisees with support that is designed to facilitate our franchisees in growing their business, attracting new independent sales associates and increasing their revenue and profitability. We support our franchisees with dedicated branding-related national marketing and servicing programs, technology, training and education. We believe that one of our strengths is the strong relationships that we have with our franchisees, as evidenced by our franchisee retention rate of 95% in 2010. Our retention rate represents the annual gross commission income as of December 31 of the previous year generated by our franchisees that remain in the franchise system on an annual basis, measured against the annual gross commission income of all franchisees as of December 31 of the previous year.

Company Owned Real Estate Brokerage Services : Through our subsidiary, NRT, we own and operate a full-service real estate brokerage business in more than 35 of the largest metropolitan areas of the U.S. Our company owned real estate brokerage business operates principally under our Coldwell Banker ® brand as well as under the ERA ® and Sotheby’s International Realty ® franchised brands, and proprietary brands that we own, but do not currently franchise to third parties, such as The Corcoran Group ® . In addition, under NRT, we operate a large independent real estate owned (“REO”) residential asset manager, which focuses on bank-owned properties. At December 31, 2010, we had approximately 750 company owned brokerage offices, approximately 5,000 employees and approximately 44,000 independent sales associates working with these company owned offices. Acquisitions have been, and will continue to be, part of our strategy and a contributor to the growth of our company owned brokerage business.

Our company owned real estate brokerage business derives revenues primarily from gross commission income received serving as the broker at the closing of real estate transactions. For the year ended December 31, 2010, our average homesale broker commission rate was 2.48% which represents the average commission rate earned on either the “buy” side or the “sell” side of a homesale transaction. Generally in U.S. homesale transactions, the broker for the home seller instructs the closing agent to pay a portion of the sales commission to the broker for the buyer and keeps the remaining portion of the homesale commission. In addition, as a full-service real estate brokerage company, in compliance with applicable laws and regulations, including RESPA, we actively promote the services of our relocation and title and settlement services businesses, as well as the products offered by PHH Home Loans, LLC (“PHH Home Loans”), our home mortgage venture with PHH Corporation (“PHH”) that is the exclusive recommended provider of mortgages for our real estate brokerage and relocation service customers. All mortgage loans originated by PHH Home Loans are sold to PHH or other third party investors, and PHH Home Loans does not hold any mortgage loans for investment purposes or perform servicing functions for any loans it originates. Accordingly, our home mortgage venture structure insulates us from mortgage servicing risk. We own 49.9% of PHH Home Loans and PHH owns the remaining 50.1%. The Company is not the primary beneficiary and therefore our financial results only reflect our proportionate share of the venture’s results of operations which are recorded using the equity method.

 

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Relocation Services : Through our subsidiary, Cartus Corporation (“Cartus”), we are a leading global provider of outsourced employee relocation services and the largest provider in the U.S. We offer a broad range of world-class employee relocation services designed to manage all aspects of an employee’s move to facilitate a smooth transition in what otherwise may be a difficult process for both the employee and the employer.

Our relocation services business primarily offers its 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 moving services, visa and immigration support, intercultural and language training and group move management services. In addition to general residential housing trends, key drivers of our relocation services business are corporate spending and employment trends.

In January 2010, our relocation business acquired Primacy Relocation, LLC (“Primacy”), a relocation and global assignment management services company headquartered in Memphis, Tennessee with international locations in Canada, Europe and Asia. The acquisition enabled Cartus to re-enter the U.S. government relocation business, increase its domestic operations, as well as expand the Company’s global relocation capabilities. Effective January 1, 2011, the Primacy business operates under the Cartus name.

In 2010, we assisted in over 148,000 relocations in over 160 countries for approximately 1,500 active clients, including over 60% of the Fortune 50 companies as well as affinity organizations. Cartus has offices in the U.S. as well as internationally in Swindon and Richmond, United Kingdom, Canada, Hong Kong, Singapore, China, Germany, France, Switzerland and The Netherlands.

Clients pay a fee for the services performed and we also receive commissions from third-party service providers, such as real estate brokers and household goods moving service providers. The majority of our clients pay interest on home equity advances and nearly all clients reimburse all other costs associated with our services, including, where required, repayment of home equity advances and reimbursement of losses on the sale of homes purchased. We believe we provide our relocation clients with exceptional service which leads to client retention. As of December 31, 2010, our top 25 relocation clients had an average tenure of 18 years with us. In addition, our relocation services business generates revenue for our other businesses because the clients of our relocation services business often utilize the services of our franchisees and company owned brokerage offices as well as our title and settlement services.

Title and Settlement Services : In most real estate transactions, a buyer will choose, or will be required, to purchase title insurance that will protect the purchaser and/or the mortgage lender against loss or damage in the event that title is not transferred properly and to insure free and clear ownership of the property to the buyer. Our title and settlement services business, which we refer to as Title Resource Group (“TRG”), assists with the closing of a real estate transaction by providing full-service title and settlement (i.e., closing and escrow) services to customers, real estate companies, including our company owned real estate brokerage and relocation services businesses as well as a targeted channel of large financial institution clients including PHH. In addition to our own title settlement services, we also coordinate a nationwide network of attorneys, title agents and notaries to service financial institution clients on a national basis.

Our title and settlement services business earns revenues through fees charged in real estate transactions for rendering title and other settlement and non-settlement related services. We provide many of these services in connection with transactions in which our company owned real estate brokerage and relocation services businesses are participating. During 2010, approximately 39% of the customers of our company owned brokerage offices where we offer title coverage also utilized our title and settlement services. Fees for escrow and closing services are generally separate and distinct from premiums paid for title insurance and other real estate services. We also derive revenues by providing our title and settlement services to various financial institutions in the mortgage lending industry. Such revenues are primarily derived from providing our services to their customers who are refinancing their mortgage loans.

 

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We also serve as an underwriter of title insurance policies in connection with residential and commercial real estate transactions. Our title insurance underwriter is licensed in 25 states and Washington, D.C. Our title underwriting operation generally earns revenues through the collection of premiums on policies that it issues.

***

Our headquarters are located at One Campus Drive, Parsippany, New Jersey 07054 and our general telephone number is (973) 407-2000. We maintain an Internet site at http://www.realogy.com. Our website address is provided as an inactive textual reference. Our website and the information contained on that site, or connected to that site, are not incorporated by reference into this Annual Report.

Industry trends

Industry definition : We primarily operate in the U.S. residential real estate industry and derive the majority of our revenues from serving the needs of buyers and sellers of existing homes rather than those of new homes. Residential real estate brokerage companies typically realize revenues in the form of a commission that is based on a percentage of the price of each home sold. As a result, the real estate industry generally benefits from rising home prices and increased volume of homesales (and conversely is harmed by falling prices and decreased volume of homesales). We believe that existing home transactions and the services associated with these transactions, such as mortgage origination, title services and relocation services, represent the most attractive segment of the residential real estate industry for the following reasons:

 

   

The existing homesales segment represents a significantly larger addressable market than new homesales. Of the approximately 5.2 million homesales in the U.S. in 2010, NAR estimates that approximately 4.9 million were existing homesales, representing approximately 94% of the overall sales as measured in units; and

 

   

Existing homesales afford us the opportunity to represent either the buyer or the seller and in some cases both sides.

We also believe that the traditional broker-assisted business model compares favorably to alternative channels of the residential brokerage industry, such as discount brokers and “for sale by owner” for the following reasons:

 

   

A real estate transaction has certain characteristics that we believe are best-suited for full-service brokerages, including large monetary value, low transaction frequency, wide cost differential among choices, high buyers’ subjectivity regarding styles, tastes and preferences, and the consumer’s need for a high level of personalized advice, specific marketing and technology services and support given the complexity of the transaction; and

 

   

We believe that the enhanced service and value offered by a traditional agent or broker is such that using a traditional agent or broker will continue to be the primary method of buying and selling a home in the long term.

Cyclical nature of industry : The existing homesale real estate industry is cyclical in nature and has historically shown strong growth though it has been in a significant and lengthy downturn since the second half of 2005. According to NAR, the existing homesale transaction volume (the product of the median homesale price and existing homesale transactions) was approximately $849 billion in 2010 and grew at a compound annual growth rate, or CAGR, of 7.2% over the 1972-2010 period. In addition, based on information published by NAR:

 

   

With the exception of the price declines in 2007-2009, median existing homesale prices did not decline from the prior year in any year since 1973, including during four economic recessions, and from 1972 through 2010 median prices have increased at a CAGR of 5.0% (not adjusted for inflation);

 

   

Existing homesale units increased at a CAGR of 2.1% over the 1972-2010 period, during which period units increased 23 times on an annual basis, versus 15 annual decreases;

 

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There have been three instances since 1972 when existing homesale transaction volume declined for at least two consecutive years. The first period was from 1980 through 1982, when existing homesale transaction volume declined by more than 13% per year for three years. The second period was from 1989 through 1990 when existing homesale transaction volume declined by 1% in 1989 and 1990. More recently home sale transaction volume has been down every year since 2006 although the severity of the declines moderated in 2009 and 2010; and

 

   

Existing homesale transaction volume (based on median prices) has historically experienced significant growth following prior national economic and housing corrections.

The industry has been in a significant and lengthy downturn that initially began in 2005 after having experienced significant growth in the first half of the decade. Based upon data published by NAR, from December 2005 through December 2010, annual U.S. existing homesale units declined by 31% and the median price of U.S. existing homesale units declined by 21%. In response to the housing downturn, the U.S. government implemented certain actions during the past several years to assist in a stabilization and/or a recovery of the residential real estate market. These measures have included: (1) the placement of Fannie Mae and Freddie Mac in conservatorship in September 2008 and the funding of over $130 billion to these entities to backstop shortfalls in their capital requirements; (2) the establishment, and subsequent expansion and extension, of a federal homebuyer tax credit for qualified buyers (that, as extended, required signed contracts on or before April 30, 2010); (3) as part of a broader plan to bring stability to credit markets and stimulate the housing market, the purchase of mortgage-backed securities by the Federal Reserve in an attempt to maintain low mortgage rates; (4) the continuation of the 2008 higher loan limits for FHA, Freddie Mac and Fannie Mae loans through September 30, 2011; and (5) the availability of low-cost refinancing through Fannie Mae and Freddie Mac to certain homeowners negatively impacted by falling home prices, encouraging lenders to modify loan terms with borrowers at risk of foreclosure or already in foreclosure.

Based in part on these measures, during 2010, the residential real estate market has shown signs of stabilization although the second half of 2010 was weaker than the second half of 2009 and the first half of 2010 due to the expiration of the federal homebuyer tax credits. As of January 2011, NAR reported that existing annual homesale transactions decreased 5% in 2010 to 4.9 million units while the median price of U.S. existing homesale units remained flat.

2011/2012 Industry outlook: As of their most recent releases, NAR is forecasting an 8% increase in existing homesale transactions for 2011 compared to 2010, and a 4% increase in existing homesale transactions for 2012 compared to 2011; and Fannie Mae is forecasting a 4% increase in existing homesale transactions for 2011 compared to 2010, and a 10% increase in existing homesale transactions for 2012 compared to 2011.

The table below shows NAR’s and Fannie Mae’s forecast of homesale transactions for the four quarters of 2011 compared to 2010. As the table indicates, the first half of 2011 is expected to compare unfavorably to the first half of 2010, due largely to the stimulus provided in the first half of 2010 by the 2010 homebuyer tax credit.

 

     2011 vs. 2010  
     First
Quarter
    Second
Quarter
    Third
Quarter
    Fourth
Quarter
 

Number of Homesales

        

Industry

        

NAR (a)

   —%       (6 %)      28     15

Fannie Mae (a)

     (1 %)      (7 %)      26     11

 

(a) Existing homesale data is as of the most recent NAR and Fannie Mae press releases.

 

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With respect to homesale prices, NAR’s most recent release is forecasting median homesale prices for 2011 compared to 2010 to remain flat and a 3% increase for 2012 compared to 2011. Fannie Mae’s most recent forecast shows a 2% decrease in median homesale price for 2011 compared to 2010 followed by a 1% increase for 2012 compared to 2011.

Recent industry indicators:  Consistent with the industry outlook for 2011, we believe that recent indicators point to some positive signs for the residential real estate market:

 

   

NAR reported that sequential existing homesale transactions (on a seasonally adjusted month-over-month basis) increased an average of 5.7% per month from July 2010 to January 2011.

 

   

According to NAR, the median price of existing homes appears to have stabilized with a median price of $164,700 in January 2009, which increased to $170,500 in December 2009, and was $168,800 in December 2010.

 

   

Interest rates continue to be at low levels, albeit at slightly higher rates than the historically low levels seen during the second half of 2010. According to Freddie Mac, interest rates on commitments for fixed-rate first mortgages have decreased from 6.0% in 2008 to 4.7% in 2010.

 

   

The housing affordability index has improved as a result of homesale price declines and lower mortgage interest rates. The housing affordability index has increased from 115 in 2007 to 138 in 2008, to 169 in 2009 to 175 in 2010. (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 20 percent down payment.)

We are not certain whether these signs of stabilization will lead to a housing recovery. Factors that may affect a recovery include:

 

   

higher mortgage rates as well as reduced availability of mortgage financing;

 

   

the potential for increased home inventory from banks that are currently holding foreclosed properties;

 

   

homeowners unable or unwilling to enter into homesale transactions due to negative equity in their existing homes;

 

   

continuing high levels of unemployment and relatively low level of consumer confidence;

 

   

the economic recovery in the U.S. not being sustained or, if sustained, resulting in only modest economic growth;

 

   

home ownership levels in the U.S. not stabilizing or improving; and

 

   

the impact of legislative or regulatory reform, including but not limited to reform that materially adversely impacts the financing of the U.S. housing market.

(See “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Current Industry Trends” for a discussion of recent and potential new legislation affecting the financing of the U.S. housing market.) Consequently, we cannot predict when the residential real estate industry will return to a period of sustainable growth.

Favorable long-term demographics : 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, increases in the number of U.S. households, low interest rates, increases in renters that qualify as homebuyers and locally based dynamics such as demand relative to supply. We believe that the housing market will benefit over the long term from expected positive fundamentals, including the following demographic factors:

 

   

the number of U.S. households grew from 94 million in 1991 to 118 million in 2010, increasing at a rate of 1% per year on a CAGR basis. According to the Joint Center for Housing Studies at Harvard University, such annual growth trend is expected to continue through 2020 with an average of 1.2 to

 

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1.4 million households projected to be formed annually from 2010 to 2020 (assumes expanded immigration);

 

   

aging echo boomers (i.e., children born to baby boomers) are expected to drive most of the next U.S. household growth; and

 

   

according to NAR, the number of renters that qualify to buy a median priced home increased from 11 million in 2000 to 14 million in 2010.

Participation in Multiple Aspects of the Residential Real Estate Market

LOGO

Realogy participates in services associated with many aspects of the residential real estate market. Our four complementary businesses and mortgage joint venture allow us to generate revenue at various points in the transactional process, including listing of homes, assisting buyers in home searches, corporate relocation services, settlement and title services, and franchising of our brands. The businesses each benefit from our deep understanding of the industry, strong relationships with real estate brokers, sale associates and other real estate professionals and expertise across the transactional process. Unlike other industry participants who offer only one or two services, we can offer homeowners, our franchisees and our corporate and government clients ready access to numerous associated services that facilitate and simplify the home purchase and sale process. These services provide further revenue opportunities for the Company’s owned businesses and those of our franchisees. Specifically, our brokerage offices and those of our franchisees participate in purchases and sales of homes involving relocations of corporate transferees using Cartus relocation services and we offer customers (purchasers and sellers) of both our owned and franchised brokerage businesses convenient title and settlement services. These services produce incremental revenues for our businesses and franchisees. In addition, we

 

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participate in the mortgage process through our 49.9% ownership of PHH Home Loans. In some instances, all four of our businesses can derive revenue from the same real estate transaction.

Our Brands

Our brands are among the most well known and established real estate brokerage brands in the real estate industry. As of December 31, 2010, our franchise system had approximately 14,700 franchised and company owned offices and 264,000 independent sales associates operating under our franchise and proprietary brands in the U.S. and other countries and territories around the world, which includes approximately 750 of our company owned and operated brokerage offices. In 2010, based on NAR’s historical survey data and our own results, we were involved, either through our franchise operations of our franchisees or our company owned brokerages, in approximately 23% of all existing homesale transaction volume (sides times price) for domestic transactions involving a real estate brokerage firm.

Our real estate franchise brands, excluding proprietary brands that we own, are listed in the following chart, which includes information as of December 31, 2010 for both our franchised and company owned offices:

 

  LOGO   LOGO   LOGO   LOGO   LOGO   LOGO

Worldwide
Offices (1)

  200   8,000   3,300   2,500   550   160

Worldwide Brokers and Sales
Associates (1)

  7,000   121,000   89,700   30,100   11,800   2,100

U.S. Annual Sides

  19,820   394,521   609,266   104,114   39,846   N/A

# Countries with Owned or Franchised Operations

  1   72   50   42   44   26

Characteristics

 

•    Fast-growing real estate brand launched in July 2008

 

•    Unique relationship with a leading media company, including largest lifestyle magazine in the U.S.

 

•    World’s largest residential real estate sales organization

 

•    Identified by consumers as the most recognized name in real estate

 

•    Significant international office footprint

 

•    Longest running national real estate brand in the U.S. (104 years)

 

•    Known for innovative consumer services, marketing and technology

 

•    Driving value through innovation and collaboration

 

•    Highest percentage of international offices among Realogy brands

 

•    Synonymous with luxury

 

•    Strong ties to auction house established in 1744

 

•    Rapid international growth

 

•    A leading commercial real estate franchise organization

 

•    Serves wide range of clients from corporations to small businesses to individual clients and investors

 

(1) Includes offices and related brokers and sales associates of franchisees of master franchisors.

Real Estate Franchise Services

Our primary objectives as the largest franchisor of residential real estate brokerages in the world are to sell new franchises, retain existing franchises, create or acquire new brands and, most importantly, provide support to our franchisees in a way that enables them to manage their business more effectively. At December 31, 2010, our real estate franchise system had approximately 14,700 offices worldwide in 100 countries and territories in North and South America, Europe, Asia, Africa, the Middle East and Australia, including approximately 6,700 brokerage offices in the U.S.

 

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While 2010 was a year in which our total number of offices and franchisees remained constant and followed a year in which we experienced some contraction due to the housing downturn, we have generated significant growth over the years in our real estate franchise business by new franchise sales, increasing the number of international master franchise agreements and increasing the geographic footprint of our franchises. The broad geographic distribution of our franchisees mitigates the risk of extreme local or regional economic downturns. During 2010, none of our franchisees (other than our company owned brokerage operations) generated more than 1% of our real estate franchise business revenues.

We derive substantially all of our real estate franchising revenues from royalty fees received under long-term franchise agreements with our franchisees (typically ten years in duration for domestic agreements). The royalty fee is based on a percentage of the franchisees’ gross commission income earned from real estate transactions. In general, we provide our franchisees with a license to use the brands’ service marks, tools and systems in connection with their business, educational materials which contain recommended methods, specifications and procedures for operating the franchise, extensive training programs and assistance, and a national marketing program and related services. We operate and maintain an Internet-based reporting system for our domestic franchisees which allows them to electronically transmit listing information, transactions, reporting information and other relevant reporting data. We also own and operate websites for each of our brands for the benefit of our franchisees. We believe that one of our strengths is the strong relationships that we have with our franchisees as evidenced by the franchisee retention rate of 95% in 2010. Our retention rate represents the annual gross commission income as of December 31 of the previous year generated by our franchisees that remain in the franchise system on an annual basis, measured against the annual gross commission income of all franchisees as of December 31 of the previous year. On average, our franchisees’ tenure with our brands is approximately 18 years as of December 31, 2010.

The franchise agreements impose restrictions on the business and operations of the franchisees and require them to comply with the operating and identity standards set forth in each brand’s policy and procedures manuals. A franchisee’s failure to comply with these restrictions and standards could result in a termination of the franchise agreement. The franchisees generally are not permitted to terminate the franchise agreements under any circumstances, and in those cases where termination rights do exist, they are very limited (e.g., if the franchisee retires, becomes disabled or dies). Generally, the domestic franchise agreements have a term of ten years and require the franchisees to pay us an initial franchise fee of up to $35,000 for the franchisee’s principal office, plus, upon the receipt of any commission income, a royalty fee, in most cases, equal to 6% of such income. Each of our franchise systems (other than Coldwell Banker Commercial ® ) offers a volume incentive program, whereby each franchisee is eligible to receive a portion of the royalties paid upon the satisfaction of certain conditions. The amount of the volume incentive varies depending upon the franchisee’s annual gross revenue subject to royalty payments for the prior calendar year. Under the current form of franchise agreements, the volume incentive varies for each franchise system, and ranges from zero to 3% of gross revenues. We provide a detailed table to each franchisee that describes the gross revenue thresholds required to achieve a volume incentive and the corresponding incentive amounts. We reserve the right to increase or decrease the percentage and/or dollar amounts in the table, subject to certain limitations. Our company owned brokerage offices do not participate in the volume incentive program. Franchisees and company owned offices are also required to make monthly contributions to national advertising funds maintained by each brand for the creation and development of advertising, public relations and other marketing programs.

Under certain circumstances, we extend conversion notes (development advance notes were issued prior to 2009) to eligible franchisees for the purpose of providing an incentive to join the brand, to renew their franchise agreements, or to facilitate their growth opportunities. Growth opportunities include the expansion of franchisees’ existing businesses by opening additional offices through the consolidation of operations of other franchisees as well as through the acquisition of offices operated by independent brokerages. Many franchisees use the proceeds from the conversion notes to change stationery, signage, business cards and marketing materials or to assist in acquiring companies. The notes are not funded until appropriate credit checks and other due diligence matters are completed and the business is opened and operating under one of our brands. Upon satisfaction of certain performance based thresholds, the loans are forgiven over the term of the franchise agreement.

 

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In addition to offices owned and operated by our franchisees, we, through our NRT subsidiary, own and operate approximately 750 offices under the following names: Coldwell Banker ® , ERA ® , Sotheby’s International Realty ® , The Corcoran Group ® and Citihabitats. NRT pays intercompany royalty fees and marketing fees to our real estate franchise business in connection with its operation of these offices. These fees are recognized as income or expense by the applicable segment level and eliminated in the consolidation of our businesses. NRT is not eligible for any volume incentives.

In the U.S. and generally in Canada, we employ a direct franchising model whereby we contract with and provide services directly to independent owner-operators. In other parts of the world, we employ either a master franchise model, whereby we contract with a qualified, experienced third party to build a franchise enterprise in such third party’s country or region, or a direct franchising model. Under the master franchise model, we typically enter into long term franchise agreements (often 25 years in duration) and receive an initial area development fee and ongoing royalties. The ongoing royalties are generally a percentage of the royalties received by the master franchisor from its franchisees with which it contracts.

We also offer service providers an opportunity to market their products to our franchisees and their independent sales associates and customers through our Preferred Alliance Program. To participate in this program, service providers generally pay us an initial licensing fee, subsequent commissions based upon our franchisees’ or independent sales associates’ usage of the preferred alliance vendors, or both. In connection with the spin-off of PHH, Cendant’s former mortgage business, PHH Mortgage, the subsidiary of PHH that conducts mortgage financing, is the only provider of mortgages for customers of our franchisees that we endorse. We receive a fee for licensing our brands and for allowing the vendors promotional opportunities on websites and in offices and at periodic group events.

We own the trademarks “Century 21 ® ,” “Coldwell Banker ® ,” “Coldwell Banker Commercial ® ,” “ERA ® ” and related trademarks and logos, and such trademarks and logos are material to the businesses that are part of our real estate business. Our franchisees and our subsidiaries actively use these trademarks, and all of the material trademarks are registered (or have applications pending) with the United States Patent and Trademark Office as well as with corresponding trademark offices in major countries worldwide where these businesses have significant operations.

We have an exclusive license to own, operate and franchise the Sotheby’s International Realty ® brand to qualified residential real estate brokerage offices and individuals operating in eligible markets pursuant to a license agreement with SPTC Delaware LLC, a subsidiary of Sotheby’s (“Sotheby’s”). Such license agreement has a 100-year term, which consists of an initial 50-year term and a 50-year renewal option. In connection with our acquisition of such license, we also acquired the domestic residential real estate brokerage operations of Sotheby’s which are now operated by NRT. We pay a licensing fee to Sotheby’s for the use of the Sotheby’s International Realty ® name equal to 9.5% of the royalties earned by our Real Estate Franchise Services Segment attributable to franchisees affiliated with the Sotheby’s International Realty ® brand, including brokers in our company owned offices.

In October 2007, we entered into a long-term license agreement to own, operate and franchise the Better Homes and Gardens ® Real Estate brand from Meredith. The license agreement between Realogy and Meredith became operational on July 1, 2008 and is for a 50-year term, with a renewal option for another 50 years at our option. At December, 31, 2010, Realogy had approximately 200 offices with 7,000 independent sales associates operating under the Better Homes and Gardens ® Real Estate brand name.

Each of our brands has a consumer web site that offers real estate listings, contacts and services. Century21.com, coldwellbanker.com, coldwellbankercommercial.com, sothebysrealty.com, era.com and bhgrealestate.com are the official websites for the Century 21 ® , Coldwell Banker ® , Coldwell Banker Commercial ® , Sotheby’s International Realty ® , ERA ® and Better Homes and Gardens ® real estate franchise systems, respectively.

 

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Company Owned Real Estate Brokerage Services

Through our subsidiary, NRT, we own and operate a full-service real estate brokerage business in more than 35 of the largest metropolitan areas in the U.S. Our company owned real estate brokerage business operates under the Coldwell Banker ® , ERA ® and Sotheby’s International Realty ® franchised brands as well as proprietary brands that we own, but do not currently franchise, such as The Corcoran Group ® and Citihabitats. In addition, under NRT, we operate a large independent REO residential asset manager, which focuses on bank-owned properties. Our REO operations facilitate the maintenance and sale of foreclosed homes on behalf of lenders and the profitability of this business is historically countercyclical to the overall state of the housing market. As of December 31, 2010, we had approximately 750 company owned brokerage offices, approximately 5,000 employees and approximately 44,000 independent sales associates working with these company owned offices

Our real estate brokerage business derives revenue primarily from sales commissions received at the closing of real estate transactions, which we refer to as gross commission income. For the year ended December 31, 2010, our average homesale broker commission rate was 2.48% which represents the average commission rate earned on either the “buy” side or the “sell” side of a homesale transaction. Generally in U.S. homesale transactions, the broker for the home seller instructs the closing agent to pay a portion of the sales commission to the broker for the buyer and keeps the remaining portion of the homesale commission. In addition, as a full-service real estate brokerage company, we promote the complementary services of our relocation and title and settlement services businesses, in addition to PHH Home Loans. We believe we provide integrated services that enhance the customer experience.

When we assist the seller in a real estate transaction, our independent sales associates generally provide the seller with a full service marketing program, which may include developing a direct marketing plan for the property, assisting the seller in pricing the property and preparing it for sale, listing it on multiple listing services, advertising the property (including on websites), showing the property to prospective buyers, assisting the seller in sale negotiations, and assisting the seller in preparing for closing the transaction. When we assist the buyer in a real estate transaction, our independent sales associates generally help the buyer in locating specific properties that meet the buyer’s personal and financial specifications, show properties to the buyer, assist the buyer in negotiating (where permissible) and in preparing for closing the transaction.

At December 31, 2010, we operated approximately: 90% of our offices under the Coldwell Banker ® brand name, 5% of our offices under The Corcoran Group ® and Citihabitats brand names, 4% of our offices under the Sotheby’s International Realty ® brand name, and 1% of our offices under the ERA ® brand name. Our offices are geographically diverse with a strong presence in the east and west coast areas, where home prices are generally higher. We operate our Coldwell Banker ® offices in numerous regions throughout the U.S., our Sotheby’s International Realty ® offices in several regions throughout the U.S, our Corcoran ® Group offices in New York City, the Hamptons (New York), and Palm Beach, Florida and our ERA ® offices in Pennsylvania.

We intend to grow our business both organically and through strategic acquisitions. To grow organically, we will focus on working with office managers to recruit, retain and develop effective independent sales associates that can successfully engage and earn fees from new clients. We will continue to shift a portion of our traditional print media marketing to technology media marketing. We also intend to actively monitor expenses to increase efficiencies and perform restructuring activities to streamline operations as deemed necessary.

We have a dedicated group of professionals whose function is to identify, evaluate and complete acquisitions. We are continuously evaluating acquisitions that will allow us to enter into new markets and to expand our market share in existing markets through smaller “tuck-in” acquisitions. Following completion of an acquisition, we consolidate the newly acquired operations with our existing operations. By consolidating operations, we reduce or eliminate duplicative costs, such as advertising, rent and administrative support. By utilizing our existing infrastructure to support a broader network of independent sales associates and revenue base, we can enhance the profitability of our operations. We also seek to enhance the profitability of newly

 

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acquired operations by increasing the productivity of the acquired brokerages’ independent sales associates. We provide these independent sales associates with specialized tools, training and resources that are often unavailable at smaller firms, such as access to sophisticated information technology and ongoing technical support, increased advertising and marketing support, relocation referrals, and a wide offering of brokerage-related services.

Our real estate brokerage business has a contract with Cartus under which the brokerage business provides brokerage services to relocating employees of the clients of Cartus. When receiving a referral from Cartus, our brokerage business seeks to assist the buyer in completing a homesale or home purchase. Upon completion of a homesale or home purchase, our brokerage business receives a commission on the purchase or sale of the property and is obligated to pay Cartus a portion of such commission as a referral fee. We believe that these fees are comparable to the fees charged by other relocation companies.

PHH Home Loans, our home mortgage venture with PHH, a publicly traded company, has a 50-year term, subject to earlier termination upon the occurrence of certain events or at our election at any time after January 31, 2015 by providing two years notice to PHH. We own 49.9% of PHH Home Loans and PHH owns the remaining 50.1%. PHH may terminate the venture upon the occurrence of certain events or, at its option, after January 31, 2030. Such earlier termination would result in (i) PHH selling its interest to a buyer designated by us or (ii) requiring PHH to buy our interest. In either case, the purchase price would be the fair market value of the interest sold. All mortgage loans originated by the venture are sold to PHH or other third party investors, and PHH Home Loans does not hold any mortgage loans for investment purposes or perform servicing functions for any loans it originates. Accordingly, we have no mortgage servicing rights asset risk. PHH Home Loans is the exclusive recommended provider of mortgages for our company owned real estate brokerage business (unless exclusivity is waived by PHH).

Relocation Services

Through our subsidiary, Cartus, we are a leading global provider of outsourced employee relocation services.

We primarily offer corporate clients employee relocation services, such as:

 

   

homesale assistance, including the evaluation, inspection, purchasing and selling of a transferee’s home; the issuance of home equity advances to transferees permitting them to purchase a new home before selling their current home (these advances are generally guaranteed by the client); certain home management services; assistance in locating a new home; and closing on the sale of the old home, generally at the instruction of the client;

 

   

expense processing, relocation policy counseling, relocation-related accounting, including international assignment compensation services, and other consulting services;

 

   

arranging household goods moving services, with approximately 66,000 domestic and international shipments in 2010, and providing support for all aspects of moving a transferee’s household goods, including the handling of insurance and claim assistance, invoice auditing and quality control;

 

   

visa and immigration support, intercultural and language training, and expatriation/repatriation counseling and destination services; and

 

   

group move management services providing coordination for moves involving a large number of transferees to or from a specific regional area over a short period of time.

The wide range of our services allows our clients to outsource their entire relocation programs to us.

In January 2010, our relocation business acquired Primacy, a relocation and global assignment management services company headquartered in Memphis, Tennessee with international locations in Canada, Europe and

 

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Asia. The acquisition enabled Cartus to re-enter the U.S. government relocation business, increase its domestic operations, as well as expand the Company’s global relocation capabilities. Effective January 1, 2011, the Primacy business operates under the Cartus name.

In 2010, we assisted in over 148,000 relocations in over 160 countries for approximately 1,500 active clients, including over 60% of the Fortune 50 companies as well as affinity organizations. Cartus has offices in the U.S. as well as internationally in Swindon and Richmond, United Kingdom, Canada, Hong Kong, Singapore, China, Germany, France, Switzerland and The Netherlands.

Under relocation services contracts with our clients, homesale services have historically been classified into two types, “at risk” and “no risk”. Under “at risk” contracts, our relocation business enters into homesale transactions whereby we acquire the home being sold by relocating employees and bear the risk of all expenses associated with acquiring, carrying and selling the home, including potential loss on sale. In early 2008, the Company exited most of its “at risk” contracts as a result of the “at risk” business becoming unprofitable in 2007 due to the continued downturn in the U.S. residential real estate market and the losses incurred on the sale of “at risk” homes. We believe the terms of the “at risk” government contracts we acquired in the Primacy acquisition are structured in a manner that mitigates risks associated with a downturn in the residential real estate market — in contrast to the “at risk” government business that we exited. As of December 31, 2010, “at risk” client contracts represented less than 1% of Cartus’ total client contracts.

Under “no risk” contracts, which at December 31, 2010 accounted for greater than 99% of our clients, the client is responsible for payment of all direct expenses associated with the homesale. Such expenses include, but are not limited to, appraisal, inspection and real estate brokerage commissions. The client also bears the risk of loss on the re-sale of the transferee’s home. Clients are responsible for payment of all other direct costs associated with the relocation, including, but not limited to, costs to move household goods, mortgage origination points, temporary living and travel expenses. Generally we fund the direct expenses associated with the homesale as well as those associated with the relocation on behalf of the client and the client then reimburses us for these costs plus interest charges on the advanced money. This limits our exposure on “no risk” homesale services to the credit risk of our clients rather than to the potential fluctuations in the real estate market or to the creditworthiness of the individual transferring employee. Historically, due to the credit quality of our clients, we have had minimal losses with respect to “no risk” homesale services.

Under “at risk” contracts, we pay for all direct expenses (acquisition, carrying and selling costs) associated with the homesale and bear any loss on the sale of the home. As with the “no-risk” contracts, clients with “at risk” contracts bear the non-homesale related direct costs associated with the relocation though we generally advance these expenses and the client reimburses us inclusive of interest charges on the advanced money.

Substantially all of our contracts with our relocation clients are terminable at any time at the option of the client. If a client terminates its contract, we will be compensated for all services performed up to the time of termination and reimbursed for all expenses incurred to the time of termination.

We earn commissions primarily from real estate brokers and van lines that provide services to the transferee. The commissions earned allow us pricing flexibility for the fees we charge our clients. We have created the Cartus Broker Network, which is a network of real estate brokers consisting of our company owned brokerage operations, select franchisees and independent real estate brokers who have been approved to become members. Member brokers of the Cartus Broker Network receive referrals from our relocation services business in exchange for a referral fee. The Cartus Broker Network closed approximately 57,000 properties in 2010 and accounted for approximately 6% of our relocation revenue.

About 7% of our relocation revenue in 2010 was derived from our affinity services, which provide real estate and relocation services, including home buying and selling assistance, as well as mortgage assistance and moving services, to organizations such as insurance companies, credit unions and airline companies that have

 

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established members. Often these organizations offer our affinity services to their members at no cost and, where permitted, provide their members with a financial incentive for using these services. This service helps the organizations attract new members and retain current members.

Title and Settlement Services

Our title and settlement services business, TRG, provides full-service title and settlement (i.e., closing and escrow) services to real estate companies and financial institutions. We act in the capacity of a title agent and sell title insurance to property buyers and mortgage lenders. We issue title insurance policies on behalf of large national underwriters and through our wholly-owned underwriter, Title Resources Guaranty Company (“TRGC”), which we acquired in January 2006. We are licensed as a title agent in 37 states and Washington, D.C., and have physical locations in 25 states and Washington, D.C. We operate mostly in major metropolitan areas. As of December 31, 2010, we had approximately 361 offices, 238 of which are co-located within one of our company owned brokerage offices.

Virtually all lenders require their borrowers to obtain title insurance policies at the time mortgage loans are made on real property. For policies issued through our agency operations, assuming no negligence on our part, we typically are liable only for the first $5,000 of loss for such policies on a per claim basis, with the title insurer being liable for any remaining loss. Title insurance policies state the terms and conditions upon which a title underwriter will insure title to real property. Such policies are issued on the basis of a preliminary report or commitment. Such reports are prepared after, among others, a search of public records, maps and other relevant documents to ascertain title ownership and the existence of easements, restrictions, rights of way, conditions, encumbrances or other matters affecting the title to, or use of, real property. To facilitate the preparation of preliminary reports, copies of public records, maps and other relevant historical documents are compiled and indexed in a title plant. We subscribe to title information services provided by title plants owned and operated by independent entities to assist us in the preparation of preliminary title reports. In addition, we own, lease or participate with other title insurance companies or agents in the cooperative operation of such plants.

The terms and conditions upon which the real property will be insured are determined in accordance with the standard policies and procedures of the title underwriter. When our title agencies sell title insurance, the title search and examination function is performed by the agent. The title agent and underwriter split the premium. The amount of such premium “split” is determined by agreement between the agency and underwriter, or is promulgated by state law. We have entered into underwriting agreements with various underwriters, which state the conditions under which we may issue a title insurance policy on their behalf.

Our company owned brokerage operations are the principal source of our title and settlement services business for resale transactions. Other sources of our title and settlement services resale business include our real estate franchise business and Cartus. Many of our offices have subleased space from, and are co-located within, our company owned brokerage offices, a strategy that is compliant with RESPA and any analogous state laws. The capture rate of our title and settlement services business from co-located company owned brokerage operations was approximately 39% in 2010. For refinance transactions, we generate revenues from PHH and other financial institutions throughout the mortgage lending industry.

Certain states in which we operate have “controlled business” statutes which impose limitations on affiliations between providers of title and settlement services, on the one hand, and real estate brokers, mortgage lenders and other real estate service providers, on the other hand. For example, in California, a title insurer/agent cannot rely on more than 50% of its title orders from “controlled business sources,” which is defined as sources controlled by, or which control, directly or indirectly, the title insurer/agent, which would include leads generated by our company owned brokerage business. In those states in which we operate our title and settlement services business that have “controlled business” statutes, we comply with such statutes by ensuring that we generate sufficient business from sources we do not control.

 

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We engage in a title insurance underwriting business through our Dallas-based subsidiary, TRGC. TRGC is a title insurance underwriter licensed in 25 states and Washington, D.C. TRGC underwrites a portion of the title insurance policies issued by our agency businesses.

We also derive revenues by providing our title and settlement services to various financial institutions in the mortgage lending industry. Such revenues are primarily derived from providing our services to customers who are refinancing their mortgage loans.

We also coordinate a national network of escrow and closing agents (some of whom are our employees, while others are attorneys in private practice and independent title companies) to provide full-service title and settlement services to a broad-based group that includes lenders, home buyers and sellers, developers, and independent real estate sales associates. Our role is generally that of an intermediary managing the completion of all the necessary documentation and services required to complete a real estate transaction.

We derive revenue through fees charged in real estate transactions for rendering the services described above as well as a percentage of the title premium on each title insurance policy sold. We provide many of these services in connection with our residential and commercial real estate brokerage and relocation operations. Fees for escrow and closing services are separate and distinct from premiums paid for title insurance and other real-estate services.

We intend to grow our title and settlement services business through the completion of acquisitions in new markets as well as those that complement existing operations. We also intend to grow by leveraging our existing geographic coverage, scale, capabilities and reputation into new offices not directly connected with our company owned brokerage offices and through continuing to enter into contracts and ventures with our franchisees that will allow them to participate in the title and settlement services business. We also plan to expand our underwriting operations into other states. We intend to continue our expansion of our lender channel by working with national lenders as their provider of settlement services.

Competition

Real Estate Franchise Business . Competition among the national real estate brokerage brand franchisors to grow their franchise systems is intense. Our largest national competitors in this industry include, but are not limited to, Prudential Real Estate Affiliates, Inc., Real Living (which includes the franchise business that had been conducted by GMAC Real Estate, LLC), RE/MAX International, Inc. and Keller Williams Realty, Inc. In addition, a real estate broker may choose to affiliate with a regional chain or choose not to affiliate with a franchisor but to remain unaffiliated. We believe that competition for the sale of franchises in the real estate brokerage industry is based principally upon the perceived value and quality of the brand and services, the nature of those services offered to franchisees, including the availability of financing, and the fees the franchisees must pay.

The ability of our real estate brokerage franchisees to compete with other real estate brokerages is important to our prospects for growth. Their ability to compete may be affected by the quality of independent sales associates, the location of offices, the services provided to independent sales associates, the number of competing offices in the vicinity, affiliation with a recognized brand name, community reputation and other factors. A franchisee’s success may also be affected by general, regional and local economic conditions. The potential negative effect of these conditions on our results of operations is generally reduced by virtue of the diverse geographical locations of our franchisees.

Real Estate Brokerage Business . The real estate brokerage industry is highly competitive, particularly in the metropolitan areas in which our owned brokerage businesses operate. In addition, the industry has relatively low barriers to entry for new participants, including participants pursuing non-traditional methods of marketing real estate, such as Internet-based listing services. Companies compete for sales and marketing business primarily

 

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on the basis of services offered, reputation, personal contacts, and brokerage commissions. We compete with other national independent real estate organizations, including Home Services of America, franchisees of our brands and of other national real estate franchisors, franchisees of local and regional real estate franchisors, regional independent real estate organizations such as Weichert Realtors and Long & Foster Real Estate, discount brokerages; and smaller niche companies competing in local areas.

Relocation Business . Competition in our relocation business is based on service, quality and price. We compete primarily with global and regional outsourced relocation services providers. The larger outsourced relocation services providers that we compete with include SIRVA, Inc., Weichert Relocation Resources, Inc. and Prudential Real Estate and Relocation Services Inc.

Title and Settlement Business . The title and settlement business is highly competitive and fragmented. The number and size of competing companies vary in the different areas in which we conduct business. We compete with other title insurers, title agents and vendor management companies. The title and settlement business competes with a large, fragmented group of smaller underwriters and agencies. In addition, we compete with national competitors, including Fidelity National Title Insurance Company, First American Title Insurance Company, Stewart Title Guaranty Company and Old Republic Title Company.

Marketing

Franchise Operations

Each of our residential franchise brands operates a national advertising fund and our commercial brand operates a commercial marketing fund that is funded by our franchisees and our owned real estate brokerage operations. Either through our contracts with our franchisees or via contributions made by our company owned real estate brokerage operations, we are the largest contributor to each of these funds. The primary focus of each national advertising fund is to build and maintain brand awareness, which is accomplished through a variety of media, including increased use of Internet promotion. Our Internet presence, for the most part, features our entire listing inventory in our regional and national markets, plus community profiles, home buying and selling advice, relocation tips and mortgage financing information. Each brand manages a comprehensive system of marketing tools, systems and sales information and data that can be accessed through free standing brand intranet sites to assist independent sales associates in becoming the best marketer of their listings. In addition to the Sotheby’s International Realty ® brand, a leading luxury brand, our franchisees and our company owned brokerages also participate in luxury marketing programs, such as Century 21 ® Fine Homes & Estates SM , Coldwell Banker Previews ® , and ERA International Collection ® .

According to NAR, 89% of homebuyers used the Internet in their search for a new home in 2010. Our marketing and technology strategies focus on capturing this consumer and assisting in their purchase. Advertising is used by the brands to drive consumers to their respective websites. Significant focus is placed on developing each website to create value to the real estate consumer. Each website focuses on streamlined, easy search processes for listing inventory and rich descriptive details and multiple photos to market the listing on the brand website. Additionally, each brand website serves as a national distribution point for independent sales associates to market themselves to consumers to enhance the customer experience.

In order to improve our response times to buyers and sellers seeking real estate services, we developed LeadRouter, our proprietary lead management system. We believe LeadRouter provides a competitive advantage by improving the speed at which a brokerage can begin working with a customer. The system converts text to voice and transfers the lead to our agents within a matter of seconds providing our agents with the ability to quickly respond to the needs of a potential home buyer or seller. Additionally, LeadRouter provides the broker with an accountability tool to manage their agents and evaluate productivity.

 

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Company Owned Brokerage Operations

Our company owned real estate brokerage business markets our real estate services and specific real estate listings primarily through individual property signage, the Internet, and by hosting open houses of our listings for potential buyers to view in person during an appointed time period. In addition, contacts and communication with other real estate sales associates, targeted direct mailings, and local print media, including newspapers and real estate publications, are effective for certain price points and geographical locations.

Our independent sales associates at times choose to supplement our marketing with specialized programs they fund on their own. We provide our independent sales associates with promotional templates and materials which may be customized for this opportunity.

In addition to our Sotheby’s International Realty ® offices, we also participate in luxury marketing programs established by our franchisors, such as Coldwell Banker Previews ® and the ERA International Collection ® . The programs provide special services for buyers and sellers of luxury homes, with attached logos to differentiate the properties. Our independent sales associates are offered the opportunity to receive specific training and certification in their respective luxury properties marketing program. Properties listed in the program are highlighted through specific:

 

   

signage displaying the appropriate logo;

 

   

features in the appropriate section on the Company’s Internet site;

 

   

targeted mailings to prospective purchasers using specific mailing lists; and

 

   

collateral marketing material, magazines and brochures highlighting the property.

The utilization of information technology as a marketing tool has become increasingly effective in our industry, and we believe that trend will continue to increase. Accordingly, we have sought to become a leader among residential real estate brokerage firms in the use and application of technology. The key features of our approach are as follows:

 

   

The integration of our information systems with multiple listing services to:

 

   

provide property information on a substantial number of listings, including those of our competitors when possible to do so; and

 

   

integrate with our systems to provide current data for other proprietary technology within NRT, such as contact management technology.

 

   

The placement of our company listings on multiple websites.

The majority of these websites provide the opportunity for the customer to utilize different features, allowing them to investigate community information, view property information and print feature sheets on those properties, receive on-line updates, obtain mapping and property tours for open houses, qualify for financing, review the qualifications of our independent sales associates, receive home buying and selling tips, and view information on our local sales offices. The process usually begins with the browsing consumer providing search parameters to narrow their property viewing experience. Wherever possible, we provide at least six photographs of the property and/or a virtual tour in order to make the selection process as complete as possible. To make readily available the robust experience on our websites, we utilize paid web search engine advertising as a source for our consumers.

Most importantly, the browsing customer has the ability to contact us regarding their particular interest and receive a rapid response through our proprietary lead management system, LeadRouter.

Our independent sales associates have the ability to access professional support and information through various extranet sites in order to perform their tasks more efficiently. An example of this is the nationwide availability of a current “Do Not Call List” to assist them in the proper telemarketing of their services.

 

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Employees

At December 31, 2010, we had approximately 10,500 employees, including approximately 700 employees outside of the U.S. None of our employees are subject to collective bargaining agreements governing their employment with us. We believe that our employee relations are good.

Sales Associate Recruiting and Training

Each real estate franchise system encourages, and provides some assistance and training with respect to, independent sales associate recruiting by franchisees. Each system separately develops its own branded recruiting programs that are tailored to the needs of its franchisees.

Each real estate brand provides training and marketing-related materials to its franchisees to assist them in the recruiting process. Each system’s recruiting program contains different materials and delivery methods. The marketing materials range from a detailed description of the services offered by our franchise system (which will be available to the independent sales associate) in brochure or poster format to audio tape lectures from industry experts. Live instructors at conventions and orientation seminars deliver some recruiting modules while other modules can be viewed by brokers anywhere in the world through virtual classrooms over the Internet. Most of the programs and materials are then made available in electronic form to franchisees over the respective system’s private intranet site. Many of the materials are customizable to allow franchisees to achieve a personalized look and feel and make modifications to certain content as appropriate for their business and marketplace.

Government Regulation

Franchise Regulation. The sale of franchises is regulated by various state laws, as well as by the Federal Trade Commission (the “FTC”). The FTC requires that franchisors make extensive disclosure to prospective franchisees but does not require registration. A number of states require registration or disclosure in connection with franchise offers and sales. In addition, several states have “franchise relationship laws” or “business opportunity laws” that limit the ability of the franchisor to terminate franchise agreements or to withhold consent to the renewal or transfer of these agreements. The states with relationship or other statutes governing the termination of franchises include Arkansas, California, Connecticut, Delaware, Hawaii, Illinois, Indiana, Iowa, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, Virginia, Washington, and Wisconsin. Puerto Rico and the Virgin Islands also have statutes governing termination of franchises. Some franchise relationship statutes require a mandated notice period for termination; some require a notice and cure period. In addition, some require that the franchisor demonstrate good cause for termination. These statutes do not have a substantial effect on our operations because our franchise agreements generally comport with the statutory requirements for cause for termination, and they provide notice and cure periods for most defaults. Where the franchisee is granted a statutory period longer than permitted under the franchise agreement, we extend our notice and/or cure periods to match the statutory requirements. In some states, case law requires a franchisor to renew a franchise agreement unless a franchisee has given cause for non-renewal. Failure to comply with these laws could result in civil liability to any affected franchisees. While our franchising operations have not been materially adversely affected by such existing regulation, we cannot predict the effect of any future federal or state legislation or regulation.

Real Estate Regulation. RESPA and state real estate brokerage laws restrict payments which real estate brokers, title agencies, mortgage brokers and other settlement service providers may receive or pay in connection with the sales of residences and referral of settlement services (e.g., mortgages, homeowners insurance and title insurance). Such laws may to some extent restrict preferred alliance and other arrangements involving our real estate franchise, real estate brokerage, settlement services and relocation businesses. Currently, several states prohibit the sharing of referral fees with a principal to a transaction. In addition, with respect to our company owned real estate brokerage, relocation and title and settlement services businesses, RESPA and similar state laws require timely disclosure of certain relationships or financial interests with providers of real estate settlement services.

 

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On November 17, 2008, the Department of Housing and Urban Development (“HUD”) published a new final rule that seeks to simplify and improve disclosures regarding mortgage settlement services and encourage consumers to compare prices for such services by consumers. Parts of the new rule became effective on January 16, 2009 but the majority of the rule had a mandatory effective date of January 1, 2010. The material provisions of the new rule include: new Good Faith Estimate (“GFE”) and HUD-1 forms, permissibility of average cost pricing by settlement service providers, implementation of tolerance limits on various fees from the issuance of the GFE and the HUD-1 provided at closing, and disclosure of the title agent and title underwriter premium splits. TRG revised its systems and processes to be compliant with the new rule effective January 1, 2010 and conducted training for each of its applicable employees. To date there has not been any material impact (financial or otherwise) to the Company arising out of compliance with these new rules nor do we anticipate any future impact now that all processes and procedures have been fully implemented.

Our company owned real estate brokerage business is also subject to numerous federal, state and local laws and regulations that contain general standards for and prohibitions on the conduct of real estate brokers and sales associates, including those relating to the licensing of brokers and sales associates, fiduciary and agency duties, administration of trust funds, collection of commissions, and advertising and consumer disclosures. Under state law, our real estate brokers have the duty to supervise and are responsible for the conduct of their brokerage businesses.

Regulation of Title Insurance and Settlement Services . Many states license and regulate title agencies/settlement service providers or certain employees and underwriters through their Departments of Insurance or other regulatory body. In many states, title insurance rates are either promulgated by the state or are required to be filed with each state by the agent or underwriter, and some states promulgate the split of title insurance premiums between the agent and underwriter. States sometimes unilaterally lower the insurance rates relative to loss experience and other relevant factors. States also require title agencies and title underwriters to meet certain minimum financial requirements for net worth and working capital. In addition, each of our insurance underwriters is subject to a holding company act in its state of domicile, which regulates, among other matters, investment policies and the ability to pay dividends.

Certain states in which we operate have “controlled business” statutes which impose limitations on affiliations between providers of title and settlement services, on the one hand, and real estate brokers, mortgage lenders and other real estate service providers, on the other hand. We are aware of the states imposing such limits and monitor the others to ensure that if they implement such a limit that we will be prepared to comply with any such rule. “Controlled business” typically is defined as sources controlled by, or which control, directly or indirectly, the title insurer or agent. We are not aware of any pending controlled business legislation. A company’s failure to comply with such statutes could result in the non-renewal of the company’s license to provide title and settlement services. We provide our services not only to our affiliates but also to third-party businesses in the geographic areas in which we operate. Accordingly, we manage our business in a manner to comply with any applicable “controlled business” statutes by ensuring that we generate sufficient business from sources we do not control. We have never been cited for failing to comply with a “controlled business” statute.

 

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Item 1A. Risk Factors.

You should carefully consider each of the following risk factors and all of the other information set forth in this Annual Report. The risk factors generally have been separated into three groups: (1) risks relating to our indebtedness; (2) risks relating to our business; and (3) risks relating to our separation from Cendant Corporation, which changed its name to Avis Budget Group, Inc. in August 2006. Based on the information currently known to us, we believe that the following information identifies the most significant risk factors affecting the Company. However, the risks and uncertainties are not limited to those set forth in the risk factors described below. In addition, past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods.

Risks relating to our indebtedness

Our significant indebtedness could prevent us from meeting our obligations under our debt instruments and could adversely affect our ability to fund our operations, react to changes in the economy or our industry, or incur additional borrowings under our existing facilities.

We are significantly encumbered by our debt obligations. As of December 31, 2010, after giving effect to the Refinancing Transactions, our total debt, excluding the securitization obligations, would have been $7,007 million (without giving effect to $179 million of outstanding letters of credit under our senior secured revolving credit facility and $473 million of undrawn availability under our revolving credit facility). In addition, as of December 31, 2010, our current liabilities included $331 million of securitization obligations which were collateralized by $393 million of securitization assets that are not available to pay our general obligations.

Our indebtedness was principally incurred to finance our acquisition by Apollo in April 2007 and reflected our then current earnings and our expectations that the housing downturn would recover in the near term. While our total debt has increased since the date of our acquisition in order to fund negative cash flows, the industry and economy have experienced significant declines that have negatively impacted our operating results. Revenues for the year ended December 31, 2010 compared to the year ended December 31, 2007, on a pro forma combined basis, have decreased by approximately 32%. As a result, we have been, and continue to be, challenged by our heavily leveraged capital structure. There can be no assurance that we will be able to reduce the level of our leverage or debt in the future.

Our substantial degree of leverage could have important consequences, including the following:

 

   

it causes a substantial portion of our cash flows from operations to be dedicated to the payment of interest and required amortization on our indebtedness and not be available for other purposes, including our operations, capital expenditures and future business opportunities or principal repayment;

 

   

it could cause us to be unable to maintain compliance with the senior secured leverage ratio under our senior secured credit facility;

 

   

it could cause us to be unable to meet our debt service requirements under our senior secured credit facility or the indentures governing the Unsecured Notes and the First and a Half Lien Notes or meet our other financial obligations;

 

   

it may limit our ability to incur additional borrowings under our existing facilities or securitizations, to obtain additional debt or equity financing for working capital, capital expenditures, business development, debt service requirements, acquisitions or general corporate or other purposes, or to refinance our indebtedness;

 

   

it exposes us to the risk of increased interest rates because a portion of our borrowings, including borrowings under our senior secured credit facility, are at variable rates of interest;

 

   

it may limit our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to our competitors that have less debt;

 

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it may cause a further downgrade of our debt and long-term corporate ratings;

 

   

it may cause us to be more vulnerable to periods of negative or slow growth in the general economy or in our business, or may cause us to be unable to carry out capital spending that is important to our growth; and

 

   

it may limit our ability to attract and retain key personnel.

We may not be able to generate sufficient cash to service all of our indebtedness and be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We have needed to incur additional debt in order to fund negative cash flow. We cannot assure you that we will maintain a level of cash flows from operating activities and from drawings on our revolving credit facilities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. We cannot assure you that we would be able to take any of these actions, that these actions would be successful and permit us to meet our scheduled debt service obligations or that these actions would be permitted under the terms of our existing or future debt agreements. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. Our senior secured credit facility and the indentures governing the 12.375% Senior Subordinated Notes, the Extended Maturity Notes and the First and a Half Lien Notes restrict our ability to dispose of assets and use the proceeds from the disposition. We may not be able to consummate those dispositions or realize the related proceeds from them and these proceeds may not be adequate to meet any debt service obligations then due.

If we cannot make scheduled payments on our debt, we will be in default and, as a result:

 

   

our debt holders could declare all outstanding principal and interest to be due and payable; and

 

   

the lenders under our senior secured credit facility could terminate their commitments to lend us money and foreclose against the assets securing their borrowings.

An event of default under our senior secured credit facility would adversely affect our operations and our ability to satisfy obligations under our indebtedness.

Our senior secured credit facility contains restrictive covenants, including a requirement that we maintain a specified senior secured leverage ratio, which is defined as the ratio of our total senior secured debt (net of unrestricted cash and permitted investments) to trailing 12-month Adjusted EBITDA. Specifically measured at the last day of each quarter, our senior secured leverage ratio may not exceed 4.75 to 1.0 for the fiscal quarter ending March 31, 2011 and for each fiscal quarter thereafter. Total senior secured debt, for purposes of this ratio, does not include the First and a Half Lien Notes, Second Lien Loans, other bank indebtedness not secured by a first lien on our assets (including indebtedness supported by letters of credit issued under our senior secured credit facility), securitization obligations or the Unsecured Notes. For the fiscal year ended December 31, 2010, we were in compliance with the senior secured leverage ratio covenant with a ratio of 4.59 to 1.0. After giving effect to the Refinancing Transactions, our senior secured leverage ratio would have been 3.51 to 1.0 at December 31, 2010. Based upon the consummation of the Refinancing Transactions and our financial forecast for 2011, we expect to remain in compliance with the senior secured leverage ratio covenant for at least the next 12 months. If a housing recovery is delayed further or is weak, we will be subject to additional pressure in maintaining compliance with our senior secured leverage ratio. In future periods, if we are unable to renew or

 

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refinance bank indebtedness secured by letters of credit issued under our senior secured credit facility (which are not included in the calculation of the senior secured leverage ratio) and the letters of credit are drawn upon, the reimbursement obligations related to those letters of credit issued under the senior secured credit facility will be included in the calculation of the senior secured leverage ratio. A failure to maintain compliance with the senior secured leverage ratio, or a breach of any of the other restrictive covenants, would result in a default under our senior secured credit facility.

We have the right to cure an event of default of the senior secured leverage ratio in three of any four consecutive quarters through the issuance of additional Holdings equity for cash, which would be infused as capital into Realogy 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 or avoid a default through an equity cure permitted thereunder, there would be an “event of default” under the senior secured credit agreement. Other events of default include, without limitation, nonpayment, material misrepresentations, insolvency, bankruptcy, certain material judgments, change of control, and cross-events of default on material indebtedness as well as failure to obtain an unqualified audit opinion by 90 days after the end of any fiscal year. Upon the occurrence of any event of default under our senior secured credit facility, the lenders:

 

   

will not be required to lend any additional amounts to us;

 

   

could elect to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be immediately 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 or the First and a Half Lien Notes,

any of which could result in an event of default under the First and a Half Lien Notes, the Unsecured Notes or our Apple Ridge Funding LLC securitization program.

If we were unable to repay the amounts outstanding under our senior secured credit facility, then the lenders under our senior secured credit facility could proceed against the collateral granted to them to secure the indebtedness thereunder. We have pledged a significant portion of our assets as collateral under our senior secured credit facility. If the lenders under our senior secured credit facility accelerate the repayment of borrowings, we may not have sufficient assets to repay our senior secured credit facility and our other indebtedness or borrow sufficient funds to refinance such indebtedness. Notwithstanding the completion of the Refinancing Transactions, our total indebtedness was not and will not be significantly reduced unless and until the Convertible Notes issued in the Debt Exchange Offering are converted into equity. In the future, we may need to seek new financing, or explore the possibility of amending the terms of our senior secured credit facility, and we may not be able to do so on commercially reasonable terms, or terms that are acceptable to us, if at all.

If an event of default is continuing under our senior secured credit facility, the First and a Half Lien Notes or our other material indebtedness, such event could cause a termination of our ability to obtain future advances under, and/or amortization of, our Apple Ridge Funding LLC securitization program.

Restrictive covenants under our indentures and the senior secured credit facility may limit the manner in which we operate.

Our senior secured credit facility and the indentures governing the Extended Maturity Notes, the 12.375% Senior Subordinated Notes and the First and a Half Lien Notes contain, and any future indebtedness we incur may contain, various covenants and conditions 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;

 

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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 the First and a Half Lien Notes and debt that is junior in right of payment to the Unsecured Notes and the First and a Half Lien 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.

Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

At December 31, 2010 and after giving effect to the Refinancing Transactions, approximately $2,620 million of our borrowings under our senior secured credit facility and other bank indebtedness, would have been 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 income would decrease. Although we have entered into interest rate swaps with a notional value of $425 million, involving the exchange of floating for fixed rate interest payments, to reduce interest rate volatility, such interest rate swaps do not eliminate interest rate volatility for the unswapped portion of our variable rate indebtedness at December 31, 2010.

We are a holding company and are dependent on dividends and other distributions from our subsidiaries.

Realogy is a holding company with limited direct operations. Our principal assets are the equity interests that we hold in our operating subsidiaries. As a result, we are dependent on dividends and other distributions from those subsidiaries to generate the funds necessary to meet our financial obligations, including the payment of principal and interest on our outstanding debt. Our subsidiaries may not generate sufficient cash from operations to enable us to make principal and interest payments on our indebtedness. In addition, any payment of dividends, distributions, loans or advances to us by our subsidiaries could be subject to restrictions on dividends or repatriation of earnings under applicable local law and monetary transfer restrictions in the jurisdictions in which our subsidiaries operate. In addition, payments to us by our subsidiaries will be contingent upon our subsidiaries’ earnings. Our subsidiaries are permitted under the terms of our indebtedness, including our senior secured credit facility, the indentures governing the Unsecured Notes and the First and a Half Lien Notes, to incur additional indebtedness that may restrict payments from those subsidiaries to us. We cannot assure you that agreements governing current and future indebtedness of our subsidiaries will permit those subsidiaries to provide us with sufficient cash to fund our debt service payments.

Our subsidiaries are legally distinct from us and, except for our existing and future subsidiaries that are guarantors of our indebtedness, including our senior secured credit facility, the Unsecured Notes and the First and a Half Lien Notes, have no obligation, contingent or otherwise, to pay amounts due on our debt or to make funds available to us for such payment.

 

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Apollo is our controlling stockholder and Paulson may become a significant stockholder. There can be no assurance that Apollo and Paulson will act in our best interests as opposed to their own best interests.

Because of its position as our controlling stockholder, to the extent not otherwise limited in our senior secured credit agreement or our indentures, Apollo is able to exercise significant control over decisions affecting us, including:

 

   

our direction and policies, including the appointment and removal of officers;

 

   

mergers or other business combinations and opportunities involving us;

 

   

further issuance of capital stock or other equity or debt securities by us;

 

   

payment of dividends; and

 

   

approval of our business plans and general business development.

In addition, Paulson & Co. Inc., on behalf of the several investment funds and accounts managed by it (together with such investment funds and accounts, “Paulson”) owns Convertible Notes that may be converted into 21.5% of the total outstanding shares of Holdings common stock on an as converted basis assuming that all Convertible Notes are converted into shares of Class A Common Stock (as defined below). Pursuant to the Paulson Securityholders Agreement (as defined below), Paulson also has the right to nominate a member of our board of directors or designate a non-voting observer to attend meetings of our board of directors and have certain other rights with respect to issuances of our equity and debt securities.

Even if all of the outstanding Convertible Notes held by parties other than Apollo were converted into Class A Common Stock, which has one vote per share, Apollo, by virtue of its ownership of shares of Class B Common Stock (as defined below), which has five votes per share, would continue to control a majority of the voting power of the outstanding Common Stock. In addition, if all of the Convertible Notes were converted into Class A Common Stock, all of the Class B Common Stock would automatically convert into shares of Class A Common Stock and Apollo would then hold 66.2% of the outstanding shares of Class A Common Stock.

The concentration of ownership held by Apollo could delay, defer or prevent a change of control of us or impede a merger, takeover or other business combination that may be otherwise favorable to us. In addition, pursuant to Holdings’ Amended and Restated Certificate of Incorporation, Apollo has the right to, and will have no duty to abstain from, exercising such right to, conduct business with any business that is competitive or in the same line of business as us, do business with any of our clients, customers or vendors, or make investments in the kind of property in which we may make investments. Apollo is in the business of making or advising on investments in companies and may hold, and may from time to time in the future acquire, interests in or provide advice to businesses that directly or indirectly compete with certain portions of our business or are suppliers or customers of ours. Apollo may also pursue acquisitions that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. So long as Apollo continues to own a significant amount of the equity of Holdings, even if such amount is less than 50%, Apollo will continue to be able to strongly influence or effectively control our decisions.

Because our equity securities are not registered under the Exchange Act and are not listed on any U.S. securities exchange, we are not subject to any of the corporate governance requirements of any U.S. securities exchanges.

If we encounter financial difficulties, or we are unable to pay our debts as they mature, the interests of our equity holders may conflict with those of the holders of first lien indebtedness under our senior secured credit facility, the First and a Half Lien Notes, the Unsecured Notes or any other holder of our debt and such equity holders have no obligation to provide any additional equity or any debt financing to us.

 

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We do not know if an active trading market will develop or be maintained for any of our Unsecured Notes or the First and a Half Lien Notes.

There can be no assurance that an active market for any of our Unsecured Notes or the First and a Half Lien Notes will develop or be maintained. Following the Refinancing Transactions, the aggregate outstanding principal amount of each series of Existing Notes and Extended Maturity Notes is significantly lower than the aggregate outstanding principal amount of the Existing Notes prior to the consummation of the Debt Exchange Offering. In the case of each of the 10.50% Senior Notes and the Senior Toggle Notes, the aggregate principal amount outstanding of such series is less than $65 million and in the case of the 13.375% Senior Subordinated Notes, there is only approximately $10 million in aggregate principal amount outstanding. Additionally, the Convertible Notes and the First and a Half Lien Notes are new issues of securities. The liquidity of any market for any series of our notes will depend on a number of factors, including:

 

   

the number of holders of such notes and the aggregate principal amount of such series;

 

   

our operating performance, financial condition or prospects;

 

   

the market for similar securities;

 

   

the interest of securities dealers in making a market in such series of notes; and

 

   

prevailing interest rates.

The market for any series of our notes, similar to other non-investment grade debt, may be subject to disruptions that may cause substantial volatility in the prices of any such series and any disruptions may adversely affect the prices at which notes may be sold.

Risks relating to our business

The residential real estate market is cyclical and we are negatively impacted by downturns in this market.

The residential real estate market tends to be cyclical and typically is affected by changes in general economic conditions which are beyond our control. The U.S. residential real estate market has recently shown some signs of stabilizing from a lengthy and deep downturn that began in the second half of 2005. However, we cannot predict when the market and related economic forces will return the U.S. residential real estate industry to a period of sustained growth.

Any of the following could halt or limit a recovery in the housing market and have a material adverse effect on our business by causing a lack of sustained growth or a decline in the number of homesales and/or prices which, in turn, could adversely affect our revenues and profitability:

 

   

continued high unemployment;

 

   

a period of slow economic growth or recessionary conditions;

 

   

weak credit markets;

 

   

a low level of consumer confidence in the economy and/or the residential real estate market;

 

   

rising mortgage interest rates;

 

   

instability of financial institutions;

 

   

legislative, tax or regulatory changes that would adversely impact the residential real estate market, including but not limited to potential reform relating to Fannie Mae, Freddie Mac and other government sponsored entities that provide liquidity to the U.S. housing and mortgage markets;

 

   

increasing mortgage rates and down payment requirements and/or reduced availability of mortgage financing, including but not limited to the potential impact of various provisions of the Dodd-Frank Act or other legislation that may be enacted to reform the U.S. housing finance market, including restrictions imposed on mortgage originators as well as retention levels required to be maintained by sponsors to securitize mortgages;

 

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excessive or insufficient regional home inventory levels;

 

   

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;

 

   

adverse changes in local or regional economic conditions;

 

   

the inability or unwillingness of homeowners to enter into homesale transactions due to negative equity in their existing homes;

 

   

a decrease in the affordability of homes;

 

   

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

 

   

local, state and federal government regulation that burden residential real estate transactions or ownership;

 

   

shifts in populations away from the markets that we or our franchisees serve;

 

   

individual tax law changes, including potential limits or elimination of the deductibility of certain mortgage interest expense, the application of the alternative minimum tax, real property taxes and employee relocation expenses;

 

   

decreasing home ownership rates, declining demand for real estate and changing social attitudes toward home ownership;

 

   

commission pressure from brokers who discount their commissions; and/or

 

   

acts of God, such as hurricanes, earthquakes and other natural disasters that disrupt local or regional real estate markets.

Recently, banks and other lenders have come under investigations for alleged improper support for foreclosure actions. As a result, the foreclosure process in many areas has slowed and may face ongoing disruption. 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.

Our success is largely dependent on the efforts and abilities of the independent sales associates retained by company owned brokerage offices and by our franchisees. The ability of our company owned brokerage offices and our franchisees to retain independent sales associates is generally subject to numerous factors, including the compensation they receive and their perception of brand value. Given our high degree of leverage and negative perceptions in the media relating to our financial condition, neither our company owned brokerage offices or our independent franchisees may be successful in attracting or maintaining independent sales associates. If we or our franchisees fail to attract and retain independent sales associates, our business may be materially adversely affected.

A prolonged decline or lack of sustained growth in the number of homesales and/or prices would adversely affect our revenues and profitability.

Based upon data published by NAR, from 2005 to 2010, annual US existing homesale units declined by 31% and the median homesale price declined by 21%. Our Company’s revenues for the year ended December 31, 2010 compared to the year ended December 31, 2007, on a pro forma combined basis, decreased approximately 32%. A further decline or lack of sustained growth in existing homesales, a continued decline in home prices or a decline in commission rates charged by brokers would further 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

 

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services and reducing the referral fees earned by our relocation services business. For example, for 2010, a 100 basis point (or 1%) decline in either our homesale sides or the average selling price of closed homesale transactions, with all else being equal, would have decreased EBITDA by $2 million for our Real Estate Franchise Services segment and $9 million for our Company Owned Real Estate Brokerage Services segment.

Our company owned brokerage operations are subject to geographic and high-end real estate market risks, which could continue to adversely affect our revenues and profitability.

Our subsidiary, NRT, owns real estate brokerage offices located in and around large metropolitan areas in the U.S. Local and regional economic conditions in these locations could differ materially from prevailing conditions in other parts of the country. NRT has more offices and realizes more of its revenues in California, Florida and the New York metropolitan area than any other regions in the country. For the year ended December 31, 2010, NRT realized approximately 63% of its revenues from California (27%), the New York metropolitan area (26%) and Florida (10%). A further downturn in residential real estate demand or economic conditions in these regions could result in a further decline in NRT’s total gross commission income and have a material adverse effect on us. In addition, given the significant geographic overlap of our title and settlement services business with our company owned brokerage offices, such regional declines affecting our company owned brokerage operations could have an adverse effect on our title and settlement services business as well. A further downturn in residential real estate demand or economic conditions in these states could continue to result in a decline in our overall revenues and have a material adverse effect on us.

NRT has a significant concentration of transactions at the higher end of the U.S. real estate market. A shift in NRT’s mix of property transactions from the high range to lower and middle range homes would adversely affect the average price of NRT’s closed homesales.

Loss or attrition among our senior management or other key employees could adversely affect our financial performance.

Our success is largely dependent on the efforts and abilities of our senior management and other key employees. Our ability to retain our employees is generally subject to numerous factors, including the compensation and benefits we pay, the mix between the fixed and variable compensation we pay our employees and prevailing compensation rates. Given the lengthy and prolonged downturn in the real estate market and the cost-cutting measures we implemented during the downturn, certain of our employees have received, and may in the near term continue to receive, less variable compensation. As such, we may suffer significant attrition among our current key employees. If we were to lose key employees and not promptly fill their positions with comparably qualified individuals, our business may be materially adversely affected.

Tightened mortgage underwriting standards could continue to reduce homebuyers’ ability to access the credit market on reasonable terms.

During the past several years, many lenders have significantly tightened their underwriting standards, and many subprime and other alternative mortgage products are no longer being made available in the marketplace. If these trends continue and mortgage loans continue to be difficult to obtain, including in the jumbo mortgage markets important to our higher value and luxury brands, the ability and willingness of prospective buyers to finance home purchases or to sell their existing homes will be adversely affected, which will adversely affect our operating results.

Adverse developments in general business, economic and political conditions could have a material adverse effect on our financial condition and our results of operations.

Our business and operations and those of our franchisees are sensitive to general business and economic conditions in the U.S. and worldwide. These conditions include short-term and long-term interest rates, inflation, fluctuations in debt and equity capital markets, consumer confidence and the general condition of the U.S. and world economy.

 

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Dramatic declines in the housing market during the past several years, with falling home prices and increasing foreclosures, including disruptions and delays occasioned by recent investigations into alleged improper foreclosure processes, and unemployment, have resulted in significant write-downs of asset values by financial institutions, including government-sponsored entities and major commercial and investment banks as well as repayment and reimbursement arrangements between the originating banks and Fannie Mae and Freddie Mac. These actions, which initially impacted mortgage-backed securities, spread to credit default swaps and other derivative securities and caused many financial institutions to seek additional capital, to merge with larger and stronger institutions and, in some cases, to fail. Reflecting concern about the stability of the financial markets generally and the strength of counterparties, many lenders and institutional investors reduced, and in some cases, ceased to provide funding to borrowers, including other financial institutions. Lack of available credit or lack of confidence in the financial sector could materially and adversely affect our business, financial condition and results of operations.

A host of factors beyond our control could cause fluctuations in these conditions, including the political environment and acts or threats of war or terrorism. Adverse developments in these general business and economic conditions could have a material adverse effect on our financial condition and our results of operations.

Recent U.S. Governmental actions to assist in the stabilization and/or recovery of the residential real estate market may not be successful; reform of Freddie Mac and Fannie Mae could have a material impact on our operations.

The U.S. government implemented certain actions during the past several years to assist in a stabilization and/or a recovery of the residential real estate market. These measures have included: (1) the placement of Fannie Mae and Freddie Mac in conservatorship in September 2008 and the funding of over $130 billion to these entities to backstop shortfalls in their capital requirements; (2) the establishment, and subsequent expansion and extension, of a federal homebuyer tax credit for qualified buyers (that, as extended, required signed contracts on or before April 30, 2010); (3) as part of a broader plan to bring stability to credit markets and stimulate the housing market, the purchase of mortgage-backed securities by the Federal Reserve in an attempt to maintain low mortgage rates (the first phase of which ended on March 31, 2010); (4) the continuation of the 2008 higher loan limits for FHA, Freddie Mac and Fannie Mae loans through September 30, 2011; and (5) the availability of low-cost refinancing through Fannie Mae and Freddie Mac to certain homeowners negatively impacted by falling home prices, encouraging lenders to modify loan terms with borrowers at risk of foreclosure or already in foreclosure. There can be no assurance that these actions or any other governmental action will continue to stabilize the housing market or that any recovery in this market will be sustained as these programs either wind down or expire by their terms.

Moreover, Congress has recently held hearings on the future of Freddie Mac and Fannie Mae and other government sponsored entities or GSEs with a view towards further legislative reform. On February 11, 2011, the Obama Administration issued a report to the U.S. Congress outlining proposals to reform the U.S. housing finance market, including, among other things, reform designed to reduce government support for housing finance and the winding down of Freddie Mac and Fannie Mae over a period of years. Two significant questions that need to be addressed in any such reform are: (1) will banks and other private sources of capital be able to fill homebuyers’ needs as the government seeks to pull back some of the housing mortgage market support and (2) will these other sources of capital be available at rates which are reasonably attractive to potential homebuyers. Legislation, if enacted, which curtails Freddie Mac and/or Fannie Mae’s activities and/or results in the wind down of these entities could increase mortgage costs and could result in more stringent underwriting guidelines imposed by lenders, either of which could materially adverse affect the housing market in general and our operations in particular. Given the current uncertainty with respect to the extent, if any, of such reform, it is difficult to predict either the long-term or short-term impact of government action that may be taken.

 

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The Dodd-Frank Act and other financial reform legislation may, among other things, result in new rules and regulations that may adversely affect the housing industry.

On July 21, 2010, the Dodd-Frank Act was signed into law for the express purpose of regulating the financial services industry and also establishes an independent federal bureau of consumer financial protection to enforce laws involving consumer financial products and services, including mortgage finance. The bureau is empowered with examination and enforcement authority. The Dodd-Frank Act also establishes new standards and practices for mortgage originators, including determining a prospective borrower’s ability to repay their mortgage, removing incentives for higher cost mortgages, prohibiting prepayment penalties for non-qualified mortgages, prohibiting mandatory arbitration clauses, requiring additional disclosures to potential borrowers and restricting the fees that mortgage originators may collect. While we are continuing to evaluate all aspects of the Dodd-Frank Act, such legislation and regulations promulgated pursuant to such legislation as well as other legislation that may be enacted to reform the U.S. housing finance market could materially and adversely affect the mortgage and housing industries, result in heightened federal regulation and oversight of the mortgage and housing industries, increase mortgage costs and result in increased costs and potential litigation for housing market participants.

Certain provisions of the Dodd-Frank Act may impact the operation and practices of Fannie Mae and Freddie Mac and require sponsors of securitizations to retain a portion of the economic interest in the credit risk associated with the assets securitized by them. Federal regulators have been authorized to provide exceptions to the risk retention requirements for certain “qualified mortgages” and mortgages meeting certain underwriting standards prescribed in such regulations, however, it is unclear what types of mortgage loans will be encompassed by future regulations related to the definition of “qualified mortgages.” If mortgage loans originated for purchasers of homes are sold into GSE-sponsored mortgage-backed securities that do not meet the definition of a “qualified mortgage,” then the GSEs may be required to retain a portion of the risk of assets they securitize, which may in turn substantially reduce or eliminate the GSEs’ ability to issue mortgage-backed securities. Substantial reduction in, or the elimination of, GSE demand for mortgage loans could have a material adverse effect on the mortgage industry and the housing industry in general. It is also unclear what effect future laws or regulations may have on the ability of the GSEs to issue mortgage-backed securities.

Monetary policies of the federal government and its agencies may have a material impact on our operations.

Our business is significantly affected by the monetary policies of the federal government and its agencies. We are particularly affected by the policies of the Federal Reserve Board, which regulates the supply of money and credit in the U.S. The Federal Reserve Board’s policies affect the real estate market through their effect on interest rates as well as the pricing on our interest-earning assets and the cost of our interest-bearing liabilities.

We are affected by any rising interest rate environment. Changes in the Federal Reserve Board’s policies, the interest rate environment and mortgage market are beyond our control, are difficult to predict and could have a material adverse effect on our business, results of operations and financial condition. Additionally, the possibility of the elimination of the mortgage interest deduction could have an adverse effect on the housing market by reducing incentives for buying or refinancing homes and negatively affecting property values.

Competition in the residential real estate and relocation business is intense and may adversely affect our financial performance.

Competition in the residential real estate services business is intense. As a real estate brokerage franchisor, our products are our brand names and the support services we provide to our franchisees. Upon the expiration of a franchise agreement, a franchisee may choose to franchise with one of our competitors or operate as an independent broker. Competitors may offer franchisees whose franchise agreements are expiring similar products and services at rates that are lower than we charge. Our largest national competitors in this industry include The Prudential Real Estate Affiliates, Inc., Real Living (which includes the franchise business that had been

 

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conducted by GMAC Real Estate, LLC), RE/MAX and Keller Williams Realty, Inc. Some of these companies may have greater financial resources than we do, including greater marketing and technology budgets, and may be less leveraged. Regional and local franchisors provide additional competitive pressure in certain areas. To remain competitive in the sale of franchises and to retain our existing franchisees, we may have to reduce the fees we charge our franchisees to be competitive with those charged by competitors, which may accelerate if market conditions further deteriorate.

Our company owned brokerage business, like that of our franchisees, is generally in intense competition. We compete with other national independent real estate organizations, including Home Services of America, franchisees of our brands and of other national real estate franchisors, franchisees of local and regional real estate franchisors, regional independent real estate organizations, discount brokerages, and smaller niche companies competing in local areas. Competition is particularly severe in the densely populated metropolitan areas in which we operate. In addition, the real estate brokerage industry has minimal barriers to entry for new participants, including participants pursuing non-traditional methods of marketing real estate, such as Internet-based brokerage or brokers who discount their commissions. Discount brokers have had varying degrees of success and while they have been negatively impacted by the prolonged downturn in the residential housing market, they may increase their market share in the future. Real estate brokers compete for sales and marketing business primarily on the basis of services offered, reputation, personal contacts and brokerage commission. As with our real estate franchise business, a decrease in the average brokerage commission rate may adversely affect our revenues. We also compete for the services of qualified licensed independent sales associates. Some of the firms competing for sales associates use a different model of compensating agents, in which agents are compensated for the revenue generated by other agents that they recruit to those firms. This business model may be appealing to certain agents and hinder our ability to attract and retain those agents. Competition for sales associates could reduce the commission amounts retained by our company after giving effect to the split with independent sales associates and possibly increase the amounts that we spend on marketing. Our average homesale commission rate per side in our Company Owned Real Estate Services segment has declined from 2.62% in 2002 to 2.48% in 2010.

In our relocation services business, we compete primarily with global and regional outsourced relocation service providers. The larger outsourced relocation service providers that we compete with include SIRVA, Inc., Weichert Relocation Resources, Inc. and Prudential Real Estate and Relocation Services, Inc.

The title and settlement services business is highly competitive and fragmented. The number and size of competing companies vary in the different areas in which we conduct business. We compete with other title insurers, title agents and vendor management companies. The title and settlement services business competes with a large, fragmented group of smaller underwriters and agencies as well as national competitors.

Several of our businesses are highly regulated and any failure to comply with such regulations or any changes in such regulations could adversely affect our business.

Several of our businesses are highly regulated. The sale of franchises is regulated by various state laws as well as by the FTC. The FTC requires that franchisors make extensive disclosure to prospective franchisees but does not require registration. A number of states require registration or disclosure in connection with franchise offers and sales. In addition, several states have “franchise relationship laws” or “business opportunity laws” that limit the ability of franchisors to terminate franchise agreements or to withhold consent to the renewal or transfer of these agreements. While we believe that our franchising operations are in compliance with such existing regulations, we cannot predict the effect any existing or future legislation or regulation may have on our business operation or financial condition.

Our real estate brokerage business must comply with the requirements governing the licensing and conduct of real estate brokerage and brokerage-related businesses in the jurisdictions in which we do business. These laws and regulations contain general standards for and prohibitions on the conduct of real estate brokers and sales associates, including those relating to licensing of brokers and sales associates, fiduciary and agency duties,

 

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administration of trust funds, collection of commissions, advertising and consumer disclosures. Under state law, our real estate brokers have the duty to supervise and are responsible for the conduct of their brokerage business.

Several of the litigation matters we are involved with allege claims based upon breaches of fiduciary duties by our licensed brokers, violations of state laws relating to business practices or consumer disclosures and with respect to compliance with wage and hour regulations. We cannot predict with certainty the cost of defense or the ultimate outcome of these or other litigation matters filed by or against us, including remedies or awards, and adverse results in any such litigation may harm our business and financial condition.

Our company owned real estate brokerage business, our relocation business, our title and settlement service business and the businesses of our franchisees (excluding commercial brokerage transactions) must comply with RESPA. RESPA and comparable state statutes, among other things, restrict payments which real estate brokers, agents and other settlement service providers may receive for the referral of business to other settlement service providers in connection with the closing of real estate transactions. Such laws may to some extent restrict preferred vendor arrangements involving our franchisees and our company owned brokerage business. RESPA and similar state laws also require timely disclosure of certain relationships or financial interests that a broker has with providers of real estate settlement services.

Our title insurance business also is subject to regulation by insurance and other regulatory authorities in each state in which we provide title insurance. State regulations may impede or impose burdensome conditions on our ability to take actions that we may want to take to enhance our operating results.

There is a risk that we could be adversely affected by current laws, regulations or interpretations or that more restrictive laws, regulations or interpretations will be adopted in the future that could make compliance more difficult or expensive. There is also a risk that a change in current laws could adversely affect our business. For example, the “Bush tax cuts,” which have reduced ordinary income and capital gains rates on federal taxes, were recently extended until the end of 2012, after which these tax cuts are due to expire. There can be no assurance that these tax cuts will be extended or if extended, the extension may apply only to a portion of the tax cuts and/or the extension could be limited in duration. Other potential federal tax legislation includes the elimination or narrowing of mortgage tax deductions. Higher federal income tax rates or further limits on mortgage tax deductions could negatively impact the purchase and sale of residential homes. We cannot assure you that future legislative or regulatory changes will not adversely affect our business operations.

In April 2007, the FTC and Justice Department issued a report on competition in the real estate brokerage industry and concluded that while the industry had undergone substantial changes in prior years, particularly with the increasing use of the Internet, competition has been hindered as a result of actions taken by some real estate brokers, acting through multiple listing services and NAR, state legislatures, and real estate commissions, and recommend, among other things, that the agencies should continue to monitor the cooperative conduct of private associations of real estate brokers, and bring enforcement actions in appropriate circumstances.

In addition, regulatory authorities have relatively broad discretion to grant, renew and revoke licenses and approvals and to implement regulations. Accordingly, such regulatory authorities could prevent or temporarily suspend us from carrying on some or all of our activities or otherwise penalize us if our financial condition or our practices were found not to comply with the then current regulatory or licensing requirements or any interpretation of such requirements by the regulatory authority. Our failure to comply with any of these requirements or interpretations could limit our ability to renew current franchisees or sign new franchisees or otherwise have a material adverse effect on our operations.

We are also, to a lesser extent, subject to various other rules and regulations such as:

 

   

the Gramm-Leach-Bliley Act which governs the disclosure and safeguarding of consumer financial information;

 

   

various state and federal privacy laws;

 

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the USA PATRIOT Act;

 

   

restrictions on transactions with persons on the Specially Designated Nationals and Blocked Persons list promulgated by the Office of Foreign Assets Control of the Department of the Treasury;

 

   

federal and state “Do Not Call,” “Do Not Fax,” and “Do Not E-Mail” laws;

 

   

“controlled business” statutes, which impose limitations on affiliations between providers of title and settlement services, on the one hand, and real estate brokers, mortgage lenders and other real estate providers, on the other hand, or similar laws or regulations that would limit or restrict transactions among affiliates in a manner that would limit or restrict collaboration among our businesses;

 

   

the Affiliated Marketing Rule, which prohibits or restricts the sharing of certain consumer credit information among affiliated companies without notice and/or consent of the consumer;

 

   

the Fair Housing Act;

 

   

laws and regulations, including the Foreign Corrupt Practices Act, that can impair significant sanctions on improper payments to foreign officials or agents;

 

   

laws and regulations in jurisdictions outside the United States in which we do business;

 

   

state and federal employment laws and regulations, including any changes that would require classification of independent contractors to employee status, and wage and hour regulations; and

 

   

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

Our failure to comply with any of the foregoing laws and regulations may subject us to fines, penalties, injunctions and/or potential criminal violations. Any changes to these laws or regulations or any new laws or regulations may make it more difficult for us to operate our business and may have a material adverse effect on our operations.

Seasonal fluctuations in the residential real estate brokerage and relocation businesses could adversely affect our business.

The residential real estate brokerage business is subject to seasonal fluctuations. Historically, real estate brokerage revenues and relocation revenues have been strongest in the second and third quarters of the calendar year (although, due to the expiration of the homebuyer tax credit, the third quarter of this year was adversely affected by the acceleration of activity into the first half of this fiscal year). However, many of our expenses, such as rent and personnel, are fixed and cannot be reduced during a seasonal slowdown. As a result, we may be required to borrow in order to fund operations during seasonal slowdowns or at other times. Since the terms of our indebtedness may restrict our ability to incur additional debt, we cannot assure you that we would be able to borrow sufficient amounts. Our inability to finance our funding needs during a seasonal slowdown or at other times would have a material adverse effect on us.

Changes in accounting standards, subjective assumptions and estimates used by management related to complex accounting matters could have an adverse effect on results of operations.

Generally accepted accounting principles in the United States and related accounting pronouncements, implementation guidance and interpretations with regard to a wide range of matters, such as stock-based compensation, asset impairments, valuation reserves, income taxes and fair value accounting, are highly complex and involve many subjective assumptions, estimates and judgments made by management. Changes in these rules or their interpretations or changes in underlying assumptions, estimates or judgments to be made by management could significantly change our reported results.

We may not have the ability to complete future acquisitions; we may not be successful in developing the Better Homes and Gardens Real Estate brand.

We have pursued an active acquisition strategy as a means of strengthening our businesses and have sought to integrate acquisitions into our operations to achieve economies of scale. Our company owned brokerage

 

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business has completed over 350 acquisitions since its formation in 1997 and, in 2004, we acquired the Sotheby’s International Realty ® residential brokerage business and entered into an exclusive license agreement for the rights to the Sotheby’s International Realty ® trademarks with which we are in the process of building the Sotheby’s International Realty ® franchise system. In January 2006, we acquired our title insurance underwriter and certain title agencies. As a result of these and other acquisitions, we have derived a substantial portion of our growth in revenues and net income from acquired businesses. The success of our future acquisition strategy will continue to depend upon our ability to find suitable acquisition candidates on favorable terms and to finance and complete these transactions.

In October 2007, we entered into a long-term agreement to license the Better Homes and Gardens ® Real Estate brand from Meredith. We seek to build a new international residential real estate franchise company using the Better Homes and Gardens ® Real Estate brand name. The licensing agreement between us and Meredith became operational on July 1, 2008 and is for a 50-year term, with a renewal term for another 50 years at our option. We may not be able to successfully develop the brand in a timely manner or at all. Our inability to complete acquisitions or to successfully develop the Better Homes and Gardens ® Real Estate brand would have a material adverse effect on our growth strategy.

We may not realize anticipated benefits from future acquisitions.

Integrating acquired companies involves complex operational and personnel-related challenges. Future acquisitions may present similar challenges and difficulties, including:

 

   

the possible defection of a significant number of employees and independent sales associates;

 

   

increased amortization of intangibles;

 

   

the disruption of our respective ongoing businesses;

 

   

possible inconsistencies in standards, controls, procedures and policies;

 

   

failure to maintain important business relationships and contracts;

 

   

unanticipated costs of terminating or relocating facilities and operations;

 

   

unanticipated expenses related to integration; and

 

   

potential unknown liabilities associated with acquired businesses.

A prolonged diversion of management’s attention and any delays or difficulties encountered in connection with the integration of any business that we have acquired or may acquire in the future could prevent us from realizing the anticipated cost savings and revenue growth from our acquisitions.

We may be unable to maintain anticipated cost savings and other benefits from our restructuring activities.

We are committed to various restructuring initiatives targeted at reducing costs and enhancing organizational effectiveness while consolidating existing processes and facilities. We may not be able to achieve or maintain the anticipated cost savings and other benefits from these restructuring initiatives that are described elsewhere in this Annual Report. If our cost savings or the benefits are less than our estimates or take longer to implement than we project, the savings or other benefits we projected may not be fully realized.

Our financial results are affected by the operating results of franchisees.

Our real estate franchise services segment receives revenue in the form of royalties, which are based on a percentage of gross commission income earned by our franchisees. Accordingly, the financial results of our real estate franchise services segment are dependent upon the operational and financial success of our franchisees. If industry trends or economic conditions worsen for franchisees, their financial results may worsen and our royalty

 

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revenues may decline. In addition, we may have to increase our bad debt and note reserves. We may also have to terminate franchisees more frequently due to non-reporting and non-payment. Further, if franchisees fail to renew their franchise agreements, or if we decide to restructure franchise agreements in order to induce franchisees to renew these agreements, then our royalty revenues may decrease.

Our franchisees and independent sales associates could take actions that could harm our business.

Our franchisees are independent business operators and the sales associates that work with our company owned brokerage operations are independent contractors, and, as such, neither are our employees, and we do not exercise control over their day-to-day operations. Our franchisees may not successfully operate a real estate brokerage business in a manner consistent with our standards, or may not hire and train qualified independent sales associates or employees. If our franchisees and independent sales associates were to provide diminished quality of service to customers, our image and reputation may suffer materially and adversely affect our results of operations.

Additionally, franchisees and independent sales associates may engage or be accused of engaging in unlawful or tortious acts such as, for example, violating the anti-discrimination requirements of the Fair Housing Act. Such acts or the accusation of such acts could harm our and our brands’ image, reputation and goodwill.

Franchisees, as independent business operators, may from time to time disagree with us and our strategies regarding the business or our interpretation of our respective rights and obligations under the franchise agreement. This may lead to disputes with our franchisees and we expect such disputes to occur from time to time in the future as we continue to offer franchises. To the extent we have such disputes, the attention of our management and our franchisees will be diverted, which could have a material adverse effect on our business, financial condition, results of operations or cash flows.

Our relocation business is subject to risks related to acquiring, carrying and reselling real estate.

On January 21, 2010, Cartus acquired a global relocation service provider, Primacy, which is a supplier of relocation services to corporate clients as well as certain U.S. government agencies under “at risk” contracts. At December 31, 2010, Primacy was merged into Cartus. Under “at risk” contracts, our relocation business enters into homesale transactions whereby we acquire the homes being sold by relocating employees and bear the risk of all expenses associated with acquiring, carrying and selling the homes, including potential loss on sale. In “at risk” homesale transactions where the ultimate third party buyer is not under contract at the time we become the owner of the home, we are subject to the market risk that the home we purchase will lose value while we are carrying it as well as the risk that our carrying costs will increase, both of which would increase the costs that we may incur on the home. A significant increase in the number of “at risk” home sale transactions could have a material adverse effect on our relocation business if housing prices continue to fall and we are unable to sell our at-risk homes in a timely manner or at favorable prices.

Clients of our relocation business may terminate their contracts at any time.

Substantially all of our contracts with our relocation clients are terminable at any time at the option of the client. If a client terminates its contract, we will only be compensated for all services performed up to the time of termination and reimbursed for all expenses incurred up to the time of termination. If a significant number of our relocation clients terminate their contracts with us, our results of operations would be materially adversely affected.

Our marketing arrangement with PHH Home Loans may limit our ability to work with other key lenders to grow our business.

Under our Strategic Relationship Agreement relating to PHH Home Loans, we are required to recommend PHH Home Loans as originator of mortgage loans to the independent sales associates, customers and employees of our company owned and operated brokerage offices. This provision may limit our ability to enter into beneficial business relationships with other lenders and mortgage brokers.

 

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We do not control our joint venture PHH Home Loans and management of that venture may make decisions that are contrary to our best interests.

Under our Operating Agreement with PHH relating to PHH Home Loans, we own a 49.9% equity interest but do not have control of the operations of the venture. Rather, our joint venture partner, PHH, is the managing partner of the venture and may make decisions with respect to the operation of the venture, which may be contrary to our best interests and may adversely affect our results of operations. In addition, our joint venture may be materially adversely impacted by changes affecting the mortgage industry, including but not limited to regulatory changes, increases in mortgage interest rates and decreases in operating margins.

We may experience significant claims relating to our operations and losses resulting from fraud, defalcation or misconduct.

We issue title insurance policies which provide coverage for real property to mortgage lenders and buyers of real property. When acting as a title agent issuing a policy on behalf of an underwriter, our insurance risk is typically limited to the first $5,000 of claims on any one policy, though our insurance risk is not limited if we are negligent. The title underwriter which we acquired in January 2006 typically underwrites title insurance policies of up to $1.5 million. For policies in excess of $1.5 million, we typically obtain a reinsurance policy from a national underwriter to reinsure the excess amount. To date, our title underwriter has experienced claims losses that are significantly below the industry average; our claims experience could increase in the future, which could negatively impact the profitability of that business. We may also be subject to legal claims arising from the handling of escrow transactions and closings. Our subsidiary, NRT, carries errors and omissions insurance for errors made during the real estate settlement process of $15 million in the aggregate, subject to a deductible of $1 million per occurrence. In addition, we carry an additional errors and omissions insurance policy for Realogy and its subsidiaries for errors made for real estate related services up to $35 million in the aggregate, subject to a deductible of $2.5 million per occurrence. This policy also provides excess coverage to NRT creating an aggregate limit of $50 million, subject to the NRT deductible of $1 million per occurrence. The occurrence of a significant title or escrow claim in excess of our insurance coverage in any given period could have a material adverse effect on our financial condition and results of operations during the period.

Fraud, defalcation and misconduct by employees are also risks inherent in our business. We carry insurance covering the loss or theft of funds of up to $30 million annually in the aggregate, subject to a deductible of $1 million per occurrence. To the extent that any loss or theft of funds substantially exceeds our insurance coverage, our business could be materially adversely affected.

In addition, we rely on the collection and use of personally identifiable information from customers to conduct our business. We disclose our information collection and dissemination practices in a published privacy statement on our websites, which we may modify from time to time. We may be subject to legal claims, government action and damage to our reputation if we act or are perceived to be acting inconsistently with the terms of our privacy statement, customer expectations or the law. Further, we may be subject to claims to the extent individual employees or independent contractors breach or fail to adhere to company policies and practices and such actions jeopardize any personally identifiable information. In addition, concern among potential home buyers or sellers about our privacy practices could keep them from using our services or require us to incur significant expense to alter our business practices or educate them about how we use personally identifiable information.

We could be subject to severe losses if banks do not honor our escrow and trust deposits.

Our company owned brokerage business and our title and settlement services business act as escrow agents for numerous customers. As an escrow agent, we receive money from customers to hold until certain conditions are satisfied. Upon the satisfaction of those conditions, we release the money to the appropriate party. We deposit this money with various banks and while these deposits are not assets of the Company (and therefore excluded

 

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from our consolidated balance sheet), we remain contingently liable for the disposition of these deposits. The banks may hold a significant amount of these deposits in excess of the federal deposit insurance limit. If any of our depository banks were to become unable to honor our deposits, customers could seek to hold us responsible for these deposits and, if the customers prevailed in their claims, we could be subject to severe losses. These escrow and trust deposits totaled $190 million and $161 million at December 31, 2010 and December 31, 2009, respectively.

Title insurance regulations limit the ability of our insurance underwriter to pay cash dividends to us.

Our title insurance underwriter is subject to regulations that limit its ability to pay dividends or make loans or advances to us, principally to protect policy holders. Generally, these regulations limit the total amount of dividends and distributions to a certain percentage of the insurance subsidiary’s surplus, or 100% of statutory operating income for the previous calendar year. These restrictions could limit our ability to receive dividends from our insurance underwriter , make acquisitions or otherwise grow our business.

We may be unable to continue to securitize certain of our relocation assets, which may adversely impact our liquidity.

At December 31, 2010, $331 million of securitization obligations were outstanding through special purpose entities monetizing certain assets of our relocation services business under two lending facilities. We have provided a performance guaranty which guarantees the obligations of our Cartus subsidiary and its subsidiaries, as originator and servicer under the Apple Ridge securitization program. The securitization markets have experienced significant disruptions which may have the effect of increasing our cost of funding or reducing our access to these markets in the future. If we are unable to continue to securitize these assets, we may be required to find additional sources of funding which may be on less favorable terms or may not be available at all.

The occurrence of any trigger events under our Apple Ridge securitization facility could cause us to lose funding under that facility and therefore restrict our ability to fund the operation of our U.S. relocation business.

The Apple Ridge securitization facility, which we use to advance funds on behalf of certain U.S. clients of our relocation business in order to facilitate the relocation of their employees, contains terms which if triggered may result in a termination or limitation of new or existing funding under the facility and/or may result in a requirement that all collections on the assets be used to pay down the amounts outstanding under such facility. Some of the terms which could affect the availability of funds under the securitization facility include 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, the Unsecured Notes and other material indebtedness. Given the current economic conditions, there is an associated risk relating to compliance with the Apple Ridge securitization performance trigger relating to limits on “net credit losses” (the estimated losses incurred on securitization receivables that have been written off, net of recoveries of such receivables), as net credit losses may not exceed $750 thousand in any one month or $1.5 million in any trailing 12 month period. The Apple Ridge facility has trigger events based on change in control and cross-defaults to material indebtedness. The occurrence of a trigger event under the Apple Ridge securitization facility could restrict our ability to access new or existing funding under this facility and adversely affect the operation of our relocation business.

We are highly dependent on the availability of the asset-backed securities market to finance the operations of our relocation business, and disruptions in this market or any adverse change or delay in our ability to access the market could have a material adverse effect on our financial position, liquidity or results of operations.

Reduced investor demand for asset-backed securities could result in our having to fund our relocation assets until investor demand improves, but our capacity to fund our relocation assets is not unlimited. If we confront a

 

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reduction in borrowing capacity under the Apple Ridge facility due to a reduced demand for asset-backed securities, it could require us to reduce the amount of relocation assets we fund and to find alternative sources of funding for working capital needs. Adverse market conditions could also result in increased costs and reduced margins earned in connection with securitization transactions.

If we need to increase the funding available under the Apple Ridge securitization facility, such funding may not be available to us or, if available, on terms acceptable to us. In addition, our Apple Ridge securitization facility matures in April 2012. We could encounter difficulties in renewing this facility and if this source of funding is not available to us for any reason, we could be required to borrow under our revolving credit facility or incur other indebtedness to finance our working capital needs or we could require our clients to fund the home purchases themselves, which could have a material adverse effect on our ability to achieve our business and financial objectives.

Our international operations are subject to risks not generally experienced by our U.S. operations.

Our relocation services business operates worldwide, and to a lesser extent, our real estate franchise services segment has international operations. For the year ended December 31, 2010, revenues from these operations are approximately 2.5% of total revenues. Our international operations are subject to risks not generally experienced by our U.S. operations. The risks involved in our international operations that could result in losses against which we are not insured and therefore affect our profitability include:

 

   

fluctuations in foreign currency exchange rates;

 

   

exposure to local economic conditions and local laws and regulations, including those relating to our employees;

 

   

economic and/or credit conditions abroad;

 

   

potential adverse changes in the political stability of foreign countries or in their diplomatic relations with the U.S.;

 

   

restrictions on the withdrawal of foreign investment and earnings;

 

   

government policies against businesses owned by foreigners;

 

   

investment restrictions or requirements;

 

   

diminished ability to legally enforce our contractual rights in foreign countries;

 

   

difficulties in registering, protecting or preserving trade names and trademarks in foreign countries;

 

   

restrictions on the ability to obtain or retain licenses required for operation;

 

   

foreign exchange restrictions;

 

   

withholding and other taxes on remittances and other payments by subsidiaries; and

 

   

changes in foreign taxation structures.

We are subject to certain risks related to litigation filed by or against us, and adverse results may harm our business and financial condition.

We cannot predict with certainty the cost of defense, the cost of prosecution, insurance coverage or the ultimate outcome of litigation and other proceedings filed by or against us, including remedies or damage awards, and adverse results in such litigation and other proceedings may harm our business and financial condition. Such litigation and other proceedings may include, but are not limited to, actions relating to intellectual property, commercial arrangements, franchising arrangements, actions against our title company alleging it knew or should have known that others were committing mortgage fraud, standard brokerage disputes

 

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like the failure to disclose hidden defects in the property such as mold, vicarious liability based upon conduct of individuals or entities outside of our control, including franchisees and independent sales associates, antitrust claims, general fraud claims, and employment law, including claims challenging the classification of our sales associates as independent contractors. In the case of intellectual property litigation and proceedings, adverse outcomes could include the cancellation, invalidation or other loss of material intellectual property rights used in our business and injunctions prohibiting our use of business processes or technology that is subject to third party patents or other third party intellectual property rights. In addition, we may be required to enter into licensing agreements (if available on acceptable terms or at all) and pay royalties.

In 2002, Frank K. Cooper Real Estate #1, Inc. filed a putative class action (the “Cooper Litigation”) 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, breach of the implied duty of good faith and fair dealing, violation of the New Jersey Consumer Fraud Act and breach of 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 and otherwise improperly charged expenses to advertising funds. The complaint seeks unspecified compensatory and punitive damages, injunctive relief, interest, attorney’s fees and costs. The New Jersey Consumer Fraud Act provides for treble damages, attorney’s fees and costs as remedies for violation of the Act. On August 17, 2010, the court granted plaintiffs’ renewed motion to certify a class. The certified class includes Century 21 franchisees at any time between August 1, 1995 and April 17, 2002 whose franchise agreements contain New Jersey choice of law and venue provisions and who have not executed releases releasing the claim (unless the release was a provision of a franchise renewal agreement).

A case management order was entered on November 29, 2010 that includes, among other deadlines, a trial date of April 16, 2012. On December 20, 2010, the court held a status conference to address plaintiffs’ motion regarding notice to be issued to the class, the language of the notice, publication of the notice and how class members can opt out of the class. As directed by a court order, Century 21 has delivered to plaintiffs’ counsel and the court lists of the names and contact information for (1) franchisees that meet the class definition and (2) franchisees that would have met the class definition but for the fact that they signed a waiver of claims against Century 21. Pursuant to the court order, a notice of pendency of the action will be mailed to class members on March 4, 2011, and a summary of that notice will be published in various publications within 30 days of that mailing. Plaintiffs’ counsel has advised that it may file a motion requesting that notice be sent to all Century 21 franchisees during the class period, not solely those that meet the class definition. This case remains in its very early stages, with most of the effort in the past six months directed at class identification. Discovery on the merits is in its early stages. This class action involves substantial, complex litigation. Class action litigation is inherently unpredictable and subject to significant uncertainties. The resolution of the Cooper Litigation could result in substantial losses and we cannot assure you that such resolution will not have a material adverse effect on our results of operations, financial condition or liquidity.

We are reliant upon information technology to operate our business and maintain our competitiveness, and any disruption or reduction in our information technology capabilities could harm our business.

Our business depends upon the use of sophisticated information technologies and systems, including technology and systems utilized for communications, records of transactions, procurement, call center operations and administrative systems. The operation of these technologies and systems is dependent upon third party technologies, systems and services, for which there are no assurances of continued or uninterrupted availability and support by the applicable third party vendors on commercially reasonable terms. We also cannot assure you that we will be able to continue to effectively operate and maintain our information technologies and systems. In addition, our information technologies and systems are expected to require refinements and enhancements on an ongoing basis, and we expect that advanced new technologies and systems will continue to be introduced. We may not be able to obtain such new technologies and systems, or to replace or introduce new technologies and

 

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systems as quickly as our competitors or in a cost-effective manner. Also, we may not achieve the benefits anticipated or required from any new technology or system, and we may not be able to devote financial resources to new technologies and systems in the future.

In addition, our information technologies and systems are vulnerable to damage or interruption from various causes, including (1) natural disasters, war and acts of terrorism, (2) power losses, computer systems failure, Internet and telecommunications or data network failures, operator error, losses and corruption of data, and similar events and (3) computer viruses, penetration by individuals seeking to disrupt operations or misappropriate information and other physical or electronic breaches of security. We maintain certain disaster recovery capabilities for critical functions in most of our businesses, including certain disaster recovery services from International Business Machines Corporation. However, these capabilities may not successfully prevent a disruption to or material adverse effect on our businesses or operations in the event of a disaster or other business interruption. Any extended interruption in our technologies or systems could significantly curtail our ability to conduct our business and generate revenue. Additionally, our business interruption insurance may be insufficient to compensate us for losses that may occur.

We do not own two of our brands and must manage cooperative relationships with both owners.

The Sotheby’s International Realty ® and Better Homes and Gardens ® real estate brands are owned by the companies that founded these brands. We are the exclusive party licensed to run brokerage services in residential real estate under those brands, whether through our franchisees or our company owned operations. Our future operations and performance with respect to these brands requires the continued cooperation from the owners of those brands. In particular, Sotheby’s has the right to approve the master franchisors of, and the material terms of our master franchise agreements governing our relationships with, our Sotheby’s franchisees located outside the U.S., which approval cannot be unreasonably withheld or delayed. If Sotheby’s unreasonably withholds or delays its approval for new international master franchisors, our relationship with them could be disrupted. Any significant disruption of the relationships with the owners of these brands could impede our franchising of those brands and have a material adverse effect on our operations and performance.

The weakening or unavailability of our intellectual property rights could adversely impact our business.

Our trademarks, trade names, domain names, trade dress and other intellectual property rights are fundamental to our brands and our franchising business. The steps we take to obtain, maintain and protect our intellectual property rights may not be adequate and, in particular, we may not own all necessary registrations for our intellectual property. Applications we have filed to register our intellectual property may not be approved by the appropriate regulatory authorities. Our intellectual property rights may not be successfully asserted in the future or may be invalidated, circumvented or challenged. We may be unable to prevent third parties from using our intellectual property rights without our authorization or independently developing technology that is similar to ours. Also third parties may own rights in similar trademarks. Any unauthorized use of our intellectual property by third parties could reduce any competitive advantage we have developed or otherwise harm our business and brands. If we had to litigate to protect these rights, any proceedings could be costly, and we may not prevail. Our intellectual property rights, including our trademarks, may fail to provide us with significant competitive advantages in the U.S. and in foreign jurisdictions that do not have or do not enforce strong intellectual property rights.

We cannot be certain that our intellectual property does not and will not infringe issued intellectual property rights of others. We may be subject to legal proceedings and claims in the ordinary course of our business, including claims of alleged infringement of the patents, trademarks and other intellectual property rights of third parties. Any such claims, whether or not meritorious, could result in costly litigation. Depending on the success of these proceedings, we may be required to enter into licensing or consent agreements (if available on acceptable terms or at all), or to pay damages or cease using certain service marks or trademarks.

 

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We franchise our brands to franchisees. While we try to ensure that the quality of our brands is maintained by all of our franchisees, we cannot assure that these franchisees will not take actions that hurt the value of our intellectual property or our reputation.

Our license agreement with Sotheby’s for the use of the Sotheby’s International Realty ® brand is terminable by Sotheby’s prior to the end of the license term if certain conditions occur, including but not limited to the following: (1) we attempt to assign any of our rights under the license agreement in any manner not permitted under the license agreement, (2) we become bankrupt or insolvent, (3) a court issues a non-appealable, final judgment that we have committed certain breaches of the license agreement and we fail to cure such breaches within 60 days of the issuance of such judgment, or (4) we discontinue the use of all of the trademarks licensed under the license agreement for a period of twelve consecutive months.

Our license agreement with Meredith for the use of the Better Homes and Gardens ® real estate brand is terminable by Meredith prior to the end of the license term if certain conditions occur, including but not limited to the following: (i) we attempt to assign any of our rights under the license agreement in any manner not permitted under the license agreement, (ii) we become bankrupt or insolvent, or (iii) a trial court issues a final judgment that we are in material breach of the license agreement or any representation or warranty we made was false or materially misleading when made.

Our ability to use our NOLs and other tax attributes may be limited if we undergo an “ownership change.”

Our ability to utilize our net operating losses (“NOLs”) and other tax attributes could be limited if we undergo an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). An ownership change is generally defined as a greater than 50 percentage point increase in equity ownership by five-percent stockholders in any three-year period.

Although we do not believe that we have undergone an ownership change within the last three years, it is possible that we will undergo an ownership change in the future and, as a result, our use of NOL carryforwards may be limited.

Risks relating to our separation from Cendant

We are responsible for certain of Cendant’s contingent and other corporate liabilities.

Under the Separation and Distribution Agreement dated July 27, 2006 (the “Separation and Distribution Agreement”) among Realogy, Cendant Corporation (“Cendant”), which changed its name to Avis Budget Group, Inc. (“Avis Budget”) in August 2006, Wyndham Worldwide Corporation (“Wyndham Worldwide”) and Travelport Inc. (“Travelport”), and other agreements, subject to certain exceptions contained in the Tax Sharing Agreement dated as of July 28, 2006, as amended, among Realogy, Wyndham Worldwide and Travelport, Realogy and Wyndham Worldwide have each assumed and are generally responsible for 62.5% and 37.5%, respectively, of certain of Cendant’s contingent and other corporate liabilities not primarily related to the businesses of Travelport, Realogy, Wyndham Worldwide or Avis Budget Group. The due to former parent balance was $104 million at December 31, 2010 and represents Realogy’s accrual of its share of potential Cendant contingent and other corporate liabilities.

If any party responsible for Cendant contingent and other corporate liabilities were to default in its payment, when due, of any such assumed obligations related to any such contingent and other corporate liability, each non-defaulting party (including Cendant) would be required to pay an equal portion of the amounts in default. Accordingly, Realogy may, under certain circumstances, be obligated to pay amounts in excess of its share of the assumed obligations related to such contingent and other corporate liabilities, including associated costs and expenses.

Adverse outcomes from the unresolved Cendant liabilities for which Realogy has assumed partial liability under the Separation and Distribution Agreement could be material with respect to our earnings or cash flows in any given reporting period.

 

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Item 2. Properties.

Corporate headquarters.  Our corporate headquarters is located in leased offices at One Campus Drive in Parsippany, New Jersey. The lease expires in 2013 and can be renewed at our option for an additional five or ten years.

Real estate franchise services.  Our real estate franchise business conducts its main operations at our leased offices at One Campus Drive in Parsippany, New Jersey.

Company owned real estate brokerage services.  As of December 31, 2010, our company owned real estate brokerage segment leases approximately 5.5 million square feet of domestic office space under approximately 1,100 leases. Its corporate headquarters and one regional headquarters are located in leased offices at One Campus Drive, Parsippany, New Jersey. As of December 31, 2010, NRT leased seven facilities serving as regional headquarters, 22 facilities serving as local administration, training facilities or storage, and approximately 750 brokerage sales offices under approximately 931 leases. These offices are generally located in shopping centers and small office parks, generally with lease terms of one to five years. In addition, there are 67 leases representing vacant and/or subleased offices, principally relating to brokerage sales office consolidations.

Relocation services.  Our relocation business has its main corporate operations in a leased building in Danbury, Connecticut with a lease term expiring in 2015. There are also four leased regional offices in the US, located in Lisle, Illinois; Irving, Texas; Omaha, Nebraska and Memphis, Tennessee which provide operation support services. Sales, Account Management and some operational support is provided out of Folsom, California; Irvine, California; and St. Louis Park, Minnesota. International offices include leased facilities in the United Kingdom, Hong Kong, Singapore, China, Germany, France, Switzerland, Canada and The Netherlands.

Title and settlement services.  Our title and settlement services business conducts its main operations at a leased facility in Mount Laurel, New Jersey pursuant to a lease expiring in 2014. This business also has leased regional and branch offices in 25 states and Washington, D.C.

We believe that all of our properties and facilities are well maintained.

 

Item 3. Legal Proceedings.

Legal—Real Estate Business

The following litigation relates to Cendant’s Real Estate business, and pursuant to the Separation and Distribution Agreement, we have agreed to be responsible for all of the related costs and expenses.

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). In 2002, Frank K. Cooper Real Estate #1, Inc. filed the Cooper Litigation against Cendant and Cendant’s subsidiary, Century 21. The complaint alleges breach of certain provisions of the Real Estate Franchise Agreement entered into between Century 21 and the plaintiffs, breach of the implied duty of good faith and fair dealing, violation of the New Jersey Consumer Fraud Act and breach of 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 or otherwise improperly charged expenses to the Century 21 advertising fund. The complaint seeks unspecified compensatory and punitive damages, injunctive relief, interest, attorney’s fees and costs. The New Jersey Consumer Fraud Act provides for treble damages, attorney’s fees and costs as remedies for violation of the Act. On August 17, 2010, the court granted plaintiffs’ renewed motion to certify a class. The certified class includes Century 21 franchisees at any time between August 1, 1995 and April 17, 2002 whose franchise agreements contain New Jersey choice of law and venue provisions and who have not executed releases releasing the claim (unless the release was a provision of a franchise renewal agreement).

 

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A case management order was entered on November 29, 2010 that includes, among other deadlines, a trial date of April 16, 2012. On December 20, 2010, the court held a status conference to address plaintiffs’ motion regarding notice to be issued to the class, the language of the notice, publication of the notice and how class members can opt out of the class. As directed by a court order, Century 21 has delivered to plaintiffs’ counsel and the court lists of the names and contact information for (1) franchisees that meet the class definition and (2) franchisees that would have met the class definition but for the fact that they signed a waiver of claims against Century 21. Pursuant to the court order, a notice of pendency of the action will be mailed to class members on March 4, 2011, and a summary of that notice will be published in various publications within 30 days of that mailing. Plaintiffs’ counsel has advised that it may file a motion requesting that notice be sent to all Century 21 franchisees during the class period, not solely those that meet the class definition. This case remains in its very early stages, with most of the effort in the past six months directed at class identification. Discovery on the merits is in its early stages. This class action involves substantial, complex litigation. Class action litigation is inherently unpredictable and subject to significant uncertainties. The resolution of the Cooper Litigation could result in substantial losses and we cannot assure you that such resolution will not have a material adverse effect on our results of operations, financial condition or liquidity.

Realogy Corporation v. Triomphe Partners and Triomphe Immobilien (AAA/District New York). Realogy initiated binding arbitration proceedings to collect sums due to it, plus attorneys fees and costs, from the former master franchisor of the Coldwell Banker brand for 28 countries in Eastern and Western Europe. Realogy also seeks a declaration that it properly terminated the international franchise contracts because Triomphe failed to properly cure pending defaults. Triomphe has asserted a counterclaim alleging that the contracts were not properly terminated and that the contracts were terminated in violation of the Illinois Franchise Practices Act. Triomphe seeks damages for lost profits, as well as attorneys’ fees and costs. Arbitration proceedings were held in July and November 2009, and in January and March 2010. By decision dated August 4, 2010, the arbitrators found that Realogy properly terminated the franchise contracts for failing to meet minimum office requirements but denied Realogy’s monetary claim. All of the former master franchisor’s counterclaims were denied. All parties are to bear their own attorneys’ fees and costs, and to share equally the costs of the arbitration. On November 5, 2010, Triomphe appealed the arbitrators’ decision. Briefs have been filed by both parties and a ruling on Realogy’s motion to dismiss the appeal is pending.

We are involved in certain other claims and legal actions arising in the ordinary course of our business. While the results of such claims and legal actions cannot be predicted with certainty, we do not believe based on information currently available to us that the final outcome of these proceedings will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

***

The Company also monitors litigation and claims asserted against other industry participants together with new statutory and regulatory enactments for potential impacts to its business. Two key areas that the Company is currently monitoring are RESPA compliance and rules concerning use of customer information with affiliates. Although the Company responds, as appropriate, to these developments, such developments may impose costs or obligations that adversely affect the Company’s business operations or financial results.

Legal—Cendant Corporate Litigation

Pursuant to the Separation and Distribution Agreement dated as of July 27, 2006 among Cendant, Realogy, Wyndham Worldwide and Travelport, each of Realogy, Wyndham Worldwide and Travelport have assumed certain contingent and other corporate liabilities (and related costs and expenses), which are primarily related to each of their respective businesses. In addition, Realogy has assumed 62.5% and Wyndham Worldwide has assumed 37.5% of certain contingent and other corporate liabilities (and related costs and expenses) of Cendant or its subsidiaries, which are not primarily related to any of the respective businesses of Realogy, Wyndham

 

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Worldwide, Travelport and/or Cendant’s vehicle rental operations, in each case incurred or allegedly incurred on or prior to the date of the separation of Travelport from Cendant. Such litigation includes the litigation described below.

CSI Investment et. al. v. Cendant et. al., (Case No. 1:00-CV-01422 (DAB-DFE) (S.D.N.Y.)) is a decade-old legacy Cendant litigation matter not related to real estate (“Credentials Litigation”). In July 2009, the trial court entered a satisfaction of judgment with respect to the entire Credentials Litigation subject to plaintiffs’ right to petition the Court for reasonable attorneys’ fees. 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. In December 2010 the parties settled the attorneys’ fee dispute and Cendant agreed to pay plaintiffs $8 million (62.5% of which was paid by Realogy to satisfy its percentage of the settlement amount). The Court entered a stipulation and order of dismissal of the matter on January 11, 2011.

 

Item 4. Removed and Reserved.

 

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PART II

 

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

There is no established trading market for our common stock. As of March 1, 2011, approximately 98.7% of the common stock of our indirect parent company, Holdings, was held by investment funds affiliated with our principal equity sponsor, Apollo and an investment fund of co-investors managed by Apollo.

Since our acquisition by Apollo, we have paid no cash dividends on our common stock. Our senior secured credit facility and the indentures governing our 12.375% Senior Subordinated Notes, Extended Maturity Notes and our First and a Half Lien Notes contain covenants that limit our ability to pay dividends. See “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Covenants under our Senior Secured Credit Facility and certain Indentures.” In addition, pursuant to the Paulson Securityholders Agreement and prior to the consummation of a Qualified Public Offering (as defined below), we may not pay dividends or any other distributions on our capital stock or redeem or repurchase any shares of capital stock without Paulson’s prior written consent, subject to certain specified exceptions. See “Item 13—Certain Relationships and Related Transactions, and Director Independence—Paulson Securityholders Agreement—Consent Rights.”

 

Item 6. Selected Financial Data.

The following table presents our selected historical consolidated and combined financial data and operating statistics. The consolidated statement of operations data for the periods in the three-year period ended December 31, 2010 and the consolidated balance sheet data as of December 31, 2010 and 2009 have been derived from our audited consolidated financial statements included elsewhere herein. The combined statement of operations data for the years ended December 31, 2007 and 2006 and the balance sheet data as of December 31, 2008, 2007 and 2006 have been derived from our consolidated and combined financial statements not included elsewhere herein.

Although Realogy continued as the same legal entity after the Merger, the consolidated financial statements for 2007 are presented for two periods: January 1 through April 9, 2007 (the “Predecessor Period” or “Predecessor,” as context requires) and April 10 through December 31, 2007 (the “Successor Period” or “Successor,” as context requires), which relate to the period preceding the Merger and the period succeeding the Merger, respectively. The results of the Successor are not comparable to the results of the Predecessor due to the difference in the basis of presentation of purchase accounting as compared to historical cost. The consolidated statement of operations data for the period January 1, 2007 to April 9, 2007 are derived from the audited financial statements of the Predecessor not included elsewhere in this Annual Report, and the consolidated statement of operations data for the period April 10, 2007 to December 31, 2007 are derived from the audited financial statements of the Successor not included elsewhere in this Annual Report. In the opinion of management, the statement of operations data for 2007 include all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations as of the dates and for the periods indicated. The results for periods of less than a full year are not necessarily indicative of the results to be expected for any interim period or for a full year.

The selected historical consolidated and combined financial data and operating statistics presented below should be read in conjunction with our annual consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere herein. Our annual consolidated and combined financial information may not be indicative of our future performance and does not necessarily reflect what our financial position and results of operations would have been prior to August 1, 2006 had we operated as a separate, stand-alone entity during the periods presented, including changes that occurred in our operations and capitalization as a result of the separation and distribution from Cendant.

 

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    Successor           Predecessor  
    As of or For the Year
Ended December 31,
    As of or For
the Period
April 10
Through
December 31,

2007
          Period
From
January 1
Through
April 9,

2007
    As of or For
the Year Ended
December 31,

2006
 
    2010     2009     2008              
    (In millions, except operating statistics)  

Statement of Operations Data:

               

Net revenue

  $ 4,090      $ 3,932      $ 4,725      $ 4,472          $ 1,492      $ 6,483   

Total expenses

    4,084        4,266        6,988        5,708            1,560        5,888   
                                                   

Income (loss) before income taxes, equity in earnings and noncontrolling interests

    6        (334     (2,263     (1,236         (68     595   

Income tax expense (benefit)

    133        (50     (380     (439         (23     237   

Equity in (earnings) losses of unconsolidated entities

    (30     (24     28        (2         (1     (9
                                                   

Net income (loss)

    (97     (260     (1,911     (795         (44     367   

Less: Net income attributable to noncontrolling interests

    (2     (2     (1     (2         —          (2
                                                   

Net income (loss) attributable to Realogy

  $ (99   $ (262   $ (1,912   $ (797       $ (44   $ 365   
                                                   

Balance Sheet Data:

               

Securitization assets (a)

  $ 393      $ 364      $ 845      $ 1,300            $ 1,190   

Total assets

    8,029        8,041        8,912        11,172              6,668   

Securitization obligations

    331        305        703        1,014              893   

Long-term debt

    6,892        6,706        6,760        6,239              1,800   

Equity (deficit) (b)

    (1,072     (981     (740     1,203              2,487   

 

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

Operating Statistics:

          

Real Estate Franchise Services (c)

          

Closed homesale sides (d)

     922,341        983,516        995,622        1,221,206        1,515,542   

Average homesale price (e)

   $ 198,076      $ 190,406      $ 214,271      $ 230,346      $ 231,664   

Average homesale brokerage commission rate (f)

     2.54     2.55     2.52     2.49     2.47

Net effective royalty rate (g)

     5.00     5.10     5.12     5.03     4.87

Royalty per side (h)

   $ 262      $ 257      $ 287      $ 298      $ 286   

Company Owned Real Estate Brokerage
Services (i)

          

Closed homesale sides (d)

     255,287        273,817        275,090        325,719        390,222   

Average homesale price (e)

   $ 435,500      $ 390,688      $ 479,301      $ 534,056      $ 492,669   

Average homesale brokerage commission rate (f)

     2.48     2.51     2.48     2.47     2.48

Gross commission income per side (j)

   $ 11,571      $ 10,519      $ 12,612      $ 13,806      $ 12,691   

Relocation Services

          

Initiations (k)

     148,304        114,684        136,089        132,343        130,764   

Referrals (l)

     69,605        64,995        71,743        78,828        84,893   

Title and Settlement Services

          

Purchasing title and closing units (m)

     94,290        104,689        110,462        138,824        161,031   

Refinance title and closing units (n)

     62,225        69,927        35,893        37,204        40,996   

Average price per closing unit (o)

   $ 1,386      $ 1,317      $ 1,500      $ 1,471      $ 1,405   

 

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(a) Represents the portion of relocation receivables and advances, relocation properties held for sale and other related assets that collateralize our securitization obligations. Refer to Note 8, “Short and Long-Term Debt” in the consolidated financial statements for further information.
(b) For the successor period Equity (deficit) is comprised of the capital contribution of $2,001 million from affiliates of Apollo and co-investors offset by the net loss for the period.
(c) These amounts include only those relating to third-party franchisees and do not include amounts relating to the Company Owned Real Estate Brokerage Services segment.
(d) A closed homesale side represents either the “buy” side or the “sell” side of a homesale transaction.
(e) Represents the average selling price of closed homesale transactions.
(f) Represents the average commission rate earned on either the “buy” side or “sell” side of a homesale transaction.
(g) Represents the average percentage of our franchisees’ commission revenue (excluding NRT) paid to the Real Estate Franchise Services segment as a royalty. The net effective royalty rate does not include the effect of non-standard incentives granted to some franchisees.
(h) Represents net domestic royalties earned from our franchisees (excluding NRT) divided by the total number of our franchisees’ closed homesale sides.
(i) Our real estate brokerage business has a significant concentration of 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. The real estate franchise business has franchised offices that are more widely dispersed across the United States than our real estate brokerage operations. Accordingly, operating results and homesale statistics may differ between our brokerage and franchise businesses based upon geographic presence and the corresponding homesale activity in each geographic region.
(j) Represents gross commission income divided by closed homesale sides.
(k) Represents the total number of transferees served by the relocation services business. The amounts presented for the year ended December 31, 2010 include 26,087 initiations as a result of the acquisition of Primacy in January 2010.
(l) Represents the number of referrals from which we earned revenue from real estate brokers. The amounts presented for the year ended December 31, 2010 include 4,997 referrals as a result of the acquisition of Primacy in January 2010.
(m) Represents the number of title and closing units processed as a result of a home purchases. The amounts presented for the year ended December 31, 2006 include 31,018 purchase units as a result of the acquisition of Texas American Title Company on January 6, 2006.
(n) Represents the number of title and closing units processed as a result of homeowners refinancing their home loans. The amounts presented for the year ended December 31, 2006 include 1,255 refinance units as a result of the acquisition of Texas American Title Company.
(o) Represents the average fee we earn on purchase title and refinancing title units.

In presenting the financial data above in conformity with general accepted accounting principles, we are required to make estimates and assumptions that affect the amounts reported. See “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” for a detailed discussion of the accounting policies that we believe require subjective and complex judgments that could potentially affect reported results.

 

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis presents a review of Realogy and its subsidiaries. This discussion should be read in conjunction with our consolidated financial statements and accompanying notes thereto included elsewhere herein. 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 “Special Note Regarding Forward-Looking Statements” and “Item 1A—Risk Factors” 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.

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. We launched the Better Homes and Gardens ® Real Estate brand in July 2008. As of December 31, 2010, our franchise system had approximately 14,700 franchised and company owned offices and 264,000 independent sales associates operating under our brands in the U.S. and 99 other countries and territories around the world, which included approximately 750 of our company owned and operated brokerage offices with approximately 44,000 independent sales associates. We franchise our real estate brokerage franchise systems to real estate brokerage businesses that are independently owned and operated. We provide operational and administrative services, tools and systems to franchisees, which are designed to assist franchisees in achieving increased revenue and profitability. Such services include national and local advertising programs, listing and agent-recruitment tools, including technology, training and purchasing discounts through our preferred vendor programs. Franchise revenue principally consists of royalty and marketing fees from our franchisees. The royalty received is primarily based on a percentage of the franchisee’s commissions and/or gross commission income. Royalty fees are accrued as the underlying franchisee revenue is earned (upon closing of the homesale transaction). Annual volume incentives given to certain franchisees on royalty fees are recorded as a reduction to revenue and are accrued for in relative proportion to the recognition of the underlying gross franchise revenue. Franchise revenue also includes initial franchise fees, which are generally non-refundable and are recognized by us as revenue when all material services or conditions relating to the sale have been substantially performed (generally when a franchised unit opens for business). Royalty increases or decreases are recognized with little corresponding increase or decrease in expenses due to the significant operating efficiency within the franchise operations. In addition to royalties received from our independently owned franchisees, our Company Owned Real Estate Brokerage Services segment pays royalties to the Real Estate Franchise Services segment.

 

   

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. As an owner-operator of real estate brokerages, we assist home buyers and sellers in listing, marketing, selling and finding homes. We earn commissions for these services, which are recorded upon the closing of a real estate transaction (i.e., purchase or sale of a home), which we refer to as gross commission income. We then pay commissions to real estate agents, which are recognized concurrently with associated revenues. We also operate a large independent residential REO asset manager. These REO operations facilitate the maintenance and sale of foreclosed homes on behalf of lenders. The profitability of the REO business is countercyclical to the overall state of the housing market and was a meaningful contributor to the 2010, 2009 and 2008 financial results of the Company Owned Real Estate Brokerage segment.

 

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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. We provide relocation services to corporate and government clients for the transfer of their employees. Such services include the purchasing and/or selling of a transferee’s home, providing home equity advances to transferees (generally guaranteed by the client), expense processing, arranging household goods moving services, home-finding and other related services. We earn revenues from fees charged to clients for the performance and/or facilitation of these services and recognize such revenue as services are provided. In the majority of relocation transactions, the gain or loss on the sale of a transferee’s home is generally borne by the client. For all homesale transactions, the value paid to the transferee is either the value per the underlying third party buyer contract with the transferee, which results in no gain or loss to us, or the appraised value as determined by independent appraisers. We generally earn interest income on the funds we advance on behalf of the transferring employee, which is typically based on prime rate or LIBOR rate and recorded within other revenue (as is the corresponding interest expense on the securitization borrowings) in the Consolidated Statement of Operations as earned until the point of repayment by the client. Additionally, we earn revenue from real estate brokers and other third-party service providers. We recognize such fees from real estate brokers at the time the underlying property closes. For services where we pay a third-party provider on behalf of our clients, we generally earn a referral fee or commission, which is recognized at the time of completion of 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 provide title and closing services, which include title search procedures for title insurance policies, homesale escrow and other closing services. Title revenues, which are recorded net of amounts remitted to third party insurance underwriters, and title and closing service fees are recorded at the time a homesale transaction or refinancing closes. We provide many of these services to third party clients in connection with transactions generated by our Company Owned Real Estate Brokerage and Relocation Services segments as well as various financial institutions in the mortgage lending industry. We also serve as an underwriter of title insurance policies in connection with residential and commercial real estate transactions.

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.

July 2006 Separation from Cendant

Realogy was incorporated on January 27, 2006 to facilitate a plan by Cendant to separate into four independent companies—one for each of Cendant’s real estate services, travel distribution services (“Travelport”), hospitality services (including timeshare resorts) (“Wyndham Worldwide”) and vehicle rental businesses (“Avis Budget Group”). Prior to July 31, 2006, the assets of the real estate services businesses of Cendant were transferred to Realogy and, on July 31, 2006, Cendant distributed all of the shares of our common stock held by it to the holders of Cendant common stock issued and outstanding on the record date for the distribution, which was July 21, 2006 (the “Separation”). The Separation was effective on July 31, 2006.

Before our Separation from Cendant, we entered into a Separation and Distribution Agreement, a Tax Sharing Agreement and several other agreements with Cendant and Cendant’s other businesses to effect the separation and distribution and provide a framework for our relationships with Cendant and Cendant’s other businesses after the separation. These agreements govern the relationships among us, Cendant, Wyndham

 

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Worldwide and Travelport subsequent to the completion of the separation plan and provide for the allocation among us, Cendant, Wyndham Worldwide and Travelport of Cendant’s assets, liabilities and obligations attributable to periods prior to our separation from Cendant.

April 2007 Merger Agreement with Affiliates of Apollo

On December 15, 2006, we entered into an agreement and plan of merger with Holdings and Domus Acquisition Corp. which are affiliates of Apollo Management VI, L.P., an entity affiliated with Apollo Management, L.P. Under the merger agreement, Holdings would acquire the outstanding shares of Realogy pursuant to the merger of Domus Acquisition Corp. with and into Realogy, with Realogy being the surviving entity (the “Merger”). The Merger was consummated on April 10, 2007. All of Realogy’s issued and outstanding common stock is currently owned by a direct wholly-owned subsidiary of Holdings, Domus Intermediate Holdings Corp. (“Intermediate”).

The Company incurred substantial indebtedness in connection with the transaction, the aggregate proceeds of which were sufficient to pay the aggregate merger consideration, repay a portion of the Company’s then outstanding indebtedness and pay fees and expenses related to the Merger. Specifically, the Company entered into a senior secured credit facility, issued unsecured notes and refinanced the credit facilities governing the Company’s relocation securitization programs (the Merger together with entering into the foregoing financing transactions, collectively, the “Merger Transactions”). See “—Liquidity and Capital Resources” for additional information on the Merger Transactions. In addition, investment funds affiliated with, or co-investment vehicles managed by, Apollo Management VI, L.P. or one of its affiliates (collectively referred to as “Apollo”), as well as members of the Company’s management who purchased Holdings common stock with cash or through rollover equity, contributed $2,001 million to the Company to complete the Merger Transactions, which was treated as a contribution to our equity.

Refinancing Transactions

During the past several months, the Company has completed a series of transactions, referred to herein as the Refinancing Transactions, to refinance both its secured and unsecured indebtedness. The Refinancing Transactions, among other things, have:

 

   

extended the maturities on more than 90% of the Company’s Existing Notes by at least three years;

 

   

provided a mechanism for a potential deleveraging of the Company’s debt through the issuance of $2.1 billion aggregate principal amount of Convertible Notes that mature in 2018 and that are convertible at any time, at the holder’s option, into common stock of our indirect parent company;

 

   

extended the maturities of a significant portion of its first lien senior secured indebtedness from 2013 to 2016 (including 79% of its $3.1 billion term loan facility);

 

   

replaced $700 million of its first lien secured debt with secured indebtedness due in 2019 that is not included in the numerator of its senior secured leverage ratio, thereby significantly improving the Company’s operating cushion under such ratio and mitigating concerns regarding the Company maintaining compliance with such ratio for at least the next twelve months;

 

   

maintained access to $650 million of borrowing under its senior secured revolving credit facilities; and

 

   

we estimate that our annual cash interest will increase by approximately $55 million assuming current LIBOR rates and outstanding indebtedness after giving effect to the Refinancing Transactions.

Debt Exchange Offering

On January 5, 2011, the Company completed private exchange offers relating to its outstanding 10.50% Senior Notes, Senior Toggle Notes and 12.375% Senior Subordinated Notes. Approximately $2,110 million

 

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aggregate principal amount of Existing Notes were tendered for Convertible Notes, which are convertible at the holder’s option into Class A Common Stock of Holdings and approximately $632 million aggregate principal amount of Existing Notes were tendered for Extended Maturity Notes.

On January 5, 2011, we issued:

 

   

$492 million aggregate principal amount of 11.50% Senior Notes and $1,144 million aggregate principal amount of 11.00% Series A Convertible Notes in exchange for $1,636 million aggregate principal amount of outstanding 10.50% Senior Notes;

 

   

$130 million aggregate principal amount of 12.00% Senior Notes and $291 million aggregate principal amount of 11.00% Series B Convertible Notes in exchange for $421 million aggregate principal amount of outstanding Senior Toggle Notes; and

 

   

$10 million aggregate principal amount of 13.375% Senior Subordinated Notes and $675 million aggregate principal amount of 11.00% Series C Convertible Notes in exchange for $685 million aggregate principal amount of outstanding 12.375% Senior Subordinated Notes.

In addition, upon receipt of the requisite consents from the holders of the 10.50% Senior Notes and Senior Toggle Notes, we amended the respective indentures governing the terms of such notes to remove substantially all of the restrictive covenants and certain other provisions previously contained in those indentures.

As a result of the Debt Exchange Offering, we extended the maturity of approximately $2,742 million aggregate principal amount of our existing Unsecured Notes to 2017 and 2018, leaving approximately $303 million aggregate principal amount of Existing Notes that mature in 2014 and 2015. In addition, pursuant to the terms of the indenture governing the Convertible Notes, the Convertible Notes are redeemable at our option at a price equal to 90% of the principal amount thereof, plus accrued and unpaid interest to the date of redemption upon a Qualified Public Offering as such term is defined in the indenture.

The Company and Holdings have agreed to: (1) file a registration statement with the Securities and Exchange Commission (“SEC”), with respect to a registered offer to exchange each series of the Extended Maturity Notes for new registered notes having terms substantially identical in all material respects to the Extended Maturity Notes of the applicable series (except that the new registered notes will not contain terms with respect to additional interest or transfer restrictions) or (2) file a shelf registration statement with respect to resales of the Extended Maturity Notes.

The Company and Holdings have also agreed to file a shelf registration statement with respect to resales of the outstanding Convertible Notes and the Class A Common Stock issuable upon conversion of the Convertible Notes.

Amendment to Senior Secured Credit Facility

Effective February 3, 2011, the Company entered into the Senior Secured Credit Facility Amendment and an incremental assumption agreement, which resulted in the following:

 

   

certain lenders extended the maturity of a significant portion of first lien term loans, revolving commitments and synthetic letter of credit commitments to October 10, 2016, April 10, 2016, and October 10, 2016, respectively, which extensions resulted in approximately $2,424 million aggregate principal amount of extended term loans, approximately $461 million aggregate principal amount of commitments in respect of extended revolving loans and approximately $171 million aggregate principal amount of extended synthetic letter of credit commitments;

 

   

certain lenders simultaneously converted approximately $98 million aggregate principal amount of commitments in respect of extended revolving loans to extended term loans, thereby reducing the commitments under our revolving credit facility to $652 million;

 

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the net proceeds of the $700 million aggregate principal amount of First and a Half Lien Notes, together with cash on hand, were used to prepay $700 million of the outstanding extended term loans, thereby reducing the aggregate principal amount of extended term loans to $1,822 million;

 

   

the interest rate with respect to the extended term loans was increased by 1.25% from the rate applicable to the non-extended term loans;

 

   

the interest rate with respect to the extended revolving loans was increased by 1.0% from the rate applicable to the non-extended revolving loans; and

 

   

the fee with respect to the synthetic letter of credit facility was increased by 1.25% from the fee applicable to the non-extended synthetic letter of credit facility.

The Senior Secured Credit Facility Amendment also provides for the following:

 

   

allows for one or more future issuances of additional senior secured notes or unsecured notes or loans to prepay the Company’s first lien term loans, to be secured on either a pari passu basis with, or junior to, its first lien obligations under the senior secured credit facility;

 

   

allows for one or more future issuances of additional senior secured or unsecured notes or loans to prepay the Company’s second lien loans, to be secured on a pari passu basis with, or junior to, its second lien loans under the senior secured credit facility;

 

   

allows for the incurrence of additional incremental term loans that are secured on a junior basis to the second lien loans in an aggregate amount not to exceed $350 million; and

 

   

provides that debt financing secured by a lien that is junior in priority to the first lien obligations under the senior secured credit facility (including, but not limited, to the First and a Half Lien Notes) will not, subject to certain exceptions, constitute senior secured debt for purposes of calculating the senior secured leverage ratio under the senior secured credit facility.

The extended term loans do not require any scheduled amortization of principal. The non-extended term loan facility will continue to provide for quarterly amortization payments totaling 1% per annum of the principal amount of the non-extended first lien term loans.

Issuance of First and a Half Lien Notes

On February 3, 2011, we issued $700 million aggregate principal amount of First and a Half Lien Notes in a private offering exempt from the registration requirements of the Securities Act. The First and a Half Lien Notes are secured by substantially the same collateral as the Company’s existing secured obligations under its senior secured credit facility, but the priority of the collateral liens securing the First and a Half Lien Notes is (i) junior to the collateral liens securing the Company’s first lien obligations under its senior secured credit facility and (ii) senior to the collateral liens securing the Company’s second lien obligations under its senior secured credit facility.

As discussed above, the net proceeds from the offering of the First and a Half Lien Notes, along with cash on hand, were used to prepay $700 million of certain of its first lien term loans that were extended in connection with the Senior Secured Credit Facility Amendment.

As used in this Annual Report, the term “Refinancing Transactions” refers to, collectively, (1) the Debt Exchange Offering, (2) the Senior Secured Credit Facility Amendment, and (3) the issuance of First and a Half Lien Notes. After giving effect to the Refinancing Transactions, we estimate that our annual cash interest will increase by approximately $55 million assuming current LIBOR rates and outstanding indebtedness. For more

 

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information related to the Refinancing Transactions, see “Note 20— Subsequent Events” to the consolidated financial statements as well as the debt table below which gives effect to the Refinancing Transactions as if they occurred on December 31, 2010.

 

    

Expiration Date

   Total
Capacity
     Outstanding
Borrowings
     Available
Capacity
 

Senior Secured Credit Facility:

           

Non-extended revolving credit facility (1)

   April 2013    $ 289       $ —         $ 210   

Extended revolving credit facility (1)

   April 2016      363         —           263   

Non-extended term loan facility

   October 2013      635         635         —     

Extended term loan facility

   October 2016      1,822         1,822         —     

First and a Half Lien Notes

   February 2019      700         700         —     

Second Lien Loans

   October 2017      650         650         —     

Other bank indebtedness (2)

   Various      163         163         —     

Existing Notes

           

10.50% Senior Notes

   April 2014      64         64         —     

11.00%/11.75% Senior Toggle Notes

   April 2014      49         49         —     

12.375% Senior Subordinated Notes (3)

   April 2015      190         187         —     

Extended Maturity Notes

           

11.50% Senior Notes (4)

   April 2017      492         488         —     

12.00% Senior Notes (5)

   April 2017      130         129         —     

13.375% Senior Subordinated Notes

   April 2018      10         10         —     

11.00% Convertible Notes

   April 2018      2,110         2,110         —     

Securitization obligations: (6)

           

Apple Ridge Funding LLC

   April 2012      500         296         204   

Cartus Financing Limited (7)

   Various      62         35         27   
                             
      $ 8,229       $ 7,338       $ 704   
                             

 

(1) As of December 31, 2010, there were no outstanding borrowings under the revolving credit facility. The available capacity under this facility was reduced by $79 million and $100 million of outstanding letters of credit on the non-extended and the extended revolving credit facility, respectively, at December 31, 2010. On March 1, 2011, the Company had $60 million outstanding on the revolving credit facility.
(2) Consists of revolving credit facilities that are supported by letters of credit issued under the senior secured credit facility, $5 million is due in April 2011, $50 million is due in June 2011, $50 million due November 2011, $50 million is due in January 2013 and $8 million due in May 2015. In February 2011, the Company repaid $55 million of outstanding borrowings under these revolving credit facilities that were due in April and June 2011.
(3) Consists of $190 million of 12.375% Senior Subordinated Notes due 2015, less a discount of $3 million.
(4) Consists of $492 million of 11.50% Senior Notes due 2017, less a discount of $4 million.
(5) Consists of $130 million of 12.00% Senior Notes due 2017, less a discount of $1 million.
(6) Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations.
(7) Consists of a £35 million facility which expires in August 2015 and a £5 million working capital facility which expires in August 2011.

Impairment of Goodwill and Intangible Assets

2010 and 2009

During the fourth quarter, the Company performed its annual impairment analysis of goodwill and unamortized intangible assets. This analysis resulted in no impairment charges for 2010 and 2009.

 

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2008

The impairment analysis performed in the fourth quarter of 2008 resulted in an impairment charge for 2008 of $1,739 million ($1,523 million, net of income tax benefit). The impairment charge reduced intangible assets by $384 million and reduced goodwill by $1,355 million. The impairment charge impacted the Real Estate Franchise Services segment by $953 million, the Company Owned Real Estate Brokerage services segment by $162 million, the Relocation Services segment by $335 million and the Title and Settlement Services segment by $289 million. In addition, in 2008, the Company recorded impairment charges of $50 million related to investments in unconsolidated entities.

Current 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 over the past 37 years, it has been in a significant and prolonged downturn, which initially began in the second half of 2005. Prior to 2005, home prices and the number of homesale transactions rose rapidly in the first half of the decade due to a combination of factors, including (1) increased owner-occupant demand for larger and more expensive homes made possible by unusually favorable financing terms for both prime and sub-prime borrowers, (2) low interest rates, (3) record appreciation in housing prices driven partially by investment speculation, (4) the growth of the mortgage-backed securities market as an alternative source of capital to the mortgage market, and (5) high credit ratings for mortgage backed securities despite increasing inclusion of subprime loans made to buyers relying upon continuing home price appreciation rather than more traditional underwriting standards.

As housing prices rose even higher, the number of U.S. homesale transactions first slowed, then began decreasing in 2006. This declining trend continued from 2006 through the first half of 2009. In certain locations, the number of homesale transactions fell far more dramatically than for the country as a whole—the hardest hit areas were those areas that had experienced the greatest speculation and/or year over year price appreciation. The overall slowdown in transaction activity caused a buildup of inventories of housing, particularly at the high end of the market, and an increase in short sale and foreclosure activity. These factors combined with the contraction in the mortgage financing market have contributed to heightened buyer caution regarding timing and pricing. The result has been downward pressure on home prices from 2007 through the present period.

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 negative or 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 2010, the number of annual U.S. existing homesale units has declined by 31% and the median price has declined by 21%.

In response to the housing downturn, the U.S. government implemented certain actions during the past several years to assist in a stabilization and/or a recovery of the residential real estate market. These measures have included: (1) the placement of Fannie Mae and Freddie Mac in conservatorship in September 2008 and the funding of over $130 billion to these entities to backstop shortfalls in their capital requirements; (2) the establishment, and subsequent expansion and extension, of a federal homebuyer tax credit for qualified buyers (that, as extended, required signed contracts on or before April 30, 2010); (3) as part of a broader plan to bring stability to credit markets and stimulate the housing market, the purchase of mortgage-backed securities by the Federal Reserve in an attempt to maintain low mortgage rates (the first phase of which ended on March 31, 2010); (4) the continuation of the 2008 higher loan limits for FHA, Freddie Mac and Fannie Mae loans through September 30, 2011; and (5) the availability of low-cost refinancing through Fannie Mae and Freddie Mac to certain homeowners negatively impacted by falling home prices, encouraging lenders, through government financial incentives, to modify loan terms with borrowers at risk of foreclosure or already in foreclosure.

 

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The residential real estate market benefitted from the federal homebuyer tax credit, which was included in the American Recovery and Reinvestment Act of 2009 (enacted in February 2009). The Act made available a tax credit equal to 10% of the home’s purchase price up to a maximum of $8,000 to qualified first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The homebuyer tax credit was extended and modified under The Worker, Homeownership and Business Assistance Act of 2009 (enacted in November 2009). The homebuyer tax credit available to qualified first-time home buyers was extended and the tax credit was expanded to provide a tax credit equal to 10% of the home’s purchase price, up to a maximum of $6,500, for qualified move-up buyers. The program ended for homes under contract by April 30, 2010 and closed no later than September 30, 2010.

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. After June 30, 2010, we saw 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 relatively low levels of consumer confidence. These factors adversely impacted our results in both the third and fourth quarters of 2010.

Interest rates continue to be at low levels by historical standards, 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 an annual average of 4.7% in 2010. Offsetting some of the favorable impact of lower interest rates are conservative mortgage underwriting standards, increased down payment requirements and limited or negative equity in homes in certain markets.

According to NAR, the inventory of existing homes for sale is 3.6 million homes at December 2010 compared to 3.3 million homes at December 2009. The December 2010 inventory level represents a seasonally adjusted 8.2 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 come under investigations for alleged improper support for foreclosure actions. As a result, the foreclosure process in many areas has slowed and may face ongoing disruption. 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.

Recent Legislative and Regulatory Matters

Dodd-Frank Act. On July 21, 2010, the Dodd-Frank Act was signed into law for the express purpose of regulating the financial services industry. The Dodd-Frank Act establishes an independent federal bureau of consumer financial protection to enforce laws involving consumer financial products and services, including mortgage finance. The bureau is empowered with examination and enforcement authority. The Dodd-Frank Act also establishes new standards and practices for mortgage originators, including determining a prospective borrower’s ability to repay their mortgage, removing incentives for higher cost mortgages, prohibiting prepayment penalties for non-qualified mortgages, prohibiting mandatory arbitration clauses, requiring additional disclosures to potential borrowers and restricting the fees that mortgage originators may collect. While we are continuing to evaluate all aspects of the Dodd-Frank Act, such legislation and regulations promulgated pursuant to such legislation as well as other legislation that may be enacted to reform the U.S. housing finance market

 

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could materially and adversely affect the mortgage and housing industries, result in heightened federal regulation and oversight of the mortgage and housing industries, increase mortgage costs and result in increased costs and potential litigation for housing market participants.

Certain provisions of the Dodd-Frank Act may impact the operation and practices of Fannie Mae, Freddie Mac and other government sponsored entities, or GSEs, and require sponsors of securitizations to retain a portion of the economic interest in the credit risk associated with the assets securitized by them. Federal regulators have been authorized to provide exceptions to the risk retention requirements for certain “qualified mortgages” and mortgages meeting certain underwriting standards prescribed in such regulations, however, it is unclear what types of mortgage loans will be encompassed by future regulations related to the definition of “qualified mortgages.” If mortgage loans originated for purchasers of homes are sold into GSE-sponsored mortgage-backed securities that do not meet the definition of a “qualified mortgage,” then the GSEs may be required to retain a portion of the risk of assets they securitize, which may in turn substantially reduce or eliminate the GSEs’ ability to issue mortgage-backed securities. Substantial reduction in, or the elimination of, GSE demand for mortgage loans could have a material adverse effect on the mortgage industry and the housing industry in general. It is also unclear what effect future laws or regulations may have on the ability of the GSEs to issue mortgage-backed securities.

Potential Reform of U.S. Housing Finance Market and Potential Wind-down of Freddie Mac and Fannie Mae. Congress has recently held hearings on the future of Freddie Mac and Fannie Mae and other government sponsored entities or GSEs with a view towards further legislative reform. On February 11, 2011, the Obama Administration issued a report to the U.S. Congress outlining proposals to reform the U.S. housing finance market, including, among other things, reform designed to reduce government support for housing finance and the winding down of Freddie Mac and Fannie Mae over a period of years. Two significant questions that need to be addressed in any such reform are: (1) will banks and other private sources of capital be able to fill homebuyers’ needs as the government seeks to pull back some of the housing mortgage market support and (2) will these other sources of capital be available at rates which are reasonably attractive to potential homebuyers. Legislation, if enacted, which curtails Freddie Mac and/or Fannie Mae’s activities and/or results in the wind down of these entities could increase mortgage costs and could result in more stringent underwriting guidelines imposed by lenders, either of which could materially adverse affect the housing market in general and our operations in particular. Given the current uncertainty with respect to the extent, if any, of such reform, it is difficult to predict either the long-term or short-term impact of government action that may be taken.

***

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. While the housing market in 2010 showed signs of stabilization, 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 as well as reduced availability of mortgage financing;

 

   

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

 

   

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;

 

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

 

   

legislative or regulatory reform, including but not limited to reform that materially adversely impacts the financing of the U.S. housing market.

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. During the second half of 2009, the homebuyer tax credit 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. Homesale transactions in the fourth quarter of 2010 continued 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 vs. 2009  
     First
Quarter
    Second
Quarter
    Third
Quarter
    Fourth
Quarter
 

Number of Homesales

        

Industry

        

NAR (a)

     12     17     (21 %)      (20 %) 

Fannie Mae (a)

     11     17     (21 %)      (20 %) 

Realogy

        

Real Estate Franchise Services

     8     11     (19 %)      (20 %) 

Company Owned Real Estate Brokerage Services

     11     16     (25 %)      (20 %) 

 

(a) Existing homesale data is as of the most recent NAR and Fannie Mae press release.

The annual year over year trend in homesale transactions is as follows:

 

       2010 vs. 2009     2009 vs. 2008     2008 vs. 2007  

Number of Homesales

      

Industry

      

NAR

     (5 %) (a)      5     (13 %) 

Fannie Mae

     (5 %) (a)      5     (13 %) 

Realogy

      

Real Estate Franchise Services

     (6 %)      (1 %)      ( 18 %) 

Company Owned Real Estate Brokerage Services

     (7 %)          (16 %) 

 

(a)

Existing homesale data is as of the most recent NAR and Fannie Mae press release.

 

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Existing homesale transactions were reported by NAR to be down 5% in 2010, or approximately 4.9 million homes for 2010 compared to 5.2 million homes in 2009 and 4.9 million homes in 2008. Results for the Company were consistent with NAR’s reported industry trend as our homesale activity improved in the first and second quarters and then declined in the third and fourth quarters of 2010.

As of their most recent releases, NAR is forecasting an 8% increase in existing homesale transactions for 2011 compared to 2010, and a 5% increase in existing homesale transactions for 2012 compared to 2011. Fannie Mae is forecasting a 6% increase in existing homesale transactions for 2011 compared to 2010 and a 7% increase in existing homesale transactions for 2012 compared to 2011.

The table below shows NAR and Fannie Mae’s forecast of homesale transactions for the four quarters of 2011 compared to 2010. As shown in the quarterly trend noted below, the first and second quarters of 2011 are expected to reflect year over year declines, while the third and fourth quarters of 2011 are expected to show significant year over year improvements. This anomaly is the result of the expiration of the homebuyer tax credit in mid 2010, which resulted in an unusual pattern of homesale activity throughout 2010. Homesale activity was pulled forward into the first half of 2010. This unusual pattern of activity in 2010 creates atypical year over year comparisons in 2011 when we expect homesale transactions to return to a more normal seasonal pattern.

 

     2011 vs. 2010  
     First
Quarter
    Second
Quarter
    Third
Quarter
    Fourth
Quarter
 

Number of Homesales

        

NAR (a)

         (6 %)      28     15

Fannie Mae (a)

     (1 %)      (7 %)      26     11

 

(a) Existing homesale data is as of the most recent NAR and Fannie Mae press release.

The table below shows NAR’s estimate of seasonally adjusted annualized existing homesale transactions for the months of June 2010 through January 2011. As noted below, seasonally adjusted annualized existing homesale transactions dropped 26% 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 seasonally adjusted annualized existing homesale transactions increased an average of 5.7% per month from July 2010 (after the expiration of the tax credit) to January 2011.

 

     Seasonally Adjusted
Annualized Unit
Homesales
     Sequential
Month over Month
Change
 

June 2010

     5,230,000         (8 %) 

July 2010

     3,860,000         (26 %) 

August 2010

     4,240,000         10

September 2010

     4,410,000         4

October 2010

     4,380,000         (1 %) 

November 2010

     4,640,000         6

December 2010

     5,220,000         13

January 2011

     5,360,000         3

Homesale Price

Based upon information published by NAR, the national median price of existing homes sold increased from 2001 to 2005 at a compound annual growth rate, or CAGR, of 7.3% compared to a CAGR of 3.0% from 1972 to 2000. According to NAR, the rate of increase slowed significantly in 2006 and declined in 2007, 2008 and 2009. In 2009 the decrease in average homesale price for the Company Owned Real Estate Brokerage

 

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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 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 in our company owned offices compared to the prior year comparable quarters.

 

     2010 vs. 2009  
     First
Quarter
    Second
Quarter
    Third
Quarter
    Fourth
Quarter
 

Price of Homes

        

Industry

        

NAR (a)

     (1 %)      1     (1 %)      (1 %) 

Fannie Mae (a)

     (1 %)      1     (1 %)      (1 %) 

Realogy

        

Real Estate Franchise Services

     3     5     4     5

Company Owned Real Estate Brokerage Services

     17     12     12     9

 

(a) Existing homesale price data is for median price and is as of the most recent NAR and Fannie Mae press release.

The annual year over year trend in the price of homes is as follows:

 

     2010 vs. 2009     2009 vs. 2008     2008 vs. 2007  

Price of Homes

      

Industry

      

NAR

     % (a)      (13 %)      (10 %) 

Fannie Mae

     % (a)      (13 %)      (10 %) 

Realogy

      

Real Estate Franchise Services

     4     (11 %)      (7 %) 

Company Owned Real Estate Brokerage Services

     11     (18 %)      (10 %) 

 

(a) Existing homesale price data is for median price and is as of the most recent NAR and Fannie Mae press release.

With respect to homesale prices, NAR’s most recent release is forecasting median homesale prices for 2011 compared to 2010 to remain flat and a 3% increase for 2012 compared to 2011. However, Fannie Mae’s most recent forecast shows a 2% decrease in median homesale price for 2011 compared to 2010 followed by a 1% increase for 2012 compared to 2011.

***

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 use data based on actual reported 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. Additionally, NAR data is subject to periodic review and revision. NAR has recently issued a press release disclosing that it is engaged in a review of its sampling and methodology processes with respect to existing homesale data to ensure accuracy.

 

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NAR expects to conclude this analysis and publish any revisions in the summer of 2011. Any such changes could result in downward revisions of NAR’s historical survey data but would have no impact on our reported financial results or driver information. While we believe that the industry data presented herein are derived from the most widely recognized sources for reporting U.S. residential housing market statistical data, we do not endorse or suggest reliance on this data alone but provide the data as a benchmark for the industry. We also note that forecasts are inherently uncertain or speculative in nature and actual results for any period may materially differ. Please see “Market and Industry Data and Forecasts” for a further discussion of the industry data and forecasts used in this Annual Report.

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 20 percent down payment. The housing affordability index improved to 175 for 2010 compared to 169 for 2009 and 138 for 2008. This housing affordability improvement 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 in prior 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 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

 

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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: (i) reducing the royalties we receive from our franchisees and company owned brokerages, (ii) reducing the commissions our company owned brokerage operations earn, (iii) reducing the demand for our title and settlement services, and (iv) 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 years ended December 31, 2010, 2009 and 2008. See “Results of Operations” below for a discussion as to how the material drivers affected our business for the periods presented.

 

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

Real Estate Franchise Services (a)

            

Closed homesale sides

     922,341        983,516        (6 %)      983,516        995,622        (1 %) 

Average homesale price

   $ 198,076      $ 190,406        4   $ 190,406      $ 214,271        (11 %) 

Average homesale broker commission rate

     2.54     2.55     (1 bps     2.55     2.52     3 bps   

Net effective royalty rate

     5.00     5.10     (10bps     5.10     5.12         (2 bps

Royalty per side

   $ 262      $ 257        2   $ 257      $ 287        (10 %) 

Company Owned Real Estate Brokerage Services

            

Closed homesale sides

     255,287        273,817        (7 %)      273,817        275,090       

Average homesale price

   $ 435,500      $ 390,688        11   $ 390,688      $ 479,301        (18 %) 

Average homesale broker commission rate

     2.48     2.51     (3 bps     2.51     2.48     3 bps   

Gross commission income per side

   $ 11,571      $ 10,519        10   $ 10,519      $ 12,612        (17 %) 

Relocation Services

            

Initiations (b)

     148,304        114,684        29     114,684        136,089        (16 %) 

Referrals (c)

     69,605        64,995        7     64,995        71,743        (9 %) 

Title and Settlement Services

            

Purchase title and closing units

     94,290        104,689        (10 %)      104,689        110,462        (5 %) 

Refinance title and closing units

     62,225        69,927        (11 %)      69,927        35,893        95

Average price per closing unit

   $ 1,386      $ 1,317        5   $ 1,317      $ 1,500        (12 %) 

 

(a) Includes all franchisees except for our Company Owned Real Estate Brokerage Services segment.
(b) Includes initiations of 26,087 for the year ended December 31, 2010, related to the Primacy acquisition in 2010.
(c) Includes referrals of 4,997 for the year ended December 31, 2010, related to the Primacy acquisition in 2010.

 

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The following table represents the impact of our revenue drivers on our business operations.

LOGO

The following table sets forth the impact on segment EBITDA for the year ended December 31, 2010 assuming actual homesale sides and average selling price of closed homesale transactions, with all else being equal, increased or decreased by 1%, 3% and 5%.

 

     Homesale
Sides/Average
Price (1)
     Decline of     Increase of  
      5%     3%     1%     1%      3%      5%  
     (units and price
in thousands)
     ($in millions)  

Homesale sides change impact on:

                 

Real Estate Franchise Services (2)

     922 sides       ($ 12   ($ 7   ($ 2   $ 2       $ 7       $ 12   

Company Owned Real Estate Brokerage Services (3)

     255 sides       ($ 45   ($ 27   ($ 9   $ 9       $ 27       $ 45   

Homesale average price change impact on:

                 

Real Estate Franchise Services (2)

   $ 198       ($ 12   ($ 7   ($ 2   $ 2       $ 7       $ 12   

Company Owned Real Estate Brokerage Services (3)

   $ 436       ($ 45   ($ 27   ($ 9   $ 9       $ 27       $ 45   

 

(1) Average price represents the average selling price of closed homesale transactions.
(2) Increase/(decrease) relates to impact on non-company owned real estate brokerage operations only.
(3) Increase/(decrease) represents impact on company owned real estate brokerage operations and related intercompany royalties to our real estate franchise services operations.

Results of Operations

Discussed below are our 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

 

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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. EBITDA 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 on our Consolidated Statements of Operations. Our presentation of EBITDA may not be comparable to similarly-titled measures used by other companies.

Year Ended December 31, 2010 vs. Year Ended December 31, 2009

Our consolidated results comprised the following:

 

     Year Ended December 31,  
     2010     2009     Change  

Net revenues

   $ 4,090      $ 3,932      $ 158   

Total expenses (1)

     4,084        4,266        (182
                        

Income (loss) before income taxes, equity in earnings
and noncontrolling interests

     6        (334     340   

Income tax expense (benefit)

     133        (50     183   

Equity in earnings of unconsolidated entities

     (30     (24     (6
                        

Net loss

     (97     (260     163   

Less: Net income attributable to noncontrolling interests

     (2     (2     —     
                        

Net loss attributable to Realogy

   $ (99   $ (262   $ 163   
                        

 

(1) Total expenses for the year ended December 31, 2010 include $21 million of restructuring costs and $1 million of merger costs, offset by a net benefit of $323 million of former parent legacy items primarily as a result of tax and other liability adjustments. Total expenses for the year ended December 31, 2009 include $70 million of restructuring costs and $1 million of merger costs offset by a benefit of $34 million of former parent legacy items (comprised of a benefit of $55 million recorded at Cartus related to Wright Express Corporation (“WEX”) partially offset by $21 million of expenses recorded at Corporate) and a gain on the extinguishment of debt of $75 million.

Net revenues increased $158 million (4%) for the year ended December 31, 2010 compared with the year ended December 31, 2009 principally due to an increase in the average price of homes sold and the impact of the Primacy acquisition.

Total expenses decreased $182 million (4%) primarily due to a net benefit of $323 million of former parent legacy items primarily as a result of tax and other liability adjustments compared to a net benefit of $34 million of former parent legacy items during the same period in 2009 which was primarily comprised of $55 million of tax receivable payments from WEX, as well as a decrease in restructuring expenses of $49 million compared to the same period in 2009. The decrease in expenses was partially offset by an $82 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 $21 million increase in interest expense.

Our income tax expense for the year ended December 31, 2010 was $133 million and was comprised of the following:

 

   

$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;

 

   

$22 million of income tax expense was recorded for an increase in deferred tax liabilities associated with indefinite-lived intangible assets; and

 

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$2 million of income tax expense was recognized primarily for foreign and state income taxes for certain jurisdictions.

No Federal income tax benefit was recognized for the current period due to the recognition of a full valuation allowance for domestic operations.

Following is a more detailed discussion of the results of each of our reportable segments for the year ended December 31:

 

    Revenues (a)     EBITDA (b)(c)     Margin  
    2010     2009     % Change     2010     2009     % Change     2010     2009     Change  

Real Estate Franchise Services

  $ 560      $ 538        4   $ 352      $ 323        9     63     60     3   

Company Owned Real Estate Brokerage Services

    3,016        2,959        2        80        6        1,233        3        —          3   

Relocation Services

    405        320        27        109        122        (11     27        38        (11

Title and Settlement Services

    325        328        (1     25        20        25        8        6        2   

Corporate and Other (d)

    (216     (213     *        269        (6     *         
                                         

Total Company

  $ 4,090      $ 3,932        4   $ 835      $ 465        80     20     12     8   
                                         

Less: Depreciation and amortization

          197        194           

Interest expense, net

          604        583           

Income tax expense (benefit)

          133        (50        
                             

Net loss attributable to Realogy

        $ (99   $ (262        
                             

 

* not meaningful
(a) Revenues include elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by our Company Owned Real Estate Brokerage Services segment of $216 million and $213 million during the year ended December 31, 2010 and 2009, respectively.
(b) EBITDA for the year ended December 31, 2010 includes $21 million of restructuring costs and $1 million of merger costs, offset by a net benefit of $323 million of former parent legacy items primarily as a result of tax and other liability adjustments.
(c) EBITDA for the year ended December 31, 2009 includes $70 million of restructuring costs and $1 million of merger costs offset by a benefit of $34 million of former parent legacy items (comprised of a benefit of $55 million recorded at Cartus related to WEX partially offset by $21 million of expenses recorded at Corporate).
(d) EBITDA includes unallocated corporate overhead and a gain on the extinguishment of debt of $75 million for the year ended December 31, 2009

As described in the aforementioned table, EBITDA margin for “Total Company” expressed as a percentage of revenues increased 8 percentage points for the year ended December 31, 2010 compared to the same period in 2009 primarily due to a $289 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 3 percentage points to 63% from 60% in the prior period. The year ended December 31, 2010 reflected a decline in homesale transactions, primarily in the second half of the year, largely offset by higher average homesale prices. In addition, the segment had lower bad debt and notes reserve expense.

The Company Owned Real Estate Brokerage Services segment margin increased 3 percentage points to 3% from zero in the comparable prior period. The year ended December 31, 2010 reflected an increase in the average homesale price and lower operating expenses primarily as a result of restructuring and cost-saving

 

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activities partially offset by a decrease in the number of homesale transactions. Sales volume for the year ended December 31, 2010 benefited from the homebuyer tax credit in the first half of the year as well as a notable increase in activity at the mid and higher end of the housing market throughout the year.

The Relocation Services segment margin decreased 11 percentage points to 27% from 38% in the comparable prior period primarily due to the absence in 2010 of $55 million of tax receivable payments from WEX in 2009, partially offset by reduced employee costs and other cost saving initiatives.

The Title and Settlement Services segment margin increased 2 percentage points to 8% from 6% in the comparable prior period primarily due to cost reductions which more than offset the slight decrease in revenue.

Corporate and Other EBITDA for the year ended December 31, 2010 increased $275 million to $269 million due to a net benefit of $323 million of former parent legacy items primarily as a result of tax and other liability adjustments compared to a net cost of $21 million of former parent legacy items for the same period in 2009. The increase was also due to the absence in 2010 versus 2009 of a $14 million writedown of a cost method investment. The net increase was partially offset by the absence in 2010 versus 2009 of a $75 million gain on debt extinguishment and $11 million of proceeds from a legal settlement.

Real Estate Franchise Services

Revenues increased $22 million to $560 million and EBITDA increased $29 million to $352 million for the year ended December 31, 2010 compared with the same period in 2009.

Intercompany royalties from our Company Owned Real Estate Brokerage Services segment increased $4 million from $202 million in 2009 to $206 million in 2010. These intercompany royalties are eliminated in consolidation through the Corporate and Other segment and therefore have no impact on consolidated revenues and EBITDA, but do affect segment level revenues and EBITDA. See “Company Owned Real Estate Brokerage Services” for a discussion as to the drivers related to this period over period revenue increase for real estate franchise services.

International revenue increased $4 million during the year ended December 31, 2010, while third-party domestic franchisee royalty revenue decreased $11 million compared to the prior year due to a 6% decrease in the number of homesale transactions partially offset by a 4% increase in the average homesale price. In addition, marketing revenue and related marketing expenses increased $27 million and $22 million, respectively.

The $29 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 $7 million decrease in expenses related to conferences and franchisee events. In 2011, we expect that bad debt expense will revert to a more normalized level and conference expenses will increase as we are holding conferences for all of our brands in 2011 which was not the case in 2010.

Company Owned Real Estate Brokerage Services

Revenues increased $57 million to $3,016 million and EBITDA increased $74 million to $80 million for the year ended December 31, 2010 compared with the same period in 2009.

Excluding REO revenues, revenues increased $87 million primarily due to increased commission income earned on homesale transactions which was driven by an 11% increase in the average price of homes sold, partially offset by a 7% 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 7% decrease in homesale transactions is reflective of industry trends in the markets we serve and the decrease may have been

 

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higher if the housing market was not aided by the 2010 homebuyer tax credit program in the first half of 2010, particularly in locations which have lower average homesale prices. Separately, revenues from our REO asset management company decreased by $30 million to $36 million in the year ended December 31, 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 $74 million due to the $57 million increase in revenues discussed above as well as:

 

   

a decrease in restructuring expense of $35 million for the year ended December 31, 2010 compared to the same period in the prior year;

 

   

a decrease of $60 million in other operating expenses, net of inflation, primarily due to restructuring and cost-saving activities as well as reduced employee costs;

 

   

an increase of $6 million in equity earnings related to our investment in PHH Home Loans; and

 

   

a decrease of $5 million in marketing costs due to cost reduction initiatives;

partially offset by:

 

   

an increase of $82 million in commission expenses paid to real estate agents as a result of the increase in revenues earned on homesale transactions; and

 

   

an increase of $4 million in royalties paid to our Real Estate Franchise Services segment as a result of the increase in revenues earned on homesale transactions.

Relocation Services

Revenues increased $85 million to $405 million, including $75 million related to Primacy, and EBITDA decreased $13 million to $109 million, despite an increase of $14 million related to Primacy, for the year ended December 31, 2010 compared with the same period in 2009.

Relocation revenue, excluding the Primacy acquisition, increased $10 million and was primarily driven by a $7 million increase in international revenue due to higher transaction volume. The acquisition of Primacy in January 2010 contributed $75 million of revenue during the year ended December 31, 2010, which primarily consisted of $31 million of referral and domestic relocation service fee revenue, $25 million of government at-risk revenue and $14 million of international revenue.

EBITDA, excluding the Primacy acquisition, decreased $27 million for the year ended December 31, 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 and the Primacy results, EBITDA increased $28 million primarily as a result of a $12 million decrease in other operating expenses as a result of reduced employee costs and other cost-saving initiatives, a $9 million decrease in restructuring expenses, and a $4 million year over year reduction in legal expenses. EBITDA, excluding the impact of the WEX tax receivable payments, increased $42 million.

Title and Settlement Services

Revenues decreased $3 million to $325 million and EBITDA increased $5 million to $25 million for the year ended December 31, 2010 compared with the same period in 2009.

The decrease in revenues was primarily driven by an $11 million decrease in resale volume and a $7 million decrease in volume from refinancing transactions partially offset by a $13 million increase in underwriter revenue. The refinancing activity was weighted towards the second half of 2010 when mortgage rates fell below 5% for an extended period of time. EBITDA increased $5 million primarily due to $7 million of cost reductions offset by the decrease in revenues discussed above.

 

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2010 and 2009 Restructuring Programs

During the years ended December 31, 2010 and 2009, the Company committed to various initiatives targeted principally at reducing costs and enhancing organizational efficiencies while consolidating existing processes and facilities. The following are total restructuring charges by segment as of December 31:

 

     2010     2009  
     Expense
Recognized
and Other
Additions
    Expense
Recognized
and Other
Additions (b)
 

Real Estate Franchise Services

   $ —        $ 3   

Company Owned Real Estate Brokerage Services

     13        52   

Relocation Services

     4 (a)      9   

Title and Settlement Services

     3        3   

Corporate and Other

     2        7   
                
   $ 22      $ 74   
                

 

(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) During the year ended December 31, 2009, the Company reversed $4 million in the Consolidated Statement of Operations related to restructuring accruals established in 2006 through 2008.

Year Ended December 31, 2009 vs. Year Ended December 31, 2008

Our consolidated results comprised the following:

     Year Ended December 31,  
     2009     2008     Change  

Net revenues

   $ 3,932      $ 4,725      $ (793

Total expenses (1)

     4,266        6,988        (2,722
                        

Loss before income taxes, equity in earnings and noncontrolling interests

     (334     (2,263     1,929   

Income tax benefit

     (50     (380     330   

Equity in (earnings) losses of unconsolidated entities

     (24     28        (52
                        

Net loss

     (260     (1,911     1,651   

Less: Net income attributable to noncontrolling interests

     (2     (1     (1
                        

Net loss attributable to Realogy

   $ (262   $ (1,912   $ 1,650   
                        

 

(1) Total expenses for the year ended December 31, 2009 include $70 million of restructuring costs and $1 million of merger costs offset by a benefit of $34 million of former parent legacy items (comprised of a benefit of $55 million recorded at Cartus related to WEX partially offset by $21 million of expenses recorded at Corporate) and a gain on the extinguishment of debt of $75 million. Total expenses for the year ended December 31, 2008 include impairment charges of $1,789 million, $58 million of restructuring costs and $2 million of merger costs offset by a benefit of $20 million of former parent legacy costs.

Net revenues decreased $793 million (17%) for the year ended December 31, 2009 compared with the year ended December 31, 2008 principally due to a decrease in revenues across most of our operating segments, primarily due to decreases in transaction side volume and the average price of homes sold as well as our 2008 exit from the at-risk relocation business.

 

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Total expenses decreased $2,722 million (39%) primarily due to the following:

 

   

the absence in 2009 of an impairment charge of $1,789 million recorded in 2008 related to the Company’s intangible assets, goodwill and investments in unconsolidated entities;

 

   

a decrease of $425 million of commission expenses paid to real estate agents due to lower gross commission income and a higher portion of retained commissions;

 

   

a decrease of $390 million in operating and marketing expenses primarily due to restructuring activities implemented in 2008 and throughout 2009 and the 2008 exit from the at-risk relocation business;

 

   

a decrease in interest expense of $41 million as a result of decreasing interest rates;

 

   

an incremental increase of $14 million in former parent legacy benefit items; and

 

   

a gain on the extinguishment of debt of $75 million;

partially offset by:

 

   

an incremental increase in restructuring expenses of $12 million.

Not including the impairment charge of $1,789 million recorded in 2008, the Company reduced total expenses by $933 million which more than offset the $793 million decrease in revenue.

Our income tax benefit for the year ended December 31, 2009 was $50 million. Our income tax benefit was comprised of the following:

 

   

in assessing the valuation allowance at December 31, 2009, the Company determined that a full valuation allowance was required for our net definite-lived deferred tax asset balance. The result was a reduction to the recorded valuation allowance related to federal and state net operating loss carryforwards and foreign tax credit carryforwards;

 

   

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

 

   

income tax expense was recognized for foreign and state income taxes for certain jurisdictions; and

 

   

income tax expense was recorded for an increase in deferred tax liabilities associated with indefinite-lived intangible assets.

Following is a more detailed discussion of the results of each of our reportable segments for the year ended December 31:

 

     Revenues (a)     EBITDA (b) (c)     Margin  
     2009     2008     %
Change
    2009     2008     %
Change
    2009     2008     Change  

Real Estate Franchise Services

   $ 538      $ 642        (16 %)    $ 323      $ (597     154     60     (93 %)      153   

Company Owned Real Estate

                  

Brokerage Services

     2,959        3,561        (17     6        (269     102        —          (8     8   

Relocation Services

     320        451        (29     122        (257     147        38        (57     95   

Title and Settlement Services

     328        322        2        20        (303     107        6        (94     100   

Corporate and Other (d)

     (213     (251     *        (6     (23     *         
                                                      

Total Company

   $ 3,932      $ 4,725        (17 %)    $ 465      $ (1,449     132     12     (31 %)      43   
                                                      

Less: Depreciation and amortization

           194        219           

Interest expense, net

           583        624           

Income tax benefit

           (50     (380        
                              

Net loss attributable to Realogy

         $ (262   $ (1,912        
                              

 

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* Not meaningful.
(a) Revenues include 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 $213 million and $251 million during the year ended December 31, 2009 and 2008, respectively.
(b) EBITDA for the year ended December 31, 2009 includes $70 million of restructuring costs and $1 million of merger costs offset by a benefit of $34 million of former parent legacy items (comprised of a benefit of $55 million recorded at Cartus related to WEX partially offset by $21 million of expenses recorded at Corporate).
(c) EBITDA for the year ended December 31, 2008 includes impairment charges of $1,789 million, $58 million of restructuring costs and $2 million of merger costs offset by a benefit of $20 million of former parent legacy costs.
(d) EBITDA includes unallocated corporate overhead and a gain on the extinguishment of debt of $75 million for the year ended December 31, 2009.

As described in the aforementioned table, EBITDA margin for “Total Company” expressed as a percentage of revenues increased 43 percentage points for the year ended December 31, 2009 compared to the same period in 2008 primarily due to the absence in 2009 of impairment charges related to our goodwill and intangible assets, cost-saving initiatives implemented at all of the business units and a gain on extinguishment of debt of $75 million.

On a segment basis, the Real Estate Franchise Services segment margin increased 153 percentage points to 60% versus a negative 93% in the comparable prior period in 2008. The year ended December 31, 2008 included a $953 million impairment of goodwill and intangible assets. Excluding the impairment charges, Real Estate Franchise Services segment margin would have been 55% in 2008. The year ended December 31, 2009 also reflected lower operating expense as a result of cost-savings initiatives as well as an increase in the average homesale broker commission rate partially offset by decreases in the average homesale price and the number of homesale transactions.

The Company Owned Real Estate Brokerage Services segment margin increased 8 percentage points to zero from a negative 8% for the year ended December 31, 2008. The segment margin was impacted by lower operating expenses in 2009 primarily as a result of restructuring and cost-saving activities partially offset by a decrease in the average homesale price. The year ended December 31, 2008 included impairment charges of $195 million. Excluding the 2008 impairment charges, Company Owned Real Estate Brokerage Services segment margin would have been negative 1% in 2008.

The Relocation Services segment margin increased 95 percentage points to 38% from a negative 57% in the comparable prior period. The segment margin was positively impacted by the receipt of $55 million in payments from WEX in settlement of remaining contingent tax obligations with the Company and lower operating expenses primarily as a result of restructuring and cost-saving activities partially offset by lower at risk homesale revenue due to the elimination of the government portion of our at-risk business. The year ended December 31, 2008 included a $335 million impairment of intangible assets and goodwill. Excluding the impairment charges, Relocation Services segment margin would have been 17% in 2008.

The Title and Settlement Services segment margin increased 100 percentage points to 6% from a negative 94% in the comparable prior period. The year ended December 31, 2008 included impairment charges of $306 million. Excluding the impairment charges, Title and Settlement Services segment margin would have been 1% in 2008. The segment margin was positively impacted by increased refinance volume partially offset by reduced homesale volume.

The Corporate and Other expense for the year ended December 31, 2009 was a negative $6 million compared to a negative $23 million in the same period in 2008. The decrease in expenses was primarily due to a

 

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gain on extinguishment of debt of $75 million and $11 million of litigation proceeds offset by a $41 million reduction in legacy benefits, a $14 million writedown of a cost method investment, a $5 million incremental increase in restructuring costs, the absence of $5 million of insurance proceeds received in 2008 and a $4 million increase in pension expense.

Real Estate Franchise Services

Revenues decreased $104 million to $538 million and EBITDA increased $920 million to $323 million for the year ended December 31, 2009 compared with the same period in 2008.

Intercompany royalties from our Company Owned Real Estate Brokerage Services segment decreased $35 million from $237 million in 2008 to $202 million in 2009. These intercompany royalties are eliminated in consolidation through the Corporate and Other segment and therefore have no impact on consolidated revenues and EBITDA, but do affect segment level revenues and EBITDA. See “Company Owned Real Estate Brokerage Services” for a discussion as to the drivers related to this period over period revenue decrease for real estate franchise services.

The decrease in revenue was also driven by a $38 million decrease in third-party domestic franchisees royalty revenue due to a 1% decrease in the number of homesale transactions from our third-party franchisees and an 11% decrease in the average homesale price partially offset by a higher average homesale broker commission rate. Revenue from foreign franchisees decreased $10 million. In addition, marketing revenue and related marketing expenses decreased $12 million and $11 million, respectively, due to lower royalty volume and cost-cutting initiatives completed prior to December 31, 2009.

The increase in EBITDA was principally due to the absence of a $953 million impairment of intangible assets recorded in 2008, a $21 million decrease in bad debt expense and note reserves expense in 2009 as a result of improving collection activity in 2009, an $18 million reduction in employee related costs and benefits, and a $14 million decrease in other operating expenses, primarily the result of cost-saving activities, partially offset by the reduction in revenues discussed above.

Company Owned Real Estate Brokerage Services

Revenues decreased $602 million to $2,959 million and EBITDA increased $275 million to $6 million for the year ended December 31, 2009 compared with the same period in 2008.

The decrease in revenues, excluding REO revenues, of $578 million was substantially comprised of reduced commission income earned on homesale transactions which was primarily driven by an 18% decrease in the average price of homes sold. The decrease was partially offset by an increase in the average homesale broker commission rate. The significant decrease in average homesale price of 18% is the result of a continuation of the shift in the mix and volume of its overall homesale activity from higher price point areas to lower price point areas as well as a significant level of foreclosure and short sale activity in certain markets. The number of homesale transactions remained flat in 2009 compared to 2008 and we believe this is reflective of industry trends in the markets we serve. Separately, revenues from our REO asset management company decreased by $24 million to $66 million for the year ended December 31, 2009 compared to the same period in 2008. Our REO operations facilitate the maintenance and sale of foreclosed homes on behalf of lenders and the profitability of this business tends to be countercyclical to the overall state of the housing market.

Despite the decrease in revenues discussed above, EBITDA increased for the year ended December 31, 2009 compared to the year ended December 31, 2008 primarily due to:

 

   

the absence in 2009 of an impairment charge of $162 million related to intangible assets along with a $33 million incremental impairment charge related to the Company’s investment in PHH Home Loans recorded in 2008;

 

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a decrease of $425 million in commission expenses paid to real estate agents as a result of the reduction in revenue and a higher portion of retained commissions;

 

   

a decrease of $35 million in royalties paid to our real estate franchise business, principally as a result of the reduction in revenues earned on homesale transactions;

 

   

a decrease in marketing costs of $37 million due to a shift to technology media marketing and other cost reduction initiatives;

 

   

a $5 million reduction in certain estimated business acquisition liabilities;

 

   

a decrease of $133 million of other operating expenses, net of inflation, primarily due to restructuring, cost-saving activities and reduced employee costs; and

 

   

an increase of $52 million in equity in earnings of unconsolidated entities related to our investment in PHH Home Loans partially due to the absence in 2009 of a $31 million impairment charge recorded in equity (earnings) losses of unconsolidated entities in 2008.

To counteract the revenue decline, the Company has implemented significant cost-saving measures over the past three years which have reduced fixed costs associated with operating a full service real estate brokerage business. The realization of these cost-saving measures have more than offset the overall decline in revenues for the year ended December 31, 2009.

Relocation Services

Revenues decreased $131 million to $320 million and EBITDA increased $379 million to $122 million for the year ended December 31, 2009 compared with the same period in 2008.

The decrease in revenues was primarily driven by:

 

   

a decrease of $75 million in at-risk homesale revenue mainly due to the elimination of the government portion of our at-risk business;

 

   

a $35 million decrease in referral fee revenue primarily due to lower domestic transaction volume as a result of lower homesale authorization volume;

 

   

a $19 million decrease in relocation service fee revenues primarily due to lower domestic transaction volume; and

 

   

a $6 million decrease in insurance premium revenue due to lower homesale and household goods service volume;

partially offset by:

 

   

$6 million of incremental international revenue due to increased transaction volume.

EBITDA for the year ended December 31, 2009 increased primarily due to:

 

   

the absence in 2009 of a $335 million impairment of intangible assets recorded in 2008;

 

   

$6 million of recurring tax receivable payments from WEX as well as a net $49 million tax receivable prepayment from WEX. The $49 million payment represented the payment in full of the remaining contingent obligations to Realogy;

 

   

the reduction in costs of $77 million for at-risk homesale transactions as a result of the elimination of the government portion of our at-risk business;

 

   

a decrease of $41 million of other operating expenses primarily as a result of cost-saving activities and reduced employee costs; and

 

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$9 million related to favorable foreign exchange rate movement in 2009 compared to 2008.

EBITDA was negatively impacted by the reduction in revenues discussed above as well as $6 million of incremental restructuring expenses.

Title and Settlement Services

Revenues increased $6 million to $328 million and EBITDA increased $323 million to $20 million for the year ended December 31, 2009 compared with the same period in 2008.

The increase in revenues is primarily driven by a $19 million increase in volume from refinance transactions and a $4 million increase related to acquisitions and joint ventures, partially offset by $19 million of reduced resale volume consistent with the decline in overall homesale transactions noted in our Company Owned Real Estate Brokerage Services segment.

The increase in EBITDA was primarily driven by:

 

   

the increase in revenues discussed above;

 

   

the absence in 2009 of a $289 million impairment of intangible assets and goodwill and a $17 million impairment of our investments in unconsolidated entities recorded in 2008; and

 

   

$25 million of cost reductions as a result of lower transaction volume and cost-saving initiatives;

partially offset by:

 

   

the absence in 2009 of a $5 million gain from the sale of joint venture arrangements in 2008; and

 

   

an incremental increase of $3 million in restructuring expense.

2009 and 2008 Restructuring Programs

During the years ended December 31, 2009 and 2008, the Company committed to various initiatives targeted principally at reducing costs and enhancing organizational efficiencies while consolidating existing processes and facilities. The following are total restructuring charges by segment as of December 31:

 

     2009      2008  
     Expense
Recognized
(a)
     Expense
Recognized
 

Real Estate Franchise Services

   $ 3       $ 3   

Company Owned Real Estate Brokerage Services

     52         45   

Relocation Services

     9         3   

Title and Settlement Services

     3         5   

Corporate and Other

     7         2   
                 
   $ 74       $ 58   
                 

 

(a) During the year ended December 31, 2009, the Company reversed $4 million in the Consolidated Statement of Operations related to restructuring accruals established in 2006 through 2008.

 

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FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

FINANCIAL CONDITION

 

     December 31,
2010
    December 31,
2009
    Change  

Total assets

   $ 8,029      $ 8,041      $ (12

Total liabilities

     9,101        9,022        79   

Total equity (deficit)

     (1,072     (981     (91

For the year ended December 31, 2010, total assets decreased $12 million primarily as a result of $67 million of amortization related to franchise agreements, $25 million of depreciation related to property and equipment and a $9 million decrease in deferred income taxes. The decrease was partially offset by the impact of the Primacy acquisition in January 2010 which increased relocation properties held for sale by $21 million, goodwill by $16 million and intangible assets, net of amortization, by $56 million. In addition, relocation receivables increased $52 million and trade receivables increased $12 million for the year ended December 31, 2010.

Total liabilities increased $79 million principally due to an increase in indebtedness as a result of the Company entering into $163 million of revolving letter of credit backed credit facilities, a $123 million increase in deferred income taxes, an increase of $107 million in accounts payable and an increase of $23 million in accrued expenses and other current liabilities, partially offset by a $401 million decrease in amounts due to former parent as a result of tax and other liability adjustments.

Total equity (deficit) decreased $91 million compared to the prior year primarily due to a net loss attributable to Realogy of $99 million for the year ended December 31, 2010.

LIQUIDITY AND CAPITAL RESOURCES

Our liquidity position may 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.

While the housing market in 2010 showed signs of stabilization, 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 as well as reduced availability of mortgage financing;

 

   

lower unit sales, following the expiration of the federal homebuyer tax credit and limited or negative equity in homes;

 

   

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;

 

   

a lack of stability or improvement in home ownership levels in the U.S or less favorable consumer views of home ownership; and

 

   

legislative or regulatory reform, including but not limited to reform that materially adversely impacts the financing of the U.S. housing market.

 

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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.

At December 31, 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. Under our senior secured credit facility, our senior secured leverage ratio may not exceed 4.75 to 1.0 for the fiscal quarter ending March 31, 2011 and for each fiscal quarter thereafter.

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

Year ended December 31, 2010 vs. year ended December 31, 2009

At December 31, 2010, we had $192 million of cash and cash equivalents, a decrease of $63 million compared to the balance of $255 million at December 31, 2009. The following table summarizes our cash flows for the years ended December 31, 2010 and 2009:

 

     Year Ended December 31,  
     2010     2009     Change  

Cash provided by (used in):

      

Operating activities

   $ (118   $ 341      $ (459

Investing activities

     (70     (47     (23

Financing activities

     124        (479     603   

Effects of change in exchange rates on cash and cash equivalents

     1        3        (2
                        

Net change in cash and cash equivalents

   $ (63   $ (182   $ 119   
                        

For the year ended December 31, 2010 we used $459 million of additional cash in operations compared to the same period in 2009. For the year ended December 31, 2010, $118 million of cash was used in operating activities due to uses of cash related to trade receivables and relocation receivables of $9 million and $27 million, respectively, as well as by negative cash flows from operating results after $550 million of cash interest payments, partially offset by sources of cash related to accounts payable and relocation properties held for sale of $30 million and $43 million, respectively. For the year ended December 31, 2009, $341 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 $442 million and $22 million, respectively, and trade receivables and accounts payable of $40 million and $26 million, respectively, partially offset by a $48 million use of cash related to due from former parent and negative cash flows from operating results after $487 million of cash interest payments.

For the year ended December 31, 2010 we used $23 million more cash for investing activities compared to the same period in 2009. For the year ended December 31, 2010, $70 million of cash was used in investing

 

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activities and was primarily due to $49 million of property and equipment additions, $17 million related to acquisition related payments and the purchase of certificates of deposit for $9 million, partially offset by proceeds from the sale of assets of $5 million. For the year ended December 31, 2009, $47 million of cash was used in investing activities and was primarily comprised of $40 million of property and equipment additions and $5 million related to acquisition related payments.

For the year ended December 31, 2010 we provided $603 million more cash from financing activities compared to the same period in 2009. For the year ended December 31, 2010, $124 million of cash was provided by financing activities and was comprised of $142 million of proceeds from drawings on our unsecured revolving credit facilities and additional securitization obligations of $27 million, partially offset by $32 million of term loan facility repayments. For the year ended December 31, 2009, $479 million of cash was used in financing activities and was comprised of $410 million of securitization obligation repayments, a decrease in incremental revolver borrowings of $515 million and $32 million of term loan facility repayments, partially offset by proceeds of $500 million related to the issuance of the Second Lien Loans.

Year ended December 31, 2009 vs. year ended December 31, 2008

At December 31, 2009, we had $255 million of cash and cash equivalents, a decrease of $182 million compared to the balance of $437 million at December 31, 2008. The following table summarizes our cash flows for the year ended December 31, 2009 and 2008:

 

     Year Ended December 31,  
     2009     2008     Change  

Cash provided by (used in):

      

Operating activities

   $ 341      $ 109      $ 232   

Investing activities

     (47     (23     (24

Financing activities

     (479     199        (678

Effects of change in exchange rates on cash and cash equivalents

     3        (1     4   
                        

Net change in cash and cash equivalents

   $ (182   $ 284      $ (466
                        

For the year ended December 31, 2009 we provided $232 million of additional cash from operations compared to the same period in 2008. For the year ended December 31, 2009, $341 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 $442 million and $22 million, respectively, and trade receivables and accounts payable of $40 million and $26 million, respectively, partially offset by a $48 million use of cash related to due from former parent and negative cash flows from operating results after $487 million of cash interest payments. For the year ended December 31, 2008, $109 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 $190 million and $161 million, respectively, and other assets of $45 million, partially offset by a $57 million use of cash related to accounts payable and negative cash flows from operating results after $635 million of cash interest payments.

For the year ended December 31, 2009 we used $24 million more cash for investing activities compared to the same period in 2008. For the year ended December 31, 2009, $47 million of cash was used in investing activities and was primarily comprised of $40 million of property and equipment additions and $5 million related to acquisition related payments. For the year ended December 31, 2008, $23 million of cash was used in investing activities and was primarily comprised of $52 million of property and equipment additions and $12 million related to acquisition related payments. The increases were partially offset by $12 million of proceeds from the corporate aircraft sale leaseback and termination, $12 million in proceeds from the sale of a joint venture, an increase in restricted cash of $10 million and $7 million in proceeds from the sale of property and equipment.

 

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For the year ended December 31, 2009 we used $678 million more cash in financing activities compared to the same period in 2008. For the year ended December 31, 2009, $479 million of cash was used in financing activities and was comprised of $410 million of securitization obligation repayments, a decrease in incremental revolver borrowings of $515 million and $32 million of term loan facility repayments, partially offset by proceeds of $500 million related to the issuance of the Second Lien Loans. For the year ended December 31, 2008, $199 million of cash was provided by financing activities and was comprised of an increase in incremental revolver borrowings of $515 million, partially offset by securitization obligation repayments of $258 million and $32 million of term loan facility repayments.

Financial Obligations

Senior Secured Credit Facility

In connection with the closing of the Merger Transactions on April 10, 2007, the Company entered into a senior secured credit facility consisting 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), as amended by the Senior Secured Credit Facility Amendment, collectively referred to as the “First Lien Facilities”), and (iv) a $650 million incremental (or accordion) loan facility, which was utilized in connection with the incurrence of Second Lien Loans described below.

Effective February 3, 2011, the Company entered into a first amendment to our senior secured credit facility (the “Senior Secured Credit Facility Amendment”) and an incremental assumption agreement, which resulted in the following:

 

   

certain lenders extended the maturity of certain first lien term loans, revolving commitments and synthetic letter of credit commitments to October 10, 2016, April 10, 2016, and October 10, 2016, respectively, which extensions resulted in approximately $2,424 million aggregate principal amount of extended term loans, approximately $461 million aggregate principal amount of commitments in respect of extended revolving loans and approximately $171 million aggregate principal amount of extended synthetic letter of credit commitments;

 

   

certain lenders simultaneously converted approximately $98 million aggregate principal amount of commitments in respect of extended revolving loans to extended term loans, thereby reducing the commitments under our revolving credit facility to $652 million;

 

   

the net proceeds of the $700 million aggregate principal amount of First and a Half Lien Notes together with cash on hand were used to prepay $700 million of the outstanding extended term loans, thereby reducing the aggregate principal amount of extended term loans to $1,822 million;

 

   

the interest rate with respect to the extended term loans was increased by 1.25% from the rate applicable to the non-extended term loans;

 

   

the interest rate with respect to the extended revolving loans was increased by 1.0% from the rate applicable to the non-extended revolving loans; and

 

   

the fee with respect to the synthetic letter of credit facility was increased by 1.25% from the fee applicable to the non-extending synthetic letter of credit facility.

The Senior Secured Credit Facility Amendment also provides for the following:

 

   

allows for one or more future issuances of additional senior secured notes or unsecured notes or loans to prepay the Company’s first lien term loans, to be secured on either a pari passu basis with, or junior to, its first lien obligations under the senior secured credit facility;

 

   

allows for one or more future issuances of additional senior secured or unsecured notes or loans to prepay the Company’s second lien loans, to be secured on a pari passu basis with, or junior to, its second lien loans under the senior secured credit facility;

 

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allows for the incurrence of additional incremental term loans that are secured on a junior basis to the second lien loans in an aggregate amount not to exceed $350 million; and

 

   

provides that debt financing secured by a lien that is junior in priority to the first lien obligations under the senior secured credit facility (including, but not limited to, the First and a Half Lien Notes) will not, subject to certain exceptions, constitute senior secured debt for purposes of calculating the senior secured leverage ratio under the senior secured credit facility.

The extended term loans do not require any scheduled amortization of principal. The non-extended term loan facility will continue to provide for quarterly amortization payments totaling 1% per annum of the principal amount of the non-extended first lien term loans.

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 with respect to the extended term loans, 4.25% 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% (or with respect to the extended term loans 3.25%). With respect to the portion of term loans that were not extended on February 3, 2011, 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. There is no amortization on the extended term loans.

The Company’s senior secured credit facility provides for a six-year, $652 million revolving credit facility, which includes a $200 million letter of credit sub-facility and a $50 million swingline loan sub-facility. The Company uses the revolving credit facility for, among other things, working capital and other general corporate purposes, including permitted acquisitions and investments. 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 with respect to the extended revolving loans, 3.25%) or ABR plus 1.25% (or with respect to the extended revolving loans, 2.25%) in each case subject to reductions based on the attainment of certain leverage ratios.

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 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 December 31, 2010, the $257 million of capacity is being utilized by a $123 million letter of credit with Cendant for any remaining potential contingent obligations and $100 million of letters of credit for general corporate purposes. On January 5, 2011, we further reduced the capacity of the synthetic letter of credit facility to $223 million to remove the excess capacity above the outstanding letters of credit.

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 in arrears 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.

 

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First and a Half Lien Notes

On February 3, 2011, we issued $700 million aggregate principal amount of First and a Half Lien Notes in a private offering exempt from the registration requirements of the Securities Act. The First and a Half Lien Notes are secured by substantially the same collateral as the Company’s existing secured obligations under its senior secured credit facility, but the priority of the collateral liens securing the First and a Half Lien Notes is (i) junior to the collateral liens securing the Company’s first lien obligations under its senior secured credit facility and (ii) senior to the collateral liens securing the Company’s second lien obligations under its senior secured credit facility.

As discussed above, the net proceeds from the offering of the First and a Half Lien Notes, along with cash on hand, were used to prepay $700 million of certain of its first lien term loans that were extended in connection with the Senior Secured Credit Facility Amendment.

Other Bank Indebtedness

During the first six months of 2010, the Company entered into five separate revolving credit facilities to borrow up to $155 million. These facilities bear interest at a weighted average rate of LIBOR plus 1.6%, or 3% as of December 31, 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 December 31, 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 December 31, 2010, the Company has borrowed $163 million which is the total capacity of these facilities, $40 million of which was used to finance the Primacy acquisition in January 2010. On February 4, 2011, the Company repaid $55 million of outstanding borrowings under its revolving credit facilities.

Unsecured Notes

On April 10, 2007, the Company issued $1,700 million aggregate principal amount of 10.50% Senior Notes, $550 million aggregate principal amount of Senior Toggle Notes and $875 million aggregate principal amount of 12.375% Senior Subordinated Notes. The Company refers to these notes collectively using the term “Existing Notes.”

On January 5, 2011, the Company completed private exchange offers relating to its Existing Notes. Approximately $2,110 million aggregate principal amount of the Existing Notes were tendered for Convertible Notes, which are convertible at the holder’s option into Class A Common Stock of Holdings, and approximately $632 million aggregate principal amount of the Existing Notes were tendered for the Extended Maturity Notes.

On January 5, 2011, we issued:

 

   

$492 million aggregate principal amount of 11.50% Senior Notes and $1,144 million aggregate principal amount of 11.00% Series A Convertible Notes in exchange for $1,636 million aggregate principal amount of outstanding 10.50% Senior Notes;

 

   

$130 million aggregate principal amount of 12.00% Senior Notes and $291 million aggregate principal amount of 11.00% Series B Convertible Notes in exchange for $421 million aggregate principal amount of outstanding Senior Toggle Notes; and

 

   

$10 million aggregate principal amount of 13.375% Senior Subordinated Notes and $675 million aggregate principal amount of 11.00% Series C Convertible Notes in exchange for $685 million aggregate principal amount of outstanding 12.375% Senior Subordinated Notes.

As a result of the Debt Exchange Offering, we extended the maturity of approximately $2,742 million aggregate principal amount of our existing Unsecured Notes to 2017 and 2018, leaving approximately $303

 

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million aggregate principal amount of Existing Notes that mature in 2014 and 2015. In addition, pursuant to the terms of the indenture governing the terms of the Convertible Notes, the Convertible Notes are redeemable at our option at a price equal to 90% of the principal amount thereof, plus accrued and unpaid interest to the date of redemption upon a Qualified Public Offering as such term is defined in the indenture.

The Company and Holdings have agreed to: (1) file a registration statement with the Securities and Exchange Commission (“SEC”), with respect to a registered offer to exchange each series of the Extended Maturity Notes for new registered notes having terms substantially identical in all material respects to the Extended Maturity Notes of the applicable series (except that the new registered notes will not contain terms with respect to additional interest or transfer restrictions) or (2) file a shelf registration statement with respect to resales of the Extended Maturity Notes.

The 10.50% 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 or October 1 immediately preceding the interest payment dates of April 15 and October 15 of each year. The 11.50% Senior Notes mature on April 15, 2017 and bear interest at a rate per annum of 11.50% payable semiannually to holders of record at the close of business on April 1 or 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, as amended. In order to avoid such treatment, the Company is required to redeem for cash a portion of each Senior Toggle Note then outstanding at the end of the accrual period ending in April 2012. 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 and as a result of the reduction in the amount of Senior Toggle Notes outstanding following the Debt Exchange Offering, the Company would be required to repay approximately $14 million in April 2012 in accordance with the indentures governing the Senior Toggle Notes.

The 12.00% Senior Notes mature on April 15, 2017 and bear interest at a rate per annum of 12.00% payable semiannually to holders of record at the close of business on April 1 or October 1 immediately preceding the interest payment dates of April 15 and October 15 of each year.

 

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The 12.375% 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. The 13.375% Senior Subordinated Notes mature on April 15, 2018 and bear interest at a rate per annum of 13.375% 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.

The 10.50% Senior Notes, the 11.50% Senior Notes, the Senior Toggle Notes and the 12.00% Senior Notes (collectively, the “Senior Notes”) are guaranteed on an unsecured senior basis, and the 12.375% Senior Subordinated Notes and the 13.375% Senior Subordinated Notes (collectively, 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. The Senior Notes are guaranteed by Holdings on an unsecured senior subordinated basis and the Senior Subordinated Notes are guaranteed by Holdings on an unsecured junior subordinated basis.

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.

Convertible Notes

The 11.00% Series A Convertible Notes, 11.00% Series B Convertible Notes and 11.00% Series C Convertible Notes mature on April 15, 2018 and bear interest at a rate per annum of 11.00% payable semiannually to holders of record at the close of business on April 1 or October 1 immediately preceding the interest payment dates of April 15 and October 15 of each year. The Convertible Notes are convertible into Class A Common Stock at any time prior to April 15, 2018. The Series A Convertible Notes and Series B Convertible Notes are initially convertible into 975.6098 shares of Class A Common Stock per $1,000 aggregate principal amount of Series A Convertible Notes and Series B Convertible Notes, which is equivalent to an initial conversion price of approximately $1.025 per share, and the Series C Convertible Notes are initially convertible into 926.7841 shares of Class A Common Stock per $1,000 aggregate principal amount of Series C Convertible Notes, which is equivalent to an initial conversion price of approximately $1.079 per share, in each case subject to adjustment if specified distributions to holders of the Class A Common Stock are made or specified corporate transactions occur, in each case as set forth in the indenture governing the Convertible Notes.

Following a Qualified Public Offering, the Company may, at its option, redeem the Convertible Notes, in whole or in part, at a redemption price, payable in cash, equal to 90% of the principal amount of the Convertible Notes to be redeemed plus accrued and unpaid interest thereon to, but excluding, the redemption date.

The Company and Holdings have also agreed to file a shelf registration statement with respect to resales of the outstanding Convertible Notes and the Class A Common Stock issuable upon conversion of the Convertible Notes.

Securitization Obligations

The Company has secured obligations through Apple Ridge Funding LLC and Cartus Financing Limited. These entities are consolidated special purpose entities that are utilized to securitize relocation receivables and

 

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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 $393 million and $364 million of underlying relocation receivables and other related relocation assets at December 31, 2010 and 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 Consolidated Balance Sheets.

Interest incurred in connection with borrowings under these facilities amounted to $7 million for the year ended December 31, 2010, $12 million for the year ended December 31, 2009 and $46 million for the year ended December 31, 2008. This interest is recorded within net revenues in the accompanying 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 2.4%, 2.3% and 4.9% for the year ended December 31, 2010, 2009 and 2008, respectively.

Apple Ridge Funding LLC

The Apple Ridge Funding LLC securitization program is a revolving program with a five-year term expiring in April 2012. This bankruptcy remote vehicle borrows from one or more commercial paper conduits and uses the proceeds to purchase the relocation assets. This asset-backed commercial paper program is guaranteed by the sponsoring financial institutions. This program is subject to termination at the end of the five-year agreement and, if not renewed, would amortize. The program 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, the Unsecured Notes and other material indebtedness. Given the current economic conditions, there is an associated risk relating to compliance with the Apple Ridge securitization performance trigger relating to limits on “net credit losses” (the estimated losses incurred on securitization receivables that have been written off, net of recoveries of such receivables), as net credit losses may not exceed $750 thousand in any one month or $1.5 million in any trailing 12-month period. The Company has not incurred any net credit losses in excess of these thresholds. These trigger events could result in an early amortization of this securitization obligation and termination of any further advances under the program.

Cartus Financing Limited

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, the indentures governing the Unsecured Notes and the indentures governing the New Notes. The £35 million facility has a term of five years and the £5 million working capital facility has a term of one year.

U.K. Relocation Receivables Funding Limited

On August 23, 2010, the Company terminated the U.K. Relocation Receivables Funding Limited securitization program in its entirety. Historically, the U.K. Relocation Receivables Funding Limited securitization program was utilized to finance relocation receivables and related assets with certain U.K. government and corporate clients.

 

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Debt Table

As of December 31, 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       $ —         $ 571   

Term loan facility (2)

   October 2013      3,059         3,059         —     

Second Lien Loans

   October 2017      650         650         —     

Other bank indebtedness (3)

   Various      163         163         —     

Senior Notes (4)

   April 2014      1,700         1,688         —     

Senior Toggle Notes (5)

   April 2014      470         468         —     

Senior Subordinated Notes (6)

   April 2015      875         864         —     

Securitization obligations: (7)

           

Apple Ridge Funding LLC

   April 2012      500         296         204   

Cartus Financing Limited (8)

   Various      62         35         27   
                             
      $ 8,229       $ 7,223       $ 802   
                             

 

(1) The available capacity under this facility was reduced by $179 million of outstanding letters of credit at December 31, 2010.
(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 3.29% at December 31, 2010.
(3) Consists of revolving credit facilities that are supported by letters of credit issued under the senior secured credit facility, $5 million is due in April 2011, $50 million is due in June 2011, $50 million is due in November 2011, $50 million is due in January 2013 and $8 million due in May 2015. In February 2011, the Company repaid $55 million of outstanding borrowings under these revolving credit facilities that were due in April and June 2011.
(4) Consists of $1,700 million of 10.50% Senior Notes due 2014, less a discount of $12 million.
(5) Consists of $470 million of 11.00%/11.75% Senior Toggle Notes due 2014, less a discount of $2 million.
(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 which expires in August 2015 and a £5 million working capital facility which expires in August 2011.

 

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Pro Forma Debt Table

The debt table below gives effect to the Refinancing Transactions as if they occurred on December 31, 2010.

 

     Expiration
Date
     Total
Capacity
     Outstanding
Borrowings
     Available
Capacity
 

Senior Secured Credit Facility:

           

Non-extended revolving credit facility (1)

     April 2013       $ 289       $ —         $ 210   

Extended revolving credit facility (1)

     April 2016       $ 363       $ —         $ 263   

Non-extended term loan facility

     October 2013         635         635         —     

Extended term loan facility

     October 2016         1,822         1,822         —     

First and a Half Lien Notes

     February 2019         700         700         —     

Second Lien Loans

     October 2017         650         650         —     

Other bank indebtedness (2)

     Various         163         163         —     

Existing Notes

           

10.50% Senior Notes

     April 2014         64         64         —     

11.00%/11.75% Senior Toggle Notes

     April 2014         49         49         —     

12.375% Senior Subordinated Notes (3)

     April 2015         190         187         —     

Extended Maturity Notes

           

11.50% Senior Notes (4)

     April 2017         492         488         —     

12.00% Senior Notes (5)

     April 2017         130         129         —     

13.375% Senior Subordinated Notes

     April 2018         10         10         —     

11.00% Convertible Notes

     April 2018         2,110         2,110         —     

Securitization obligations: (6)

           

Apple Ridge Funding LLC

     April 2012         500         296         204   

Cartus Financing Limited (7)

     Various         62         35         27   
                             
      $ 8,229       $ 7,338       $ 704   
                             

 

(1) As of December 31, 2010, there were no outstanding borrowings under the revolving credit facility. The available capacity under this facility was reduced by $79 million and $100 million of outstanding letters of credit on the non-extended and the extended revolving credit facility, respectively, at December 31, 2010. On March 1, 2011, the Company had $60 million outstanding on the revolving credit facility.
(2) Consists of revolving credit facilities that are supported by letters of credit issued under the senior secured credit facility, $5 million is due in April 2011, $50 million is due in June 2011, $50 million due November 2011, $50 million is due in January 2013 and $8 million due in May 2015. In February 2011, the Company repaid $55 million of outstanding borrowings under these revolving credit facilities that were due in April and June 2011.
(3) Consists of $190 million of 12.375% Senior Subordinated Notes due 2015, less a discount of $3 million.
(4) Consists of $492 million of 11.50% Senior Notes due 2017, less a discount of $4 million.
(5) Consists of $130 million of 12.00% Senior Notes due 2017, less a discount of $1 million.
(6) Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations.
(7) Consists of a £35 million facility which expires in August 2015 and a £5 million working capital facility which expires in August 2011.

Covenants under our Senior Secured Credit Facility and certain Indentures

Our senior secured credit facility and the indentures governing the First and a Half Lien Notes, the Extended Maturity Notes and the 12.375% Senior Subordinated 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;

 

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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 the First and a Half Lien Notes and debt that is junior in right of payment to the Unsecured Notes and the First and a Half Lien Notes.

In connection with our Debt Exchange Offering, we received consents from the holders of the 10.50% Senior Notes and Senior Toggle Notes to amend the respective indentures governing the terms of such Existing Notes to remove substantially all of the restrictive covenants and certain other provisions previously contained in such indentures.

As a result of the covenants to which we remain subject, 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 1.0 at December 31, 2010. The ratio steps down to 4.75 to 1.0 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, the First and a Half Lien Notes 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 Annual 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 maintenance covenant.

Based upon the Company’s financial forecast, 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. While the housing market in 2010 showed signs of stabilization, there remains substantial uncertainty with respect to the timing and scope of a housing recovery and if a housing recovery is delayed or is weak, we may be subject to additional pressure in maintaining compliance with our senior secured leverage ratio.

The Company has the right to cure 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 material judgments, change of control and cross-events of default on material indebtedness.

 

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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 immediately 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 First and a Half Lien Notes or the Unsecured Notes;

any of which could result in an event of default under the First and a Half Lien Notes or the Unsecured Notes or our Apple Ridge Funding LLC securitization program.

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 thereunder, 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 presented to demonstrate our compliance with the senior secured leverage ratio covenant in the senior secured credit facility. 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. 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;

 

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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.

Adjusted EBITDA as used in this Annual Report 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

Like EBITDA, Adjusted EBITDA has limitations as an analytical tool, and you should not consider Adjusted EBITDA either in isolation or as a substitute for analyzing our results as reported under GAAP. In addition to the limitations described above with respect to EBITDA, Adjusted EBITDA includes pro forma cost savings, the pro forma effect of business optimization initiatives and the pro forma full year effect of acquisitions and new franchisees. These adjustments may not reflect the actual cost-savings or pro forma effect recognized in future periods.

EBITDA and Adjusted EBITDA are not necessarily comparable to other similarly titled financial measures of other companies due to the potential inconsistencies in the method of calculation.

A reconciliation of net loss attributable to Realogy to EBITDA and Adjusted EBITDA for the year ended December 31, 2010 is set forth in the following table:

 

     For the Year  Ended
December 31, 2010
 

Net loss attributable to Realogy

   $ (99

Income tax expense (benefit)

     133   
        

Income before income taxes

     34   

Interest expense (income), net

     604   

Depreciation and amortization

     197   
        
EBITDA      835   

Covenant calculation adjustments:

  

Restructuring costs, merger costs and former parent legacy costs (benefit), net (a)

     (301

Pro forma cost savings for 2010 restructuring initiatives (b)

     20   

Pro forma effect of business optimization initiatives (c)

     49   

Non-cash charges (d)

     (4

Non-recurring fair value adjustments for purchase accounting (e)

     4   

Pro forma effect of acquisitions and new franchisees (f)

     13   

Apollo management fees (g)

     15   

Incremental securitization interest costs (h)

     2   
        

Adjusted EBITDA

   $ 633   
        

Total senior secured net debt (i)

   $ 2,905   

Senior secured leverage ratio

     4.59

Pro forma total senior secured net debt (j)

   $ 2,219   

Pro forma senior secured leverage ratio

     3.51

 

(a) Consists of $21 million of restructuring costs and $1 million of merger costs offset by a benefit of $323 million of former parent legacy items.
(b)

Represents actual costs incurred that are not expected to recur in subsequent periods due to restructuring activities initiated during 2010. From this restructuring, we expect to reduce our operating costs by approximately $34 million on a twelve-month run-rate basis and estimate that $14 million of such savings

 

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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 January 1, 2010 through the time they were put in place, had those actions been effected on January 1, 2010.

(c) Represents the twelve-month pro forma effect of business optimization initiatives that have been completed to reduce costs, including $12 million related to our Relocation Services new business start-ups, integration costs and acquisition related non-cash adjustments, $6 million related to vendor renegotiations, $23 million for employee retention accruals and $8 million of other initiatives. The employee retention accruals reflect the employee retention plans that have been implemented in lieu of our customary bonus plan, due to the ongoing and prolonged downturn in the housing market in order to ensure the retention of executive officers and other key personnel, principally within our corporate services unit and the corporate offices of our four business units.
(d) Represents the elimination of non-cash expenses, including $6 million of stock-based compensation expense, less $8 million for the change in the allowance for doubtful accounts and notes reserves from January 1, 2010 through December 31, 2010 and $2 million of other non-cash items.
(e) Reflects the adjustment for the negative impact of fair value adjustments for purchase accounting at the operating business segments primarily related to deferred rent for the twelve months ended December 31, 2010.
(f) Represents the estimated impact of acquisitions and new franchisees as if they had been acquired or signed on January 1, 2010. 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 January 1, 2010.
(g) Represents the elimination of annual management fees payable to Apollo for the twelve months ended December 31, 2010.
(h) Reflects the incremental borrowing costs incurred as a result of the securitization facilities refinancing for the twelve months ended December 31, 2010.
(i) Represents total borrowings under the senior secured credit facility, including the revolving credit facility, of $3,059 million plus $12 million of capital lease obligations less $166 million of readily available cash as of December 31, 2010.
(j) Reflects the prepayment of $700 million of outstanding extended term loans from proceeds from the First and a Half Lien Notes less $14 million of estimated expenses related to the issuance of the First and a Half Lien Notes.

Liquidity Risk

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 December 31, 2010. The ratio steps down to 4.75 to 1 on March 31, 2011 and thereafter.

For the fiscal year ended December 31, 2010, we were in compliance with the senior secured leverage ratio covenant with a ratio of 4.59 to 1.0. After giving effect to the Refinancing Transactions, our senior secured leverage ratio would have been 3.51 to 1.0 at December 31, 2010. Notwithstanding the reduction in our senior secured net debt for purposes of calculating the senior secured leverage ratio, a delayed or weak housing recovery may materially adversely affect our ability to maintain compliance with our senior secured leverage ratio given our highly leveraged capital structure.

Former Parent Contingent Liabilities

In accordance with the Separation and Distribution Agreement, the Company entered into certain guarantee commitments with Cendant (pursuant to the assumption of certain liabilities and the obligation to indemnify

 

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Cendant, Wyndham Worldwide and Travelport for such liabilities). 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%.

At December 31, 2010, the remaining due to former parent balance of $104 million 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.

Adverse outcomes from the unresolved due to former parent liabilities for which Realogy has assumed partial liability could be material with respect to our earnings or cash flows in any given reporting period.

Interest Rate Risk

Certain of our borrowings, primarily borrowings under our senior secured credit facility, borrowings under our other bank indebtedness 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.

***

We may need to incur additional debt or issue equity. 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. Our ability to make payments to fund working capital, capital expenditures, debt service, strategic acquisitions, joint ventures and investments 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.

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.

 

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Contractual Obligations

The following table summarizes our future contractual obligations as of December 31, 2010:

 

     2011      2012      2013      2014      2015      Thereafter      Total  

Term loan facility (a)

   $ 32       $ 31       $ 2,996       $ —         $ —         $ —         $ 3,059   

Second Lien Loans (b)

     —           —           —           —           —           650         650   

Other bank indebtedness (c)

     105         —           50         —           8         —           163   

10.50% Senior Notes (d)

     —           —           —           1,700         —           —           1,700   

11.00%/11.75% Senior Toggle Notes (d) (e)

     —           —           —           470         —           —           470   

12.375% Senior Subordinated Notes (d)

     —           —           —           —           875         —           875   

Securitized obligations (f)

     331         —           —           —           —           —           331   

Operating leases (g)

     143         101         64         37         25         24         394   

Capital leases

     6         5         2         1         —           —           14   

Purchase commitments (h)

     43         22         14         8         8         256         351   
                                                              

Total (i) (j)

   $ 660       $ 159       $ 3,126       $ 2,216       $ 916       $ 930       $ 8,007   
                                                              

 

(a) The Company’s 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 of October 2013. The Company has entered into derivative instruments to fix the interest rate for $425 million of the variable rate debt, which will result in interest payments of $27 million annually. The interest rate for the remaining portion of the variable rate debt of $2,634 million will be determined by the interest rates in effect during each period.
(b) The Company’s $650 million of Second Lien Loans bear interest at a rate of 13.50% per year and interest payments are payable semi-annually. The annual interest expense is approximately $88 million. The Second Lien Loans mature on October 15, 2017 and there is no scheduled amortization.
(c) Consists of revolving credit facilities that are supported by letters of credit issued under the senior secured credit facility, $5 million is due in April 2011, $50 million is due in June 2011, $50 million due November 2011, $50 million is due in January 2013 and $8 million is due in May 2015. The interest rate for the revolving credit facilities is variable and will be determined by the interest rates in effect during each period. The obligations are classified as current due to the revolving nature of the facilities. In February 2011, the Company repaid $55 million of outstanding borrowings under these revolving credit facilities that were due in April and June 2011.
(d) The Company utilized the PIK Interest option to satisfy interest payment obligations for the Senior Toggle Notes which increased the principal amount of the Senior Toggle Notes by $51 million in 2010. The PIK Interest election is the default election for the Senior Toggle Notes for future interest periods through October 15, 2011. Interest on the Senior Toggle Notes will compound semi-annually at 11.75% which will increase the principal amount accordingly. Starting April 2012, the annual interest payment on the Senior Toggle Notes will be approximately $58 million. The annual interest expense on the 10.50% Fixed Rate Senior Notes and 12.375% Senior Subordinated Notes is approximately $287 million.
(e) The Company would be subject to certain interest deduction limitations if the Senior Toggle Notes were treated as 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 at the end of the accrual period ending in April 2012.
(f) Excludes future cash payments related to interest expense as the underlying debt instruments are variable rate and the interest payments will be determined by the interest rates in effect during each period. These agreements expire in 2012 and 2015, however, the obligations are classified as current due to the current classification of the underlying assets that collateralize the obligations.
(g) The operating lease amounts included in the above table do not include variable costs such as maintenance, insurance and real estate taxes.
(h)

Purchase commitments include a minimum licensing fee that the Company is required to pay to Sotheby’s beginning in 2009 and will continue through 2054. The Company expects the annual minimum licensing fee to be approximately $2 million. The purchase commitments also include the minimum licensing fee to be

 

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paid to Meredith which began in 2009 and continue through 2057. The annual minimum fee began at $0.5 million in 2009 and increases to $4 million by 2014 and generally remains the same thereafter.

(i) On April 26, 2007, the Company established a $500 million standby irrevocable letter of credit for the benefit of Avis Budget Group Inc. in accordance with the Separation and Distribution Agreement. 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 backstops 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 reflect the then current estimate of Cendant contingent and other liabilities. On August 11, 2009, the letter of credit with Avis Budget Group Inc. was reduced from $500 million to $446 million primarily as a result of a reduction in contingent legal liabilities. In late 2010, the Company further reduced the letter of credit from $446 million to $123 million due to the IRS tax settlement and other liability adjustments. This letter of credit is not included in the contractual obligations table above.
(j) The contractual obligations table does not include the annual Apollo management fee which is equal to the greater of $15 million or 2% of Adjusted EBITDA and does not include other non-current liabilities such as pension liabilities of $49 million and unrecognized tax benefits of $34 million as the Company is not able to estimate the year in which these liabilities will be paid.

Pro Forma Contractual Obligations

The following table summarizes our future contractual obligations as of December 31, 2010, after giving effect to the Refinancing Transactions:

 

     2011      2012      2013      2014      2015      Thereafter      Total  

Non-extended term loan facility (a)

   $ 6       $ 6       $ 623       $ —         $ —         $ —         $ 635   

Extended term loan facility (b)

     —           —           —           —           —           1,822         1,822   

First and a Half Lien Notes (c)

     —           —           —           —           —           700         700   

Second Lien Loans (d)

     —           —           —           —           —           650         650   

Other bank indebtedness (e)

     105         —           50         —           8         —           163   

10.50% Senior Notes (f) (h)

     —           —           —           64         —           —           64   

11.50% Senior Notes (h)

     —           —           —           —           —           492         492   

11.00%/11.75% Senior Toggle Notes (f) (g) (h)

     —           —           —           49         —           —           49   

12.00% Senior Notes (h)

     —           —           —           —           —           130         130   

12.375% Senior Subordinated Notes (f) (h)

     —           —           —           —           190         —           190   

13.375% Senior Subordinated Notes (h)

     —           —           —           —           —           10         10   

11.00% Convertible Notes (h)

     —           —           —           —           —           2,110         2,110   

Securitized obligations (i)

     331         —           —           —           —           —           331   

Operating leases (j)

     143         101         64         37         25         24         394   

Capital leases

     6         5         2         1         —           —           14   

Purchase commitments (k)

     43         22         14         8         8         256         351   
                                                              

Total (l) (m)

   $ 634       $ 134       $ 753       $ 159       $ 231       $ 6,194       $ 8,105   
                                                              

 

(a) The Company’s non-extended 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 of October 2013. The Company has entered into derivative instruments to fix the interest rate for $425 million of the variable rate debt, which will result in interest payments of $27 million annually. The interest rate for the remaining portion of the variable rate debt of $210 million will be determined by the interest rates in effect during each period.
(b) The Company’s extended term loan facility matures in October 2016. The interest rate for the variable rate debt of $1,822 million will be determined by the interest rates in effect during each period. There is no scheduled amortization of principal.

 

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(c) The Company’s First and a Half Lien Notes bear interest at a rate of 7.875% per year and interest payments are due semi-annually in February and August. The first interest payment will be made in August 2011 and the annual interest expense is approximately $55 million. The First and a Half Lien Notes mature on February 15, 2019 and there is no scheduled amortization.
(d) The Company’s $650 million of Second Lien Loans bear interest at a rate of 13.50% per year and interest payments are payable semi-annually. The annual interest expense is approximately $88 million. The Second Lien Loans mature on October 15, 2017 and there is no scheduled amortization.
(e) Consists of revolving credit facilities that are supported by letters of credit issued under the senior secured credit facility, $5 million is due in April 2011, $50 million is due in June 2011, $50 million is due in November 2011, $50 million is due in January 2013 and $8 million is due in May 2015. The interest rate for the revolving credit facilities is variable and will be determined by the interest rates in effect during each period. The obligations are classified as current due to the revolving nature of the facilities. In February 2011, the Company repaid $55 million of outstanding borrowings under these revolving credit facilities that were due in April and June 2011.
(f) The Company utilized the PIK Interest option to satisfy interest payment obligations for the Senior Toggle Notes which increased the principal amount of the Senior Toggle Notes by $51 million in 2010. The PIK Interest election is the default election for the Senior Toggle Notes for future interest periods through October 15, 2011. Interest on the Senior Toggle Notes will compound semi-annually at 11.75% which will increase the principal amount accordingly. After the Debt Exchange Offering as described in (h) below, the annual interest payment on the Senior Toggle Notes will be approximately $6 million starting April 2012. The annual interest expense on the 10.50% Senior Notes and 12.375% Senior Subordinated Notes will be approximately $30 million.
(g) The Company would be subject to certain interest deduction limitations if the Senior Toggle Notes were treated as 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 at the end of the accrual period ending in April 2012. Assuming that the Company continues to utilize the PIK Interest option election through October 2011 for the remaining Senior Toggle Notes, after the Debt Exchange Offering, the Company would be required to repay approximately $14 million in April 2012. This payment is not reflected in the table above.
(h) In January 2011, the Company completed the Debt Exchange Offering. The results of the Debt Exchange Offering are as follows:

 

   

$1,636 million of the 10.50% Senior Notes were exchanged for $492 million of the 11.50% Senior Notes which matures in April 2017 and $1,144 million of the Series A Convertible Notes which matures in April 2018.

 

   

$421 million of the Senior Toggle Notes were exchanged for $130 million of the 12.00% Senior Notes which matures in April 2017 and $291 million of the Series B Convertible Notes which matures in April 2018.

 

   

$685 million of the 12.375% Senior Subordinated Notes were exchanged for $10 million of the 13.375% Senior Subordinated Notes and $675 million of the Series C Convertible Notes, both of which mature in April 2018.

After the completion of the Debt Exchange Offering, the Company has $303 million of 10.50% Senior Notes, Senior Toggle Notes and 12.375% Senior Subordinated Notes which remain outstanding. The annual interest expense for the three tranches of the Extended Maturity Notes is approximately $73 million, and the annual interest expense for the Convertible Notes is approximately $232 million, with the first interest payment to be paid on April 15, 2011. The annual interest payment on the Senior Toggle Notes will be approximately $6 million starting April 2012. The annual interest expense on the 10.50% Senior Notes and 12.375% Senior Subordinated Notes will be approximately $30 million.

 

(i)

Excludes future cash payments related to interest expense as the underlying debt instruments are variable rate and the interest payments will be determined by the interest rates in effect during each period. These

 

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agreements expire in 2012 and 2015, however, the obligations are classified as current due to the current classification of the underlying assets that collateralize the obligations.

(j) The operating lease amounts included in the above table do not include variable costs such as maintenance, insurance and real estate taxes.
(k) Purchase commitments include a minimum licensing fee that the Company is required to pay to Sotheby’s beginning in 2009 and will continue through 2054. The Company expects the annual minimum licensing fee to be approximately $2 million. The purchase commitments also include the minimum licensing fee to be paid to Meredith which began in 2009 and continue through 2057. The annual minimum fee began at $0.5 million in 2009 and increases to $4 million by 2014 and generally remains the same thereafter.
(l) On April 26, 2007, the Company established a $500 million standby irrevocable letter of credit for the benefit of Avis Budget Group Inc. in accordance with the Separation and Distribution Agreement. 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 backstops 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 reflect the then current estimate of Cendant contingent and other liabilities. On August 11, 2009, the letter of credit with Avis Budget Group Inc. was reduced from $500 million to $446 million primarily as a result of a reduction in contingent legal liabilities. In late 2010, the Company further reduced the letter of credit from $446 million to $123 million due to the IRS tax settlement and other liability adjustments. This letter of credit is not included in the contractual obligations table above.
(m) The contractual obligations table does not include the annual Apollo management fee which is equal to the greater of $15 million or 2% of Adjusted EBITDA and does not include other non-current liabilities such as pension liabilities of $49 million and unrecognized tax benefits of $34 million as the Company is not able to estimate the year in which these liabilities will be paid.

Potential Debt Purchases or Sales

Our affiliates have purchased a portion of our indebtedness and we or our affiliates from time to time may sell such indebtedness or purchase additional portions of our indebtedness. Any such future purchases or sales 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 with third party owners.

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 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. Presented below are those accounting policies that we believe require subjective and complex judgments that could potentially affect reported results. However, the majority of our businesses operate in environments where we are paid a fee for a service performed, and therefore the results of the majority of our recurring operations are recorded in our financial statements using accounting policies that are not particularly subjective, nor complex.

 

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Allowance for doubtful accounts

We estimate the allowance necessary to provide for uncollectible accounts receivable. The estimate is based on historical experience, combined with a review of current developments, and includes specific accounts for which payment has become unlikely. The process by which we calculate the allowance begins in the individual business units where specific problem accounts are identified and reserved and an additional reserve is recorded driven by the age profile of the receivables. Our allowance for doubtful accounts was $67 million and $66 million at December 31, 2010 and 2009, respectively.

Impairment of goodwill and other indefinite-lived intangible assets

With regard to the goodwill and other indefinite-lived intangible assets recorded in connection with business combinations, we annually, or more frequently if circumstances indicate impairment may have occurred, analyze their carrying values to determine if an impairment exists. In performing this analysis, we are required to make an assessment of fair value for our goodwill and other indefinite-lived intangible assets. We determine the fair value of our reporting units utilizing our best estimate of future revenues, operating expenses, cash flows, market and general economic conditions as well as assumptions that we believe marketplace participants would utilize including discount rates, cost of capital, and long term growth rates. Although we believe our assumptions are reasonable, actual results may vary significantly. A change in these underlying assumptions could cause a change in the results of the tests and, as such, could cause the fair value to be less than the respective carrying amount. In such an event, we would be required to record a charge, which would impact earnings.

The aggregate carrying value of our goodwill and other indefinite-lived intangible assets was $2,611 million and $1,887 million, respectively, at December 31, 2010. It is difficult to quantify the impact of an adverse change in financial results and related cash flows, as certain changes may be isolated to one of our four reporting units or spread across our entire organization. Based upon the impairment analysis performed in the fourth quarter of 2010, there was no impairment for 2010. Management did evaluate the effect of lowering the estimated fair value for each of the reporting units by 10% and determined that no impairment of goodwill would have been recognized under this evaluation.

Income taxes

We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities. We regularly review our deferred tax balances to assess their potential realization and establish a valuation allowance for amounts that we believe will not be ultimately realized. In performing this review, we make estimates and assumptions regarding projected future taxable income, the expected timing of the reversals of existing temporary differences and the identification of tax planning strategies. A change in these assumptions could cause an increase or decrease to our valuation allowance resulting in an increase or decrease in our effective tax rate, which could materially impact our results of operations.

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

 

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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.

In December 2010, the FASB issued guidance to clarify when to perform step two of the goodwill impairment test for reporting units with zero or negative carrying amounts. In certain situation, a reporting unit may have a negative carrying amount, particularly for companies that only have a single reporting unit and have significant debt. In that case, since the first step is passed, the negative carrying amount may shield a potential impairment. The guidance requires that reporting units with a zero or negative carrying value should proceed to step two of the impairment test if there are qualitative factors indicating that it is more likely than not that a goodwill impairment exists. This guidance is effective for all interim and annual reporting periods beginning after December 15, 2010. The Company intends to adopt the guidance beginning January 1, 2011 and does not believe that the adoption will have a significant impact on its consolidated financial statements.

In December 2010, the FASB issued guidance to clarify the disclosure of supplementary pro forma information for business combinations. Current guidance on “Business Combinations” requires disclosure of revenue and earnings of the combined entity as if the acquisition had occurred as of the beginning of both the current period and the comparable prior year reporting period. However, presenting pro forma results as if the acquisition occurred at the beginning of each annual period inappropriately results in certain adjustments, like amortization expense of intangible assets with useful lives of less than two years, being included in the pro forma results of both reporting periods. The new guidance therefore requires the pro forma information to be prepared as if the acquisition occurred as of the beginning of the comparable prior period and is applied prospectively for acquisitions consummated after the beginning of the fiscal year beginning on or after December 15, 2010. The Company intends to adopt the guidance beginning January 1, 2011 and does not believe that the adoption will have a significant impact on its consolidated financial statements.

 

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Item 7A.    Qualitative and Quantitative Disclosures about Market Risk.

Our principal market exposure is interest rate risk. At December 31, 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 generally 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 these are probably the most meaningful analyses, they are constrained by several factors, including the necessity to be conducted 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 December 31, 2010, we had total long-term debt of $6,892 million, excluding $331 million of securitization obligations. Of the $6,892 million of long-term debt, the Company has $3,222 million of variable interest rate debt primarily based on 3-month LIBOR. We have entered into floating to fixed interest rate swap agreements with varying expiration dates with an aggregate notional value of $425 million and effectively fixed our interest rate on that portion of variable interest rate debt. The variable interest rate debt is subject to market rate risk such that our interest payments will fluctuate as underlying interest rates change as a result of market changes. We have determined that the impact of a 100 bps (1% change in the rate) change in LIBOR on our term loan facility variable rate borrowings would affect our interest expense by approximately $28 million. While these results may be used as benchmarks, they should not be viewed as forecasts.

At December 31, 2010, the fair value of our long-term debt approximated $6,697 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% change in market rates would have a $141 million impact on the fair value of our long-term debt, although the amount owed cannot exceed the par value of our debt.

 

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Item 8. Financial Statements and Supplementary Data.

See “Index to Financial Statements” on page F-1.

 

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

 

Item 9A(T). Controls and Procedures.

 

  (a) We maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our filings under the Exchange Act, is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC. 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 our Chief Executive Officer and 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 Annual Report on Form 10-K, 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, our 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 Annual Report on Form 10-K that has materially affected, or is reasonable likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Realogy’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Realogy’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Realogy’s internal control over financial reporting includes those policies and procedures that:

 

  (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of Realogy’s assets;

 

  (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of Realogy’s management and directors; and

 

  (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Realogy’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

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Management assessed the effectiveness of Realogy’s internal control over financial reporting as of December 31, 2010. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its Internal Control-Integrated Framework. Based on this assessment, management determined that Realogy maintained effective internal control over financial reporting as of December 31, 2010.

Auditor Report on the Effectiveness of Realogy’s Internal Control Over Financial Reporting

PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the financial statements included in this Annual Report, has issued an attestation report on the effectiveness of Realogy’s internal control over financial reporting, which is included within their audit opinion on page F-2.

 

Item 9B. Other Information.

We are a wholly-owned subsidiary of Intermediate, which is wholly owned by Holdings. As our sole stockholder, Intermediate, by written consent dated March 1, 2011 pursuant to Section 228(a) of the General Corporation Law of the State of Delaware, approved the reelection of Messrs. Henry R. Silverman, Richard A. Smith, Marc E. Becker, M. Ali Rashid, Scott M. Kleinman and V. Ann Hailey to the Board of Directors of Realogy.

 

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PART III

 

Item 10. Directors, Executive Officers and Corporate Governance.

Executive Officers and Directors

The following table sets forth information regarding individuals who currently serve as our executive officers and directors. The age of each individual in the table below is as of December 31, 2010.

 

Name

   Age     

Position(s)

Henry R. Silverman

     70       Non-Executive Chairman of the Board

Richard A. Smith

     57       President and Chief Executive Officer

Anthony E. Hull

     52       Executive Vice President, Chief Financial Officer and Treasurer

Marilyn J. Wasser

     55       Executive Vice President, General Counsel and Corporate Secretary

David J. Weaving

     44       Executive Vice President and Chief Administrative Officer

Kevin J. Kelleher

     56       President and Chief Executive Officer, Cartus Corporation

Alexander E. Perriello, III

     63       President and Chief Executive Officer, Realogy Franchise Group

Bruce Zipf

     54       President and Chief Executive Officer, NRT LLC

Donald J. Casey

     49       President and Chief Executive Officer, Title Resource Group

Dea Benson

     55       Senior Vice President, Chief Accounting Officer and Controller

Marc E. Becker

     38       Director

V. Ann Hailey

     59       Director

Scott M. Kleinman

     37       Director

M. Ali Rashid

     34       Director

Henry R. Silverman has served as our Non-Executive Chairman of the Board since November 2007 and from February 2009 to February 2011, he served as Chief Operating Officer of Apollo Global Management, LLC. Mr. Silverman serves as a director and Vice Chairman of the Board, and a member of the Executive Committee of the manager, of Apollo Global Management, LLC. From November 2007 until February 2009, Mr. Silverman served as a consultant to Apollo. He served as our Chairman of the Board, Chief Executive Officer and a director since our separation from Cendant in July 2006 until November 13, 2007. Mr. Silverman was Chief Executive Officer and a director of Cendant from December 1997 until the completion of Cendant’s separation plan in August 2006, as well as Chairman of the Board of Directors and the Executive Committee from July 1998 until August 2006. Mr. Silverman was President of Cendant from December 1997 until October 2004. Mr. Silverman was Chairman of the Board, Chairman of the Executive Committee and Chief Executive Officer of HFS Incorporated from May 1990 until December 1997. Mr. Silverman also serves as a director and Chairman of the Board of Apollo Commercial Real Estate Finance, Inc. and serves as a director of the general partner of AP Alternative Assets, L. P. Mr. Silverman serves on the Board of Commissioners of the Port Authority of New York and New Jersey and as a trustee of NYU Langone Medical Center.

Richard A. Smith has served as our President and Chief Executive Officer since November 13, 2007, and has served as a director since our separation from Cendant in July 2006 and as a member of our Executive Committee since its formation in August 2009. Prior to November 13, 2007, he served as our Vice Chairman of the Board and President. Mr. Smith was Senior Executive Vice President of Cendant from September 1998 until our separation from Cendant in July 2006 and Chairman and Chief Executive Officer of Cendant’s Real Estate Services Division from December 1997 until our separation from Cendant in July 2006. Mr. Smith was President of the Real Estate Division of HFS from October 1996 to December 1997 and Executive Vice President of Operations for HFS from February 1992 to October 1996.

Anthony E. Hull has served as our Executive Vice President, Chief Financial Officer and Treasurer since our separation from Cendant in July 2006. From December 14, 2007 to February 3, 2008, Mr. Hull performed the functions of our Chief Accounting Officer. Mr. Hull was Executive Vice President, Finance of Cendant from October 2003 until our separation from Cendant in July 2006. From January 1996 to September 2003, Mr. Hull served as Chief Financial Officer for DreamWorks, a diversified entertainment company. From 1990 to 1994,

 

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Mr. Hull worked in various capacities for Paramount Communications, a diversified entertainment and publishing company. From 1984 to 1990, Mr. Hull worked in investment banking at Morgan Stanley.

Marilyn J. Wasser has served as our Executive Vice President, General Counsel and Corporate Secretary since May 10, 2007. From May 2005 until May 2007, Ms. Wasser was Executive Vice President, General Counsel and Corporate Secretary for Telcordia Technologies, a provider of telecommunications software and services. In this capacity, she was responsible for corporate-wide legal and compliance matters and served as a member of the corporate leadership team. From 1983 until 2005, Ms. Wasser served in several positions of increasing responsibility with AT&T Corporation and AT&T Wireless Services. Most recently, from September 2002 to February 2005, Ms. Wasser served as Executive Vice President, Associate General Counsel and Corporate Secretary for AT&T Wireless Services. There, she had responsibility for all legal matters pertaining to corporate, securities, finance, M&A and strategy matters. From 1995 until 2002, Ms. Wasser served as Secretary to the AT&T Board of Directors and Chief Compliance Officer.

David J. Weaving has served as our Executive Vice President and Chief Administrative Officer since our separation from Cendant in July 2006. Mr. Weaving was Senior Vice President and Chief Financial Officer of Cendant’s Real Estate Division from September 2001 until our separation from Cendant in July 2006. From May 2001 through September 2001, he served as Vice President and Divisional Controller for Cendant’s Real Estate Division. Mr. Weaving joined Cendant in 1999 as a Vice President of Finance. From 1995 to 1999, Mr. Weaving worked in increasing roles of responsibility for Cambrex Corporation, a diversified chemical manufacturer.

Kevin J. Kelleher has served as the President and Chief Executive Officer of Cartus (formerly known as Cendant Mobility Services Corporation) since 1997. From 1993 to 1997, he served as Senior Vice President and General Manager of Cendant Mobility’s destination services unit. Mr. Kelleher has also held senior leadership positions in sales, client relations, network management and strategic planning.

Alexander E. Perriello, III has served as the President and Chief Executive Officer of Realogy Franchise Group (formerly known as Cendant Real Estate Franchise Group) since April 2004. From 1997 through 2004, he served as President and Chief Executive Officer of Coldwell Banker Real Estate Corporation.

Bruce Zipf has served as President and Chief Executive Officer of NRT LLC since March 2005 and as President and Chief Operating Officer from February 2004 to March 2005. From January 2003 to February 2004, Mr. Zipf served as Executive Vice President and Chief Administrative Officer of NRT and from 1998 through December 2002 he served as NRT’s Senior Vice President for most of NRT’s Eastern Operations. From 1996 to 1998, Mr. Zipf served as President and Chief Operating Officer for Coldwell Banker Residential Brokerage—New York. Prior to entering the real estate industry, Mr. Zipf was a senior audit manager for Ernst and Young.

Donald J. Casey has served as the President and Chief Executive Officer of TRG (formerly known as Cendant Settlement Services Group) since April 2002. From 1995 until April 2002, he served as Senior Vice President, Brands of PHH Mortgage. From 1993 to 1995, Mr. Casey served as Vice President, Government Operations of Cendant Mortgage. From 1989 to 1993, Mr. Casey served as a secondary marketing analyst for PHH Mortgage Services (prior to its acquisition by Cendant).

Dea Benson has served as our Senior Vice President, Chief Accounting Officer and Controller since February 2008. Prior to being named Chief Accounting Officer of the Company, Ms. Benson served from September 2007 to January 2008 as Chief Accounting Officer of Genius Products, Inc., the managing member and minority owner of Genius Products, LLC, an independent home entertainment distributor. For more than 11 years prior thereto, Ms. Benson held various financial and accounting positions with DreamWorks SKG/Paramount Pictures, most recently from November 2002 to January 2006 as Controller of DreamWorks SKG and from February 2006 to December 2006 as divisional CFO of the Worldwide Home Entertainment division of Paramount Pictures, subsequent to Paramount’s acquisition of DreamWorks SKG. Prior to joining Realogy, Ms. Benson gained broad-based experience in financial and accounting management, including financial and

 

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strategic planning, internal and external financial reporting, budgeting, oversight of internal controls and treasury operations, and transactional experience, including initial public offerings, acquisitions and divestitures. Ms. Benson is a certified public accountant.

Marc E. Becker has served as a director since April 2007, as a member of our Audit Committee since February 2008, and as Chair of our Compensation Committee and Executive Committee since February 2008 and August 2009, respectively. Mr. Becker is a partner of Apollo. He has been employed by Apollo since 1996. Prior to that time, Mr. Becker was employed by Smith Barney Inc. within its Investment Banking division. Mr. Becker also serves on the boards of directors of Affinion Group, Inc., Quality Distribution, Inc., Vantium Capital, SOURCECORP, Evertec Inc. and WMC Residco. During the past five years, Mr. Becker has also served as a director of Countrywide plc (from May 2007 to February 2009), National Financial Partners (from January 1999 to May 2007) and Metals USA, Inc. (from November 2005 to December 2007) and Metals USA Holdings Corp. (from May 2005 to December 2007).

V. Ann Hailey has served as a director and Chair of our Audit Committee since February 2008. From January 2009 to January 2010, Ms. Hailey served as Chief Financial Officer of Gilt Groupe, Inc., an internet retailer of discounted luxury goods. Ms. Hailey had served as Executive Vice President of Limited Brands, Inc. from August 1997 to September 2007, first having served as EVP, Chief Financial Officer from August 1997 until April 2006 and then serving as EVP, Corporate Development until September 2007. She also served as a member of the Limited Brands, Inc. Board of Directors from 2001 to 2006. From 2004 to 2008, she served as Director of the Federal Reserve Bank of Cleveland and was Chair of its Audit Committee from 2006 through 2008. Ms. Hailey is currently a Director of W.W. Grainger, Inc. and serves as a member of its Audit Committee and Board Affairs and Nominating Committee. Ms. Hailey also serves as a Director of Avon, Inc. and as a member of its Audit Committee.

Scott M. Kleinman has served as a director since April 2007. Mr. Kleinman is a partner of Apollo. He has been employed by Apollo since 1996. Prior to that time, Mr. Kleinman was employed by Smith Barney Inc. in its Investment Banking division. Mr. Kleinman also serves on the boards of directors of Momentive Performance Materials Inc., Verso Paper Holdings LLC, Verso Paper Corp., Noranda Aluminum Holdings Corporation and LyondellBasell Industries, N.V. Mr. Kleinman served as a director of Hexion Specialty Chemicals, Inc. (now known as Momentive Specialty Chemicals, Inc.) from August 2004 to October 2010.

M . Ali Rashid has served as a director since April 2007 and as a member of our Audit Committee, Compensation Committee and Executive Committee since February 2008, February 2008 and August 2009, respectively. Mr. Rashid is a partner of Apollo. He has been employed by Apollo since 2000. From 1998 to 2000, Mr. Rashid was employed by the Goldman Sachs Group, Inc. in the Financial Institutions Group of its Investment Banking Division. He is also a director of Metals USA, Inc., Metals USA Holdings Corp., Noranda Aluminum Holding Corporation and Quality Distribution, Inc. During the past five years, Mr. Rashid has also served as a director of Countrywide plc (from May 2007 to February 2009).

Under the terms of his employment agreement executed on April 10, 2007, the date of the Merger, Mr. Smith serves as a member of the Board of Directors of Realogy during his five-year employment term.

The composition of the Board of Directors and the identity of the executive officers of Holdings and Intermediate are identical to those of Realogy. See “Item 13—Certain Relationships and Related Transactions, and Director Independence” for a summary of the following:

 

   

the Apollo Securityholders Agreement, the Co-Investment Agreement and the Management Investor Rights Agreement, under which Apollo has the right, among other things, to designate members to the Board of Directors of Holdings; and

 

   

the Securityholders Agreement with Paulson, under which Paulson has the right, among other things, to either nominate a member of, or designate a non-voting observer to attend all meetings of, the Board of Directors of Holdings.

 

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Each current director brings a strong and unique background and set of skills to the Board of Directors, giving the Board as a whole competence and experience in a wide variety of areas, including corporate governance and board service, executive management, real estate industry experience, accounting and finance, and risk assessment. Set forth below is a brief description of certain experience, qualifications, attributes or skills of each director that led the Board to conclude that such person should serve as a director of Realogy:

 

   

Mr. Silverman served as our Chief Executive Officer from our separation from Cendant in July 2006 to November 2007, when he retired from that role in accordance with a CEO succession plan established upon Realogy’s separation from Cendant. As part of the succession plan, he became our Non-Executive Chairman of the Board. He has significant experience in our business, having been its Chief Executive Officer, and also having been the Chairman and Chief Executive Officer of Cendant during the period in which our business was conducted as the Real Estate Services Division of Cendant. Mr. Silverman is also the Vice Chairman of Apollo Global Management, LLC, the parent company of our private equity sponsor, Apollo, which beneficially owns 98.7% of the outstanding common stock of Holdings.

 

   

Mr. Smith has served as our Chief Executive Officer and President since November 2007 and prior thereto as our President and for nearly a decade prior to our separation from Cendant served as the Chairman and Chief Executive Officer of the Cendant Real Estate Division. His current responsibilities as Chief Executive Officer and his leadership as President prior thereto and as the head of our business while it was a part of Cendant make him well qualified to serve on our Board.

 

   

Messrs. Becker and Rashid are affiliated with Apollo, have significant experience making and managing private equity investments on behalf of Apollo and led the Apollo diligence team for the Realogy acquisition. They have been intimately involved in the management of the Company since the acquisition date.

 

   

Mr. Kleinman is also affiliated with Apollo. He has significant experience making and managing private equity investments on behalf of Apollo and his experience with Realogy dates back to 1997-2002 when Apollo and Cendant were partners in the ownership and operation of the NRT (our company-owned brokerage) business prior to Cendant acquiring full ownership of that business.

 

   

Ms. Hailey has served as Chief Financial Officer of both a multi-billion dollar public company and a privately held company. In addition to varied career experiences in finance in multiple complex consumer packaged goods companies (PepsiCo from 1977 to 1989, Pillsbury from 1994 to 1997, and Nabisco from 1992 to 1994), Ms. Hailey has held positions in marketing, human resources, and business development including service as executive vice president, corporate development at Limited Brands, Inc., a multi-billion dollar consumer products company. Ms. Hailey possesses broad expertise in strategic planning and branding and marketing as well as recent experience in e-commerce. She also serves on the Board and audit committee of two public companies.

Committees of the Board

The Company has an Executive Committee and an Audit Committee, and Holdings has a Compensation Committee that has authority with respect to compensation matters of the Company.

Executive Committee. In August 2009, the Company established an Executive Committee of the Board, consisting of Mr. Becker (Chair) and Messrs. Smith and Rashid. Our Executive Committee generally may exercise all of the powers of our Board when the Board is not in session other than (1) the submission to stockholders of any action requiring approval of the stockholders, (2) the creation or filling of vacancies on the Board, (3) the adoption, amendment or repeal of the by-laws, (4) the amendment or repeal of any resolution of the Board that by its terms limits amendment or repeal exclusively to the Board, (5) action on matters committed by the by-laws or resolution of the Board exclusively to another committee of the Board, (6) any action where the certificate of incorporation, by-laws, applicable law or contract requires participation by the full Board, (7) the issuance of debt or equity securities in excess of $100 million, and (8) the repurchase by the Company of any of its outstanding debt or equity securities.

 

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Compensation Committee. In February 2008, the Holdings Board established a Compensation Committee whose members consist of Mr. Becker (Chair) and Mr. Rashid. The purpose of the Compensation Committee is to:

 

   

oversee management compensation policies and practices of Holdings and its subsidiaries, including Realogy, including, without limitation, (i) determining and approving the compensation of the Chief Executive Officer and the other executive officers of Holdings and its subsidiaries, including Realogy, (ii) reviewing and approving management incentive policies and programs and exercising any applicable rule-making authority or discretion in the administration of such programs, and (iii) reviewing and approving equity compensation programs for employees, and exercising any applicable rule-making authority or discretion in the administration of such programs;

 

   

set and review the compensation of and reimbursement policies for members of the Board of Directors of Holdings, Intermediate and Realogy;

 

   

provide oversight concerning selection of officers, management succession planning, expense accounts and severance plans and policies of Holdings, Intermediate and Realogy; and

 

   

prepare an annual compensation committee report, provide regular reports to the Holdings and Realogy Boards, and take such other actions as are necessary and consistent with the governing law and the organizational documents of Holdings.

Audit Committee. In February 2008, the Realogy Board of Directors established an Audit Committee, whose members consist of V. Ann Hailey (Chair) and Messrs. Becker and Rashid. The Company is not required to comply with the independence criteria set forth in Rule 10A-3(b)(1) under the Exchange Act as it is not a “listed company” with a class of securities registered under Section 12 of the Exchange Act. Nevertheless, Ms. Hailey, our Audit Committee Chair, satisfies the requirements of independence under that Rule and would also be deemed independent under Section 303A.01 and 303A.06 of the New York Stock Exchange Listing Manual. In addition, the Realogy Board has determined that Ms. Hailey is an “audit committee financial expert” as that term is defined under the Rules of the SEC.

The purpose of the Audit Committee is to assist the Board in fulfilling its responsibility to oversee management regarding:

 

   

Realogy’s systems of internal control over financial reporting and disclosure controls and procedures;

 

   

the integrity of Realogy’s financial statements;

 

   

the qualifications, engagement, compensation, independence and performance of Realogy’s independent auditors, their conduct of the annual audit of the Company’s financial statements and their engagement to provide any other services;

 

   

Realogy’s compliance with legal and regulatory requirements;

 

   

review of material related party transactions; and

 

   

compliance with, adequacy of, and any requests for written waivers sought with respect to any executive officer or director under, Realogy’s code(s) of conduct and ethics.

Code of Ethics

The Board has adopted a code of ethics (the “Code of Conduct”) that applies to all officers and employees, including the Company’s principal executive officer, principal financial officer and principal accounting officer. The Code of Conduct is available in the Ethics For Employees section of the Company’s website at www.realogy.com . The purpose of the Code of Conduct is to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; to promote full, fair, accurate, timely and understandable disclosure in periodic reports required to be filed by the Company; and to promote compliance with all applicable rules and regulations that apply to the Company and its officers.

 

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Item 11. Executive Compensation.

Compensation Discussion and Analysis (all amounts in this section are in actual dollars unless otherwise noted)

Company Background. Realogy became an independent, publicly traded company on the New York Stock Exchange on August 1, 2006 following its separation from Cendant pursuant to its plan of separation. In December 2006, Realogy entered into a merger agreement with affiliates of Apollo and the Merger was consummated on April 10, 2007. Shortly prior to the consummation of the Merger, Apollo, principally through the Holdings Board of Directors (the “Holdings Board”), whose members then consisted of Apollo’s representatives, Messrs. Marc Becker and M. Ali Rashid, negotiated employment agreements and other arrangements with our named executive officers. (Mr. Silverman, our Chief Executive Officer at the effective time of the Merger, did not enter into an employment agreement.)

The named executive officers who entered into these employment agreements were Richard A. Smith, our President, and, effective November 13, 2007, our Chief Executive Officer; Anthony E. Hull, our Executive Vice President, Chief Financial Officer and Treasurer; Kevin J. Kelleher, President and Chief Executive Officer of Cartus; Alexander E. Perriello, III, President and Chief Executive Officer of Realogy Franchise Group; and Bruce Zipf, President and Chief Executive Officer of NRT LLC. The Realogy Board has determined that these officers are named executive officers based upon their duties and responsibilities insofar as they are our Chief Executive Officer, our Chief Financial Officer, and our three most highly compensated executive officers other than our Chief Executive Officer and Chief Financial Officer. This Compensation Discussion and Analysis describes, among other things, the compensation objectives and the elements of our executive compensation program as embodied by the employment agreements, which remain the core of our executive compensation program.

In February 2008, the Holdings Board established the Compensation Committee. The Compensation Committee has the power and authority to oversee the compensation policies and programs of Holdings and Realogy and makes all compensation related decisions relating to our named executive officers based upon recommendations from our Chief Executive Officer.

During 2010 and early 2011, the basic elements of compensation for our Chief Executive Officer and our other named executive officers were modified in an effort to add incentives to these key executives to retain their services, through an employee option exchange offer consummated in November 2010, the adoption of a 2011-2012 multi-year retention program which provides for enhanced retention payments from prior retention programs, and the adoption of a phantom value plan in January 2011.

Compensation Philosophy and Objectives. Our primary objective with respect to executive compensation is to design and implement compensation policies and programs that efficiently and effectively provide incentives to, and motivate, officers and key employees to increase their efforts towards creating and maximizing stockholder value. In connection with the Merger, the Holdings Board developed an executive compensation program designed to reward the achievement of specific annual and long-term Company goals, and which aligns the executives’ interests with those of our stockholders by rewarding performance above established goals, with the ultimate objective of improving stockholder value. The Compensation Committee evaluates both performance and compensation to ensure that we maintain our ability to attract and retain superior employees in key positions and that compensation to key employees remains competitive relative to the compensation paid by similar sized companies. We do not rely on peer compensation information in the residential real estate services industry as most of these companies are privately held and therefore it is difficult for us to obtain this information. We do, however, rely on executive compensation survey data on market comparables. The market comparables have been based principally on service oriented companies of similar revenue and employee size. The Compensation Committee believes executive compensation packages provided by us to our executives, including our named executive officers, should include both cash and stock-based compensation that reward performance as measured against established goals. There is no formulaic approach using the executive

 

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compensation survey data on market comparables in determining the amount of total compensation to each named executive officer. Each element of compensation is determined on a subjective basis using various factors at the Compensation Committee’s sole discretion. The Compensation Committee has not engaged any compensation consultants to participate in the determination or recommendation of the amount or form of these executive compensation packages.

In negotiating the initial employment agreements and arrangements with our named executive officers, Apollo (acting through the Holdings Board) placed significant emphasis on aligning management’s interests with those of Apollo. Our named executive officers made significant equity investments in Holdings common stock upon consummation of the Merger and received equity awards that included performance vesting options that would vest upon Apollo and its co-investors receiving reasonable rates of return on its invested capital in Holdings. Other elements of compensation, such as base salary, cash-based incentive compensation, perquisites and benefits remained substantially unchanged post-Merger from the arrangements that had been put in place prior to consummation of the Merger with the exception of greater emphasis on retention plans as a means to retain our key executives.

Role of Executive Officers in Compensation Decisions. Mr. Richard Smith, our President and Chief Executive Officer, periodically reviews the performance of each of our named executive officers (other than his own performance), and Mr. Smith’s performance is periodically reviewed by the Compensation Committee. The conclusions reached and recommendations based upon these reviews, including with respect to salary adjustment and annual incentive award target and actual payout amounts, are presented to the Compensation Committee, which has the discretion to modify any recommended adjustments or awards to our executives. The Compensation Committee has final approval over all compensation decisions for our named executive officers, including approval of recommendations regarding cash and equity awards to all of our officers. The Chief Administrative Officer participates in the data analysis process.

Setting Executive Compensation. Based on the foregoing objectives, the Holdings Board structured our annual and long-term incentive cash and stock-based executive compensation programs to motivate our executives to achieve the business goals set by us and to reward our executives for achieving these goals.

During 2010 and early 2011, the Compensation Committee structured the executive compensation payable to our named executive officers in a manner to provide them with increased incentives:

 

   

In November 2010, the Compensation Committee approved the 2011-2012 Multi-Year Executive Retention Plan described below.

 

   

Recognizing that the value of the Holdings common stock was significantly below the $10.00 exercise price of the options and the $10.00 purchase price for shares purchased by management upon consummation of the Merger, the Holdings Board approved an employee option exchange offer, as described more fully below, consummated in November 2010, and approved a Phantom Value Plan, as described more fully below, for the Chief Executive Officer, the other named executive officers and the Chief Executive Officer’s three other direct reports.

Executive Compensation Elements. The principal components of compensation for our named executive officers are: base salary; bonus; phantom value plans; management stock option awards; management equity investments; management restricted stock awards; retention programs; and other benefits and perquisites.

Base Salary. We provide our named executive officers and other employees with base salary to compensate them for services rendered during the fiscal year. Base salary ranges for our named executive officers are determined for each executive based on his or her position, scope of responsibility and contribution to our earnings. The initial base salary for our named executive officers was established in their employment agreements entered into upon consummation of the Merger and generally equaled the base salary that the named executive officers had been paid at the time of Realogy’s separation from Cendant in 2006.

 

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Salary levels are generally reviewed annually as part of our performance review process as well as upon a promotion or other material change in job responsibility. Merit based increases to salaries of the executives, including our named executive officers, are based on the Compensation Committee’s assessment of individual performance taking into account recommendations from Mr. Smith. In reviewing base salaries for executives, the Compensation Committee considers primarily an internal review of the executive’s compensation, individually and relative to other officers, and the individual performance of the executive, but does not assign a weight to each criterion when setting base salaries. The Compensation Committee also considers outside survey data and analysis on market comparables. The Compensation Committee considers the extent to which the proposed overall operating budget for the upcoming year (which is approved by the Board) contemplates salary increases. Any base salary adjustment is generally made by the Compensation Committee subjectively based upon the foregoing.

Given the continued challenging real estate market, the Compensation Committee elected to keep the salaries of the named executive officers constant in 2010 maintaining the levels last adjusted in 2007.

Bonus. Our named executive officers generally participate in an annual incentive compensation program (“Bonus Program”) with performance objectives established by the Compensation Committee and communicated to our named executive officers generally within 90 days following the beginning of the calendar year. Under their respective employment agreements, the target annual bonus payable to our named executive officers is 100% of annual base salary, or, in Mr. Smith’s case, given his overall greater responsibilities for the performance of the Company, 200% of annual base salary.

On February 10, 2010, the Compensation Committee approved the bonus structure for 2010 under the Realogy 2010 Executive Annual Bonus Plan (the “2010 Bonus Plan”) applicable to Mr. Smith and his direct reports, including all other named executive officers. The performance criteria under the 2010 Bonus Plan was based on consolidated and business unit EBITDA—or earnings before interest, taxes, depreciation and amortization (as that term is defined in the 2010 Bonus Plan). The bonus opportunity for Mr. Smith and Mr. Hull was based upon consolidated EBITDA results. The bonus opportunity for our other named executive officers (Messrs. Kelleher, Perriello and Zipf) was based upon our consolidated EBITDA results (weighted 50%) and EBITDA results of their respective business units (weighted 50%). Pre-established EBITDA performance levels have been set that, if achieved, would have produced bonus payouts under the 2010 Bonus Plan at 75%, 100%, 125% or 150% of the target annual bonus amounts, respectively. Where performance levels fall between minimum and target or between target and maximum levels, bonuses would have been be determined by linear interpolation. Our consolidated EBITDA threshold has to be achieved before any named executive officer may qualify for a bonus. In November 2010, in determining that an enhanced retention program would provide the Company with greater retention value, the Compensation Committee adopted the 2011-2012 Multi-Year Retention Plan and terminated the 2010 Bonus Plan. The Company does not expect to adopt a 2011 Bonus Plan covering the named executive officers or other key personnel principally within its Corporate Services unit or the corporate offices of Realogy’s four business units.

Mr. Smith is entitled to an additional annual bonus, the after-tax proceeds of which are required to be used to purchase the annual premium on an existing life insurance policy. This benefit is provided to Mr. Smith as the replacement of a benefit previously provided to him by Cendant. Mr. Smith waived his contractual right to receive this bonus with respect to the bonuses payable in January 2009 and 2010 in order to reduce Company expense, but did receive this bonus in January 2011 in the amount of $97,000.

Retention Plans. In November 2009, several months after the Company disclosed that it had terminated discussions with certain bondholders with respect to a debt for equity transaction that would have resulted in a recapitalization of the Company, and in light of the continued deterioration of the residential housing market for most of 2009, the Compensation Committee approved the 2009 Multi-Year Executive Retention Plan. The Compensation Committee amended and restated this plan in January 2010. The Amended and Restated 2009 Multi-Year Executive Retention Plan provided for a retention payment equal to 160% (increased from 150% as

 

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initially adopted in November 2009) of the named executive officer’s target annual bonus, payable in two equal installments on or about July 1, 2010 and September 1, 2011, subject to the executive’s continued employment with Realogy. The 2011 payment is subject to dollar-for-dollar reduction if the named executive officer receives a bonus payment under the 2010 Bonus Plan (payable in 2011). At the recommendation of Mr. Smith, the Compensation Committee did not include Mr. Smith as a participant in the Retention Plan. In July 2010, the named executive officers (other than Mr. Smith) received the first of the two equal installments payable under the 2009 Multi-Year Executive Retention Plan.

In November 2010, the Compensation Committee approved the 2011-2012 Multi-Year Retention Plan. The 2011-2012 Multi-Year Retention Plan provides for a retention payment equal to 200% of each of the named executive officer’s target annual bonus, payable in four equal installments in April and October of each of 2011 and 2012, subject to the executive’s continued employment with Realogy. The Compensation Committee took such action to provide greater retention value to Realogy with respect to such key personnel, particularly given the continuing uncertainty regarding company performance over the near term, which is largely influenced by macro-economic factors beyond management’s control, including continuing high unemployment, uncertainty about housing values, and the inability of the 2009 and 2010 federal homebuyer tax credits to fuel a sustained housing recovery. In connection with the adoption of the 2011-2012 Multi-Year Retention Plan, the Compensation Committee terminated the 2009 Multi-Year Executive Retention Plan, thereby eliminating payment of a second installment thereunder in 2011.

Management Equity Investments. Pursuant to individual subscription agreements dated April 20, 2007, the named executive officers and certain other members of management made equity investments in Holdings through the purchase of Holdings common stock. Our named executive officers purchased an aggregate of 1,550,000 shares at $10.00 per share for an aggregate investment of $15,500,000.

Management Stock Option and Restricted Stock Awards. The Holdings Board approved our equity incentive program, including its design and the value of awards granted to our officers and key employees. Equity awards were made to our named executive officers on April 10, 2007, upon consummation of the Merger. Our named executive officers were awarded options to purchase an aggregate of 5,812,500 shares of Holdings common stock at an exercise price of $10.00 per share and received restricted stock awards for an aggregate of 375,000 shares of Holdings common stock. One half of the restricted stock awards vested in October 2008 and the balance vested in April 2010.

The equity investments, stock option and restricted stock awards were structured to incentivize management to generate substantial equity value and to participate with our investors in the increase in our value.

During 2010, the Compensation Committee and the Holdings Board took note that the value of the Holdings common stock was significantly below the $10.00 exercise price of the options and the $10.00 purchase price for shares purchased by management upon consummation of the Merger.

In connection with that review, the Holdings Board approved an employee option exchange offer, which commenced on October 8, 2010, and concluded on November 8, 2010, to offer to our eligible employees the opportunity to exchange all of their respective outstanding options to purchase Holdings common stock for an equal number of new stock options with different terms to be issued following the completion of the exchange offer. Each of the outstanding original options had 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, as of March 1, 2011, 5,094,250 original options remain outstanding (including 5,050,000 original options held by non-employees who were not eligible to participate in the exchange offer).

 

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The new options were issued under the Holdings Stock Incentive 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

   Number 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 and Chief Executive Officer, NRT

     600,000   

For more information on the Holdings Stock Incentive Plan, see “Outstanding Equity Awards at 2010 Fiscal Year End”. Neither the Holdings Board nor the Compensation Committee has adopted any formal policy regarding the timing of any future equity awards.

Phantom Value Plan. On January 5, 2011, the Board of Directors of the Company approved the Realogy Corporation Phantom Value Plan (the “Phantom Value Plan”), which is intended to provide certain participants, including the Company’s Senior Executive Officers, with an incentive to remain in the service of the Company, to increase their interest in the success of the Company and to award them compensation based upon the Company’s success.

Under the Phantom Value Plan, each participant is granted an incentive award (an “Incentive Award”) in three series relating to the three series of Convertible Notes held by Apollo at the date of grant of the Incentive Award (collectively, the “Plan Notes”). Each participant is eligible to receive a payment with respect to his or her Incentive Award at such time and from time to time that Apollo receives cash upon the discharge or third-party sale of not less than $267,638,044 of the aggregate principal amount of all series of Plan Notes (or on any non-cash consideration into which any series of Plan Notes may have been exchanged or converted). The payment with respect to a particular series of an Incentive Award would be an amount which bears the same ratio to the dollar amount of the Incentive Award relating to such series as (i) the aggregate amount of cash received by Apollo upon discharge in whole or in part of the principal amount of a particular series of Plan Notes or upon the sale of all or a portion of the principal amount of a particular series of Plan Notes (or upon the discharge, sale, exchange or transfer of any non-cash consideration into which any such series of Plan Notes may have been exchanged or converted) bears to (ii) the aggregate principal amount of such series of Plan Notes held by Apollo on the date of grant of such Incentive Award. In addition, participants may be eligible to receive additional amounts based upon cash received by Apollo pursuant to the terms of any non-cash consideration into which any such series of Plan Notes may have been exchanged or converted.

In the event that a payment is to be made with respect to an Incentive Award in conjunction with or subsequent to a qualified public offering of common stock of the Company or its direct or indirect parent company, a participant may elect to receive stock in lieu of the cash payment in a number of unrestricted shares of common stock with a fair market value, as determined in good faith by the Compensation Committee, equal to the dollar amount then due on such Incentive Award, plus a number of restricted shares of such common stock

 

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with a fair market value, as determined in good faith by the Compensation Committee, equal to the amount then due multiplied by 0.15. The restricted shares of common stock will vest, based on continued employment, on the first anniversary of issuance. In addition, Incentive Awards will be subject to acceleration and payment upon a change of control as specified in the Phantom Value Plan.

On each date Apollo receives cash interest on the Plan Notes, participants may be granted stock options under the Stock Incentive Plan with an aggregate value (determined on a Black-Scholes basis) equal to an amount which bears the same ratio to the aggregate dollar amount of the participant’s Incentive Award as (i) the aggregate amount of cash interest received by Apollo on such date bears to (ii) the aggregate principal amount of the Plan Notes held by Apollo on the date of grant of the Incentive Award. The stock option grants to Realogy’s CEO, however, would be limited to 50% of the foregoing stock option amount. Generally, each grant of stock options will have a three year vesting schedule, subject to the participant’s continued employment, and vested stock options will become exercisable one year following a qualified public offering. The stock options will have a term of 7.5 years.

Incentive Awards are immediately cancelable and forfeitable in the event of the termination of a participant’s employment for any reason. The Incentive Awards also terminate 10 years following the date of grant.

On January 5, 2011, the Board of Directors of the Company made initial grants of Incentive Awards of approximately $21.8 million to the Senior Executive Officers. The following is a table of the Company’s named executive officers and their respective award amounts:

 

Name

   Series A
Convertible Notes
Incentive Award
     Series B
Convertible Notes
Incentive Award
     Series C
Convertible Notes
Inventive Award
 

Richard A. Smith

   $ 3,292,410       $ 1,833,170       $ 3,994,670   

Anthony E. Hull

   $ 1,018,110       $ 566,870       $ 1,235,270   

Kevin J. Kelleher

   $ 653,659       $ 363,949       $ 793,082   

Alexander E. Perriello, III

   $ 837,610       $ 466,370       $ 1,016,270   

Bruce Zipf

   $ 808,820       $ 450,340       $ 981,340   

The award amount granted to each of the named executive officers was determined by the sum of (1) the shares of Holdings purchased by the participant at $10 per share in April 2007 and (2) the value of the participant’s initial restricted stock grant in April 2007, also ascribing $10 per share to each such share of restricted stock, net of shares forfeited to pay minimum withholding taxes due upon vesting. In adopting the Phantom Value Plan and making the initial grants thereunder to the CEO and his direct reports, including all other named executive officers, the Holdings Board intended to address in part the fact that the market value of the shares initially purchased by the participants and the shares granted in the form of a restricted stock grant in 2007 had lost significant value, and to provide these executives with the opportunity to receive compensation based upon the Company’s success.

Other Benefits and Perquisite Programs. Immediately following our separation from Cendant, executive officers and a number of our key employees, including our named executive officers, participated in programs that provide certain perquisites, including items such as access to Company automobiles for personal use, financial and tax planning, executive medical benefits and physical exams, first-class air travel and in the case of Mr. Smith, access to our aircraft for personal use. These programs were developed by Cendant and were adopted by us upon our separation from Cendant.

Since our separation, we have substantially curtailed these programs in order to reduce operating costs. Specifically, we terminated financial planning perquisites, executive medical benefits and physical exams. Further, the Realogy Compensation Committee adopted a policy in December 2006 that limited use of the

 

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previous corporate-owned aircraft or our current fractional aircraft ownership (only Mr. Smith has access, subject to availability, for personal use and business use is limited to executive officers and subject to further limitations) and management adopted a policy that limits first-class air travel for our employees. During 2010 Mr. Smith reimbursed the Company for all variable costs associated with the personal use of the aircraft in which we have a fractional ownership interest.

Our executive officers, including our named executive officers, may participate in our 401(k) plan and our non-qualified deferred compensation plan. Prior to 2008, these plans provided for a Company matching contribution of 100% of amounts contributed by the officer, subject to a maximum of 6% of eligible compensation—a level that had been established by Cendant and carried over when we separated from Cendant in 2006. In early 2008, in an effort to reduce costs, we temporarily suspended the Company match under our 401(k) plan. The suspension of the Company matching contributions remained in effect until July 2010, when the match was reinstated at an amount equal to 25% of amounts contributed by an officer, subject to a maximum of 6% of eligible compensation. In addition, effective January 1, 2009, the Company suspended participation in the Realogy Officer Deferred Compensation Plan given the plan’s underfunded status. This suspension remains in effect. Mr. Kelleher is our only executive officer that participates in a defined benefit pension plan (future accruals of benefits were frozen on October 31, 1999, though he still accrued service after such date for the purpose of eligibility for early retirement), and this participation relates to his former service with PHH.

Severance Pay and Benefits upon Termination of Employment under Certain Circumstances. The employment agreements entered into with our named executive officers at the effective time of the Merger provide for severance pay and benefits under certain circumstances. The level of the severance pay and benefits is substantially consistent with the level of severance pay and benefits that those named executive officers were entitled to under the agreements they had with Realogy following its separation from Cendant but prior to the consummation of the Merger.

Under our employment agreements with our named executive officers, the severance pay is equal to a multiple of the sum of his or her annual base salary and target bonus, along with the continuation of welfare benefits. Severance pay is payable upon a termination without cause by the Company or a termination for good reason by the executive. The severance multiple for Mr. Smith, as our Chief Executive Officer, is 300%, for Mr. Hull, as our Chief Financial Officer, 200% and for the balance of the named executive officers, 100% (though in the case of such a termination of employment within 12 months following Sale of the Company (as defined in their employment agreements), their multiple is 200%. The higher multiples of base salary and target bonus payable to Messrs. Smith and Hull are based upon Mr. Smith’s overall greater responsibilities for our performance and Mr. Hull’s significant responsibilities as our Chief Financial Officer. Mr. Smith is our only officer who has tax reimbursement protection for “golden parachute excise taxes,” subject to a cutback of up to 10%—a benefit he had under his employment agreement that he entered into at the time of our separation from Cendant.

The agreements also provide for severance pay of 100% of annual base salary and the continuation of welfare benefits to each named executive officer in the event his employment is terminated by reason of death or disability. For more information on the employment agreements, see “Potential Payments upon Termination or Change in Control.”

The Compensation Committee believes the severance pay and benefits payable to our named executive officers under the foregoing circumstances aid in the attraction and retention of these executives as a competitive practice and is balanced by the inclusion of restrictive covenants (such as non-compete provisions) to protect the value of Realogy and Holdings following a termination of an executive’s employment without cause or by the employee for good reason. In addition, we believe the provision of these contractual benefits will keep the executives focused on the operation and management of the business. As set forth above, the enhanced severance pay and benefits payable to Messrs. Kelleher, Perriello and Zipf in the event of a termination of employment under certain circumstances within twelve months of a Sale of the Company are substantially consistent with the contractual rights they had prior to the Merger.

 

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Forfeiture of Awards in the event of Financial Restatement. The Company has not adopted a policy with respect to the forfeiture of equity incentive awards or bonuses in the event of a restatement of financial results, though each of the employment agreements with the named executive officers includes, within the definition of termination for “cause”, an executive purposefully or negligently making (or being found to have made) a false certification to the Company pertaining to its financial statements.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Realogy Board (and Holdings Board) that the Compensation Discussion and Analysis be included in this Annual Report.

 

DOMUS HOLDINGS CORP.
COMPENSATION COMMITTEE

Marc E. Becker, Chair

M. Ali Rashid

 

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Summary Compensation Table

The following table sets forth the compensation we provided in 2008, 2009 and 2010 to our named executive officers:

 

Name and Principal Position

  Year     Salary
($)
    Bonus
($)
    Stock
Option and
Stock
Appreciation
Rights
Awards ($)
(1)
    Non-Equity
Incentive Plan
Compensation
($) (2)
    Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings

($) (3)
    All Other
Compensation
($)
    Total ($)  

Richard A. Smith

    2010        1,000,000        —          1,005,338        —          —          1,750        2,007,088   

Chief Executive Officer and President

    2009        1,000,000        —          —          —          —          1,858        1,001,858   
    2008        1,000,000        97,000        —          —          —          51,699        1,148,699   

Anthony E. Hull

    2010        525,000        —          242,250        420,000        —          —          1,187,250   

Executive Vice President, Chief Financial Officer And Treasurer

    2009        525,000        —          —          262,500        —          44,817        832,317   
    2008        525,000        —          —          —          —          56,437        581,437   

Kevin J. Kelleher

    2010        416,000        —          193,800        332,800        44,784        —          987,384   

President and Chief Executive Officer of Cartus Corporation

    2009        416,000        —          —          208,000        47,763        39,938        711,701   
    2008        416,000        —          —          —          24,309        20,422        460,731   

Alexander E. Perriello, III

    2010        520,000        —          242,250        416,000        —          —          1,178,250   

President and Chief Executive Officer, Realogy Franchise Group

    2009        520,000        —          —          260,000        —          40,367        820,367   
    2008        520,000        —          —          —          —          29,104        549,104   

Bruce Zipf

    2010        520,000        —          193,800        416,000        —          —          1,129,800   

President and Chief Executive Officer, NRT

    2009        520,000        —          —          260,000        —          39,443        819,443   
    2008        520,000        —          —          —          —          20,722        540,722   

 

(1) Each named executive officer received a grant of Holdings non-qualified stock options in connection with an employee option exchange offer consummated in November 2010. In the employee option exchange offer, eligible employees could exchange their existing options with an exercise price of $10.00 per share, almost all of which had been granted upon consummation of the Merger in April 2007, for an equal number of new options (i.e., on a one-for-one basis) with the new options being exercisable for the same number of shares of Holdings common stock as the options for which they were exchanged. The terms of the New Options are set forth below under “ —Grants of Plan-Based Awards Table for Fiscal Year 2010”. Upon issuance of the 2010 options, the original options were cancelled. The amounts set forth in this column reflect the incremental fair value of the options granted in 2010 in accordance with FASB guidance on stock-based compensation. The assumptions we used in determining the value of these options on the date of grant are described in Note 12, “Stock-Based Compensation” to our consolidated financial statements included elsewhere in this Annual Report.
(2) Amounts for 2010 represent aggregate amount paid to the named executive officer under the 2009 Realogy Multi-Year Executive Retention Plan.
(3) None of our named executive officers (other than Mr. Kelleher) is a participant in any defined benefit pension arrangement. The amounts in this column with respect to 2010 reflect the aggregate change in the actuarial present value of the accumulated benefit under the Realogy Pension Plan from December 31, 2009 to December 31, 2010. See “— Realogy Pension Benefits” for additional information regarding the benefits accrued for Mr. Kelleher and Note 9, “Employee Benefit Plans—Defined Benefit Pension Plan” to our Consolidated Financial Statements included elsewhere in this Annual Report for more information regarding the calculation of our pension costs.

Grants of Plan-Based Awards Table for Fiscal Year 2010

Each of the named executive officers participated in the following non-equity incentive and stock-based compensation plans in 2010. Each of the named executive officers:

 

   

participated in the 2010 Executive Annual Bonus Plan until such plan was terminated by the Compensation Committee in November 2010;

 

   

received stock options in 2010 under the Amended and Restated 2007 Stock Incentive Plan in connection with the employee stock option exchange offering consummated in November 2010; and

 

   

is a participant in the Realogy 2011-2012 Multi-Year Cash Retention Plan adopted in November 2010.

 

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Grants of Plan-Based Awards in Fiscal Year 2010

 

            Estimated future payouts under
non-equity incentive plan awards
     All other
option
awards:
number of
securities
underlying
options
(#) (3)
     Exercise
or base
price of
options
awards
($/Sh) (4)
     Grant date
fair value
of stock
and option
awards
($) (5)
 

Name

   Grant
Date
     Threshold
($) (1)
     Target
($) (1) (2)
     Maximum
($) (1)
          

Richard A. Smith

     2/10/10         1,500,000         2,000,000         3,000,000         —           —           —     
     11/4/10         —           4,000,000         —           —           —           —     
     11/9/10         —           —           —           933,750         5.50         65,363   
     11/9/10         —           —           —           2,178,750         0.83         939,975   

Anthony E. Hull

     2/10/10         393,750         525,000         787,500         —           —           —     
     11/4/10         —           1,050,000         —           —           —           —     
     11/9/10         —           —           —           225,000         5.50         15,750   
     11/9/10         —           —           —           525,000         0.83         226,500   

Kevin J. Kelleher

     2/10/10         312,000         416,000         624,000         —           —           —     
     11/4/10         —           832,000         —           —           —           —     
     11/9/10         —           —           —           180,000         5.50         12,600   
     11/9/10         —           —           —           420,000         0.83         181,200   

Alexander E. Perriello, III

     2/10/10         390,000         520,000         780,000         —           —           —     
     11/4/10         —           1,040,000         —           —           —           —     
     11/9/10         —           —           —           225,000         5.50         15,750   
     11/9/10         —           —           —           525,000         0.83         226,500   

Bruce Zipf

     2/10/10         390,000         520,000         780,000         —           —           —     
     11/4/10         —           1,040,000         —           —           —           —     
     11/9/10         —           —           —           180,000         5.50         12,600   
     11/9/10         —           —           —           420,000         0.83         181,200   

 

(1) The awards made on February 10, 2010 set forth in this column represent the grant made under the 2010 Executive Annual Bonus Plan (the “2010 Bonus Plan”). The 2010 Bonus Plan was subsequently terminated in November 2010. The performance criteria under the 2010 Bonus Plan were consolidated and business unit EBITDA—or earnings before interest, taxes, depreciation and amortization (as that term is defined in the 2010 Bonus Plan). The bonus opportunity for Mr. Smith and Mr. Hull was based upon consolidated EBITDA results. The bonus opportunity for our other named executive officers (Messrs. Kelleher, Perriello and Zipf) was based upon our consolidated EBITDA results (weighted 50%) and EBITDA results of their respective business units (weighted 50%). Pre-established EBITDA performance levels have been set that, if achieved, would have produced bonus payouts under the 2010 Bonus Plan at 75%, 100%, 125% or 150% of the target annual bonus amounts, respectively. Where performance levels fall between minimum and target or between target and maximum levels, bonuses would have been be determined by linear interpolation. Our consolidated EBITDA threshold has to be achieved before any named executive officer may qualify for a bonus.
(2) The awards made on November 4, 2010 set forth in this column represents the aggregate retention payments payable to each of the named executive officers under the Realogy 2011-2012 Multi-Year Retention Plan (the “2011-2012 Retention Plan”). The 2011-2012 Retention Plan provides for retention payments in four equal semi-annual installments during 2011 and 2012 in April and October of each such year, based upon an employee’s continued employment in good standing. 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 2010 Annual Bonus Plan. The Compensation Committee also terminated the Amended and Restated 2009 Multi-Year Executive Retention Plan, which covered all of the named executive officers other than the Chief Executive Officer.
(3)

This column lists the New Options granted in 2010 under Amended and Restated 2007 Stock Incentive Plan in exchange for Original Options that had been granted in April 2007 upon consummation of the Merger. The New Options have the same terms as the Original Options, except as follows: (i) the exercise price of 70% of the New Options is $0.83 per share, and the exercise price of the remaining 30% of the New Options

 

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is $5.50 per share; (ii) 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 (iii) 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 and is not subject to any performance vesting.

(4) The options with an exercise price of $5.50 per share are New Options granted with an exercise price at a premium as determined by the Compensation Committee.
(5) This column represents the incremental fair value, computed as of November 9, 2010, the date on which the option exchange offer was consummated, in accordance with FASB guidance on stock-based compensation.

Outstanding Equity Awards at 2010 Fiscal Year End

The following two tables set forth outstanding stock option awards as of December 31, 2010 held by our named executive officers. There were no other Holdings equity awards outstanding at December 31, 2010.

Outstanding Option Awards at December 31, 2010

 

Name

   Number of
securities
underlying
unexercised
options (#)
exercisable
     Number of
securities
underlying
unexercised
options (#)
unexercisable
     Equity incentive
plan awards:
number of
securities
underlying
unexercised
unearned
options (#)
     Option exercise
price ($) (1)
     Option
expiration
date
 

Richard A. Smith

     —           933,750         —           5.50         11/9/20   
        2,178,750         —           0.83         11/9/20   

Anthony E. Hull

     —           225,000         —           5.50         11/9/20   
        525,000         —           0.83         11/9/20   

Kevin J. Kelleher

     —           180,000         —           5.50         11/9/20   
        420,000         —           0.83         11/9/20   

Alexander E. Perriello III

     —           225,000         —           5.50         11/9/20   
        525,000         —           0.83         11/9/20   

Bruce Zipf

     —           180,000         —           5.50         11/9/20   
        420,000         —           0.83         11/9/20   

 

(1) All options vest as to twenty-five percent (25%) of the total shares subject to the option on each of the first (4) anniversaries of July 1, 2010.

 

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The following table sets forth outstanding equity awards (consisting solely of stock options of Avis Budget Group and Wyndham Worldwide) as of December 31, 2010 held by our named executive officers that were issued (or in the case of Avis Budget Group equity awards, adjusted) as part of the equitable adjustment of outstanding Cendant equity awards at the date of our separation from Cendant made pursuant to the terms of the Separation Agreement. Except for tax withholding and related liabilities, the awards relating to Wyndham Worldwide common stock are liabilities of Wyndham Worldwide, and the awards relating to Avis Budget Group common stock are liabilities of Avis Budget Group. All of these stock options are fully exercisable. Avis Budget Group awards also reflect an adjustment in connection with a one-for-ten reverse stock split.

 

Name

  Issuer   Number of Securities Underlying
Unexercised Options
Exercisable (#)
    Exercise
Price ($)
    Option Expiration
Date
 

Richard A. Smith

  Avis Budget     26,063        27.40        January 22, 2012   
  Wyndham Worldwide     52,124        40.03        January 22, 2012   

Anthony E. Hull

  Avis Budget     988        28.34        October 15, 2013   
  Wyndham Worldwide     1,976        41.40        October 15, 2013   

Kevin J. Kelleher

  Avis Budget     12,009        27.40        January 22, 2012   
  Wyndham Worldwide     24,018        40.03        January 22, 2012   

Alexander E. Perriello, III

  Avis Budget     6,005        27.40        January 22, 2012   
  Wyndham Worldwide     12,009        40.03        January 22, 2012   

Bruce Zipf

  Avis Budget (1)     4,014        26.87        January 2, 2011   
  Avis Budget     5,212        26.87        April 17, 2012   
  Wyndham Worldwide (1)     8,027        39.25        January 2, 2011   
  Wyndham Worldwide     10,424        39.25        April 17, 2012   

 

(1) The Avis Budget Group and Wyndham Worldwide options with an expiration date of January 2, 2011 expired without having been exercised.

Option Exercises and Stock Vested for Fiscal Year 2010

None of our named executive officers exercised any options for Holdings common stock during 2010. The following table sets forth information with respect to shares of restricted stock for Holdings common stock held by our named executive officers that vested during 2010.

 

     Stock awards  

Name

   Number of shares
acquired on
vesting (#) (1)
     Value realized
on vesting

($) (1)
 

Richard A. Smith

     50,000       $ 40,500   

Anthony E. Hull

     50,000       $ 40,500   

Kevin J. Kelleher

     12,500       $ 10,125   

Alexander E. Perriello, III

     25,000       $ 20,250   

Bruce Zipf

     50,000       $ 40,500   

 

(1) Based upon a fair market value share price of $0.81 on April 10, 2010, the date of vesting. Messrs. Perriello and Zipf elected to pay the minimum withholding taxes due upon vesting through the forfeiture of shares. Accordingly, Messrs. Perriello and Zipf actually received fewer shares than the amount set forth in the above table.

 

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The following table includes certain information relating to Wyndham Worldwide options exercised by one of our named executive officers during 2010.

 

     Wyndham Worldwide option award  

Name

   Number of shares
acquired on
exercise (#)
     Value realized
on exercise ($)
 

Richard A. Smith

     208,498       $ 1,317,581   

None of our other named executive officers exercised any Wyndham Worldwide options during 2010 and none of our named executive officers exercised Avis Budget Group options during 2010.

Stock Incentive Plan

The Holdings 2007 Stock Incentive Plan, as amended in November 2007 and further amended in November 2010 (the “Stock Incentive Plan”), authorizes 20 million shares of Holdings common stock thereunder. The Stock Incentive Plan is administered by the Compensation Committee. Awards granted under the Stock Incentive Plan may be nonqualified stock options, rights to purchase shares of Holdings common stock, restricted stock, restricted stock units and other awards settleable in, or based upon, Holdings common stock. Awards may be granted under the Stock Incentive Plan only to persons who are employees, consultants or directors of Holdings or any of its subsidiaries on the date of the grant.

All of the shares of Holdings common stock purchased by management as well as the restricted stock awards and stock options granted to management (including board members) are subject to the Stock Incentive Plan.

Options issued under the Stock Incentive Plan must have an exercise price determined by the Compensation Committee and set forth in an option agreement. In no event, however, may the exercise price be less than the fair market value of a share of Holdings common stock on the date of grant. The Compensation Committee, in its sole discretion, will determine whether and to what extent any options are subject to vesting based upon the optionee’s continued service to, and the Holdings performance of duties for, Holdings and its subsidiaries, or upon any other basis.

In the event of a merger, consolidation, acquisition of property or shares, stock rights offering, liquidation, disaffiliation or similar event affecting Holdings or any of its subsidiaries (each, a “Corporate Transaction”), the Compensation Committee may in its discretion make such substitutions or adjustments as it deems appropriate and equitable to: (a) the aggregate number and kind of share of Holdings common stock or other securities, (b) the number and kind of shares of Holdings common stock 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, (a) the cancellation of outstanding equity securities issued under the Stock Incentive Plan in exchange for payments of cash, property or a combination thereof having an aggregate value equal to the value of such equity securities, as determined by the Compensation Committee in its sole discretion and (b) the substitution of other property (including, without limitation, cash or other securities of Holdings and securities of entities other than Holdings for the shares of Holdings common stock subject to outstanding equity securities. Following the Debt Exchange Offering and the filing of the amended and restated certificate of incorporation of Holdings on January 5, 2011, providing for two classes of Holdings common stock, the Compensation Committee approved action to provide that all shares issuable upon exercise of outstanding options under the Stock Incentive Plan (as well as shares of common stock underlying future grants under that plan) are issuable for shares of Class A Common Stock.

Upon (i) the consummation of certain sales of Holdings or (ii) any transactions or series of related transactions in which Apollo sells at least 50% of the shares of Holdings common stock directly or indirectly

 

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acquired by it and at least 50% of the aggregate of all investor investments (a “Realization Event”), subject to any provisions of the award agreements to the contrary with respect to certain sales of Holdings, Holdings may purchase each outstanding vested and/or unvested option for a per share amount equal to (a) the amount per share received in respect of the shares of Holdings common stock sold in such transaction constituting the Realization Event, less (b) the option price thereof.

The Stock Incentive Plan will terminate on the tenth anniversary of the date of its adoption by the Holdings Board, or April 10, 2017.

Realogy Pension Benefits at 2010 Fiscal Year End

Prior to our separation from Cendant, Cendant sponsored and maintained the Cendant Corporation Pension Plan (the “Cendant Pension Plan”), which was a “defined benefit” employee pension plan subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Cendant Pension Plan was a successor plan to the PHH Corporation Pension Plan (the “Former PHH Pension Plan”) pursuant to a transaction whereby Cendant caused a number of defined benefit pension plans to become consolidated into a single plan. A number of our employees are entitled to benefits under the Cendant Pension Plan pursuant to their prior participation in the Former PHH Pension Plan as well as subsequent participation in the Cendant Pension Plan. During 1999, the Former PHH Pension Plan was frozen and curtailed, other than for certain employees who attained certain age and service requirements.

In connection with our separation, Cendant and Realogy agreed to separate the Cendant Pension Plan into two plans. We adopted a new defined benefit employee pension plan, named the Realogy Corporation Pension Plan, which is identical in all material respects to the Cendant Pension Plan (the “Realogy Pension Plan”). Also effective upon the separation, the Realogy Pension Plan assumed all liabilities and obligations under the Cendant Pension Plan which related to the Former PHH Pension Plan. We also assumed any supplemental pension obligations accrued by any participant of the Cendant Pension Plan which related to the Former PHH Pension Plan. Our employees who were not participants in the Cendant Pension Plan do not participate in the Realogy Pension Plan.

In consideration of the Realogy Pension Plan accepting and assuming the liabilities and obligations described above under the Cendant Pension Plan, Cendant caused the Cendant Pension Plan to make a direct transfer of a portion of its assets to the Realogy Pension Plan. The value of the assets transferred from the Cendant Pension Plan to the Realogy Pension Plan was proportional to the liabilities assumed by the Realogy Pension Plan, and such value was determined based upon applicable law, including under ERISA and IRS regulations.

Of those employees currently participating in the Realogy Pension Plan, 269 are no longer accruing additional benefits (other than their right to attain early retirement subsidies) and two continue to accrue additional benefits.

Mr. Kelleher is our only named executive officer who participates in the Realogy Pension Plan and his participation in the Cendant Pension Plan was frozen on October 31, 1999 and, as of that date, he no longer accrues additional benefits (other than his right to attain early retirement subsidies) under the Cendant Pension Plan or the Realogy Pension Plan.

The following table sets forth information relating to Mr. Kelleher’s participation in the Realogy Pension Plan:

 

Name

   Plan Name      Number of Years of
Credited  Service(#) (1)
   Present Value of
Accumulated  Benefit ($) (2)
   Payments During
Last Fiscal Year  ($)

Kevin J. Kelleher

     Realogy Pension Plan       26    386,354    —  

 

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(1) The number of years of credited service shown in this column is calculated based on the actual years of service with us (or Cendant) for Mr. Kelleher through December 31, 2010.
(2) The valuations included in this column have been calculated as of December 31, 2010 assuming Mr. Kelleher will retire at the normal retirement age of 65 and using the interest rate and other assumptions as described in Note 9, “Employee Benefit Plans—Defined Benefit Pension Plan” to our consolidated financial statements included elsewhere in this Annual Report.

Nonqualified Deferred Compensation at 2010 Fiscal Year End

In December 2008, in accordance with the transition rules under Section 409A of the Internal Revenue Code of 1986, as amended, our Compensation Committee amended the Realogy Officer Deferred Compensation Plan. The amendment permitted participants to revoke their current distribution elections on file and make a new unifying election for their entire account balance. The revocation and election had to be made prior to December 31, 2008. Participants could elect to receive a lump sum distribution in April 2009 or to maintain their then current election. Mr. Hull and Mr. Zipf were the only named executive officers who were participants under the Realogy Officer Deferred Compensation Plan. Each of them made new elections prior to the end of 2008. Under those new elections, they received lump sum distributions in April 2009.

Effective January 1, 2009, the Company suspended participation in the Realogy Officer Deferred Compensation Plan due to the prolonged downturn in the residential housing market and our highly levered debt structure. The suspension remains in effect. Accordingly, none of the named executive officers had any nonqualified deferred compensation at December 31, 2010.

Employment Agreements

The following summarizes the terms of the employment agreements with each of our named executive officers. Severance provisions are described in the section titled “Potential Payments Upon Termination or Change of Control.”

Mr. Smith. On April 10, 2007, we entered into a new employment agreement with Mr. Smith, with a five-year term commencing as of the effective time of the Merger (unless earlier terminated), subject to automatic extension for an additional year unless either party provides notice of non-renewal. This employment agreement supersedes any prior employment agreements that we entered into with Mr. Smith. Pursuant to the agreement, Mr. Smith serves as our President. In addition, Mr. Smith has served as our Chief Executive Officer since November 13, 2007. He also serves as a member of the Board of Directors of Realogy during his term of employment. Mr. Smith is entitled to a base salary of $1 million (the base salary in effect for him as of immediately prior to the effective time of the Merger), may participate in employee benefit plans generally available to our executive officers, and-is eligible to receive an annual bonus award with a target amount equal to 200% of his annual base salary, subject to the attainment of performance goals and his continued employment with us on the last day of the applicable bonus year, as well as adjustments based on a merit review. In connection with entering into his employment agreement and as partial consideration for his retention following the Merger, Mr. Smith received a one-time $5 million bonus in connection with the consummation of the Merger, the after-tax amount of which Mr. Smith elected to invest in shares of Holdings common stock.

Mr. Smith is also entitled to an annual bonus, the after-tax proceeds of which are required to be used to purchase the annual premium on an existing life insurance policy. This benefit is provided to Mr. Smith as the replacement of a benefit previously provided to him by Cendant. Mr. Smith waived his contractual right to receive this bonus with respect to the bonuses payable in January 2009 and 2010 in order to reduce Company expense but did receive this bonus in January 2011 in the amount of $97,000.

Messrs. Hull, Kelleher, Perriello and Zipf. On April 10, 2007, we entered into new employment agreements with each of Messrs. Hull, Kelleher, Perriello and Zipf (for purposes of this section, each, an “Executive”), with a

 

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five-year term (unless earlier terminated) commencing as of the effective time of the Merger, subject to automatic extension for an additional year unless either party provides notice of non-renewal. Pursuant to these employment agreements, each of the Executives continues to serve in the same positions with us as they had served prior to the Merger. These employment agreements supersede any prior employment agreements that we entered into with each Executive. Messrs. Hull, Kelleher, Perriello and Zipf are entitled to the base salary in effect for them as of immediately prior to the effective time of the Merger, as well as employee benefit plans generally available to our executive officers and are eligible for annual bonus awards with a target amount equal to the target bonus in effect for them as of the effective time of the Merger, which target is currently equal to 100% of each Executive’s annual base salary, subject to the attainment of performance goals and the Executive’s being employed with us on the last day of the applicable bonus year. The following are the annual rates of base salary paid to each of the following named executive officers as of December 31, 2010: Mr. Hull, $525,000; Mr. Kelleher, $416,000; Mr. Perriello, $520,000; and Mr. Zipf, $520,000.

Potential Payments upon Termination or Change in Control

The following summarizes the potential payments that may be made to our named executive officers in the event of a termination of their employment or a change of control as of December 31, 2010.

If Mr. Smith’s employment is terminated by us without “cause” or by Mr. Smith for “good reason,” subject to his execution and non-revocation of a general release of claims against us and our affiliates, he will be entitled to (1) a lump sum payment of his unpaid base salary and unpaid earned bonus and (2) an aggregate amount equal to 300% of the sum of his (a) then-current annual base salary and (b) his then-current target bonus, 50% of which will be paid thirty (30) business days after his termination of employment and the remaining portion of which will be paid in thirty-six (36) equal monthly installments following his termination of employment. If Mr. Smith’s employment is terminated for any reason, Mr. Smith and his dependents may continue to participate in all of our health care and group life insurance plans until the end of the plan year in which he reaches, or would have reached, age 75, subject to his continued payment of the employee portion of the premiums for such coverage. Mr. Smith is subject to three-year post-termination non-competition and non-solicitation covenants and is entitled to be reimbursed by us for any “golden parachute” excise taxes, including taxes on any such reimbursement, subject to certain limitations described in his employment agreement.

Cause is defined in Mr. Smith’s employment agreement to mean (i) his willful failure to substantially perform his duties as an employee of the Company or any subsidiary (other than any such failure resulting from incapacity due to physical or mental illness), (ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Company or any subsidiary, (iii) his conviction of, or plea of guilty or nolo contendere to a charge of commission of, a felony or crime involving moral turpitude, (iv) his indictment for a charge of commission of a felony or any crime involving moral turpitude, provided that the Board determines in good faith that such indictment would result in a material adverse impact to the business or reputation of the Company, (v) his gross negligence in the performance of his duties, or (vi) his purposefully or negligently making (or having been found to have made) a false certification to the Company pertaining to its financial statements; a termination will not be for “Cause” pursuant to clause (i), (ii) or (v), to the extent such conduct is curable, unless the Company shall have notified Mr. Smith in writing describing such conduct and he shall have failed to cure such conduct within ten (10) business days after his receipt of such written notice.

Good Reason is defined in Mr. Smith’s employment agreement as voluntary resignation after any of the following actions taken by the Company or any of its subsidiaries without Mr. Smith’s consent: (i) his removal from, or failure to be elected or re-elected to, the Board; (ii) a material reduction of his duties and responsibilities to the Company, (iii) a reduction in his annual base salary or target bonus (not including any diminution related to a broader compensation reduction that (A) is made in consultation with Mr. Smith and (B) is applied to all senior executives of the Company in a relatively proportionate manner); (iv) the relocation of Mr. Smith’s primary office to a location more than 30 miles from the prior location; (v) delivery of notice of non-renewal of the employment period by the Company (other than non-renewal by the Company due to Mr. Smith’s disability,

 

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termination for Cause or termination by Mr. Smith); or (vi) a material breach by the Company of a material provision of the employment agreement (including a breach of Section 2(a) of the employment agreement, which sets forth Mr. Smith’s position with the Company). A termination shall not be for “Good Reason” pursuant to clause (i), (ii), (iii) or (iv), unless Mr. Smith shall have given written notice of his intention to resign for Good Reason and the Company shall have failed to cure the event giving rise to Good Reason within ten (10 ) business days after the Company’s receipt of such written notice.

With respect to Messrs. Hull, Kelleher, Perriello and Zipf (also for purposes of this section, each, an “Executive”), each Executive’s employment agreement provides that if his employment is terminated by us without “cause” or by the Executive for “good reason,” subject to his execution of a general release of claims against us and our affiliates, the Executive will be entitled to:

 

  (1) a lump sum payment of his unpaid annual base salary and unpaid earned bonus;

 

  (2) an aggregate amount equal to (x) if such termination occurs within 12 months after a “Sale of the Company,” 200% of the sum of his (a) then-current annual base salary plus his (b) then-current annual target bonus; or (y) 100% (200% in the case of Mr. Hull) of the sum of his (a) then-current annual base salary plus his (b) then-current annual target bonus. Of such amount, 50% will be payable in a lump sum within 30 business days of the date of termination, and the remaining portion will be payable in 12 (24 in the case of Mr. Hull) equal monthly installments following his termination of employment; and

 

  (3) from the period from the date of termination of employment to the earlier to occur of the second anniversary of such termination or the date on which the individual becomes eligible to participate in another employer’s medical and dental benefit plans, participation in the medical and dental benefit plans maintained by us for active employees, on the same terms and conditions as such active employees, as in effect from time to time during such period.

The definition of Cause and Good Reason under each Executive’s employment agreement are identical to those contained in Mr. Smith’s employment agreement except as follows: (A) clause (i) of the definition of Good Reason under Mr. Smith’s employment agreement is not contained in the definition of Good Reason in each Executive’s employment agreement; and (B) the addition of language in the definition of Good Reason that a material breach by the Company of a material provision of the Executive’s employment agreement does not include any promotion or lateral assignment of the Executive.

Each Executive is subject to a two-year post-termination non-competition covenant and three-year post-termination non-solicitation covenant.

 

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The following table sets forth information regarding the value of potential termination payments and benefits our named executive officers would have become entitled to receive upon their termination of employment with us under certain circumstances as of December 31, 2010:

 

Name

  Benefit   Termination without
Cause or for
Good Reason

within 12 months
following a Sale of
the Company ($)
    Termination without
Cause or for
Good Reason

other than within 12
months following a
Sale of the Company
($)
    Death
($)
    Disability
($)
 

Richard A. Smith

  Severance Pay     9,000,000 (3)      9,000,000        1,000,000        1,000,000   
  Health Care (1)     330,076        330,760        330,076        330,076   
  Equity Acceleration     65,363 (2)      —          —          —     

Anthony E. Hull

  Severance Pay     2,100,000        2,100,000        525,000        525,000   
  Health Care     25,641        25,641        12,821        12,821   
  Equity Acceleration     15,750 (2)      —          —          —     

Kevin J. Kelleher

  Severance Pay     1,664,000        832,000        416,000        416,000   
  Health Care     23,455        23,455        11,728        11,728   
  Equity Acceleration     12,600 (2)      —          —          —     

Alexander E. Perriello, III.

  Severance Pay     2,080,000        1,040,000        520,000        520,000   
  Health Care     10,578        10,578        5,289        5,289   
  Equity Acceleration     15,750 (2)      —          —          —     

Bruce Zipf

  Severance Pay     2,080,000        1,040,000        520,000        520,000   
  Health Care     18,307        18,307        9,154        9,154   
  Equity Acceleration     12,600 (2)      —          —          —     

 

(1) If Mr. Smith’s employment is terminated for any reason, Mr. Smith and his dependents may continue to participate in all of our health care and group life insurance plans until the end of the plan year in which he reaches, or would have reached, age 75, subject to his continued payment of the employee portion of the premiums for such coverage.
(2) The vesting of options accelerate upon a Sale of the Company provided, however, that in the event the individual terminates his employment without “good reason” or his employment is terminated for “cause” within one year of the Sale of the Company, the individual would be required to remit to the Company the proceeds realized in the Sale of the Company for those options, the vesting of which was accelerated due to the Sale of the Company. The value ascribed to the accelerated vesting of the options is based upon a fair market value of the Holdings common stock of $0.86 per share as of December 31, 2010.
(3) No “golden parachute” excise tax would be payable based upon Mr. Smith’s historical compensation and, accordingly, the Company would have no obligation to reimburse Mr. Smith for any such taxes.

Director Compensation

The following sets forth information concerning the compensation of our independent director in 2010. None of the other members of our board of directors received any compensation for their service as a director in 2010.

 

Name

   Fees earned
or paid in
cash

($)
     All other
compensation
($)
    Total
($)
 

V. Ann Hailey

     160,000         —          160,000   

Henry R. Silverman

     —           141,482 (1)      141,482 (1) 

 

(1) Consists of post-employment secretarial support provided to Mr. Silverman pursuant to his employment agreement with us.

 

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Ms. Hailey, our only independent director and the Chair of our Audit Committee, joined the Board on February 4, 2008. She receives a director retainer of $150,000 and a fee as Audit Committee Chair of $10,000, each on an annualized basis. During 2009 and 2010, the entire $150,000 director retainer fee was payable in cash pursuant to an action taken by the Compensation Committee. For 2008, of the $150,000 director retainer fee, $90,000 was payable pursuant to a grant of restricted shares of common stock of Holdings based upon the fair market value of the common stock on the date of grant, provided that in connection with the initial grant made on February 4, 2008, the common stock was valued at $10.00 per share. The vesting of the restricted stock is identical to the vesting terms of the restricted stock awards granted to certain executive officers: namely, one-half vested 18 months following the date of grant (August 4, 2009) and the other half vested 36 months following the date of grant (February 4, 2011). We determined that the fair market value of the restricted stock award of 9,000 shares on the date of grant (February 4, 2008) was $90,000.

Newly appointed independent directors also receive on the date of their appointment a one-time grant of non-qualified options to purchase 50,000 shares of common stock of Holdings with an exercise price equal to the greater of $10.00 per share or the fair market value of the Holdings common stock on the date of grant. The options become exercisable at the rate of 25% of the underlying shares upon each of the first four anniversaries following the date of grant, subject to acceleration and vesting in full upon a Sale of the Company (as that term is defined in the Holdings Stock Incentive Plan). We determined that in accordance with the FASB’s guidance on accounting for stock-based compensation, the fair market value of the option on the date of grant (February 4, 2008) was $2.42 per share or $121,000 in the aggregate.

On March 3, 2011, the Compensation Committee amended the Holdings’ policy with respect to compensation of directors to eliminate the one-time grant of non-qualified options for any newly appointed independent director and to provide that one-half of the $150,000 annual independent director retainer fee will be payable pursuant to a grant of non-qualified stock options. The exercise price of the options will be equal to the fair market value of the Class A Common Stock on the date of grant and the options will become exercisable at the rate of 25% of the underlying shares upon each of the first four anniversaries following the date of grant, subject to acceleration and vesting in full upon a Sale of the Company. In accordance with the revised policy, on March 3, 2011, the Compensation Committee awarded Ms. Hailey, as part of her 2011 director compensation, a grant of 105,000 non-qualified options to purchase shares of Class A Common Stock at an exercise price of $0.86 per share, which the Compensation Committee determined was the fair market value of the Class A Common Stock on the date of grant. To increase the retention incentives provided by our stock based compensation programs to Ms. Hailey, the Compensation Committee also approved the grant of 150,000 non-qualified stock options to purchase shares of Class A Common Stock at an exercise price of $0.86 per share to become exercisable at the rate of 37,500 options per year commencing March 3, 2012, and the grant of a restricted stock award for 105,000 shares of Class A Common Stock, 52,500 shares of which will vest 18 months following the date of grant and the balance will vest 36 months following the date of grant, subject to her continued service on the Holdings Board.

In connection with Mr. Silverman’s appointment as non-executive chairman of the Company, on November 13, 2007, the Holdings Board granted Mr. Silverman an option to purchase 5 million shares of Holdings common stock at $10 per share. The options include both time vesting (tranche A) options and performance vesting (tranche B and tranche C) options. In general, one-half of the options granted to Mr. Silverman vest and become exercisable in five equal installments on each of the 12th, 24th, 36th, 48th and 60th month anniversaries of September 1, 2007 (the tranche A options), and one-half of the options are performance vesting options, one-half of which vest upon the achievement of an internal rate of return of funds managed by Apollo with respect to its investment in Holdings of 20% (the tranche B options), and the remaining half of which vest upon the achievement of an internal rate of return of such funds of 25% (the tranche C options). We determined that excluding the effect of estimated forfeitures, in accordance with the FASB’s guidance, the fair market value of the option on the date of grant (November 13, 2007) was $2.58 per share or an aggregate of $6,450,000, which includes only the value of the time-vested options (the tranche A options). We also determined the grant date fair market value of the tranche B options and tranche C options but will only

 

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recognize those costs as compensation expense when the performance criteria are probable of occurring (e.g, an initial public offering or significant capital transaction). Assuming the highest level of performance conditions is probable, the total grant date fair value of the options would be $11,611,431.

The assumptions we used in determining the grant date fair value of the restricted stock and options outstanding at December 31, 2010 are described in Note 12, “Stock-Based Compensation” to our consolidated financial statements included elsewhere in this Annual Report.

A director who serves on the Holdings Board does not receive any additional compensation for service on the board of directors of a subsidiary of Holdings, unless there shall be a committee of a subsidiary where there is not a corresponding committee of Holdings.

Compensation Committee Interlocks and Insider Participation

Shortly prior to the consummation of the Merger, Apollo, principally through the Holdings Board, whose members then consisted of Apollo’s representatives, Messrs. Marc Becker and M. Ali Rashid, negotiated employment agreements and other arrangements with our named executive officers. Between April 10, 2007 and mid-February 2008, decisions relating to executive compensation were within the province of the Holdings Board and the Realogy Board, both of which were (and are) controlled by Apollo representatives. In February 2008, the Holdings Board established the Compensation Committee, whose members consist of Messrs. Becker and Rashid.

During 2010, none of the members of the Compensation Committee had any relationship that requires disclosure in this Annual Report as a transaction with a related person, though both members are employed by Apollo, which has engaged in related party transactions with us during 2010 as discussed in “Item 13 – Certain Relationships and Related Transactions, and Director Independence.”

During 2010, (1) none of our executive officers served as a member of the compensation committee of another entity, one of whose executive officers served on the Holdings Board or the Realogy Board; (2) none of our executive officers served as a director of another entity, one of whose executive officers served on the Holdings Board or the Realogy Board, and (3) none of our executive officers served as a member of the compensation committee of another entity, one of whose executive officers served as one of the directors of the Holdings Board or Realogy Board.

 

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Security Ownership of Certain Beneficial Holders and Management

All of our issued and outstanding common stock is owned by our parent, Intermediate, and all of the issued and outstanding common stock of Intermediate is owned by its parent, Holdings. Our common stock owned by Intermediate constitutes all of our issued and outstanding capital stock.

Pursuant to Holdings’ amended and restated certificate of incorporation, Holdings has two classes of common stock, Class A Common Stock (“Class A Common Stock”) and Class B Common Stock (“Class B Common Stock” and together with the Class A Common Stock, the “common stock”), each with a par value of $0.01 per share. All of the outstanding shares of common stock are shares of Class B Common Stock and all of the common stock into which the Convertible Notes are convertible will be shares of Class A Common Stock. Each share of Class A Common Stock has one vote per share. Each share of Class B Common Stock has five votes per share. The Class B Common Stock will automatically convert into Class A Common Stock on a share-for-share basis once (i) Apollo converts all of the Convertible Notes it received in the Debt Exchange Offering into shares of Class A Common Stock or (ii) upon a Qualified Public Offering, provided that such conversion would not result in a change of control of Realogy.

The following table sets forth information regarding the beneficial ownership of Holdings common stock as of March 1, 2011 assuming all of the Convertible Notes are converted into common stock, by (i) each person known to beneficially own more than 5% of the common stock of Holdings, (ii) each of our named executive officers, (iii) each member of our Board of Directors and (iv) all of our executive officers and members of our Board of Directors as a group. At March 1, 2011, there were 200,430,906 shares of Holdings common stock outstanding.

The amounts and percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which he has no economic interest.

 

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Except as indicated by footnote, the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.

 

Name of Beneficial Owner

   Amount
and Nature
of Beneficial
Ownership of
Class A
Common

Stock (1)
     Amount
and Nature
of Beneficial
Ownmership
of Class B
Common Stock
     Percentage of
Class B
Common Stock
    Percentage
of Common
Stock (1)
 

Apollo (2)

     1,276,938,607         197,820,000         98.7     66.2

Henry R. Silverman (3) (9)

     —           1,500,000         *        *   

Richard A. Smith (4)

     —           912,025         *        *   

Anthony E. Hull (5)

     —           282,025         *        *   

Kevin J. Kelleher (6)

     —           181,069         *        *   

Alexander E. Perriello, III (7)

     —           232,025         *        *   

Bruce Zipf (8)

     —           224,050         *        *   

Marc E. Becker (9)

     —           —           —          *   

V. Ann Hailey (10)

     —           46,500         *        *   

Scott M. Kleinman (9)

     —           —           —          *   

M. Ali Rashid (8)

     —           —           —          *   

Directors and executive officers as a group (14 persons) (11)

     —           3,723,406         1.8     *   

Paulson & Co. Inc. (12)

     479,022,151         —           —          21.5

York Capital Management (13)

     75,418,797         —           —          3.4

Avenue Capital Management II, L.P. (14)

     62,238,295         —           —          2.8

Western Asset Management Company (15)

     61,646,832         —           —          2.8

 

 * Less than one percent.
(1) Assumes conversion of all outstanding Convertible Notes into shares of Class A Common Stock. As of March 1, 2011, $1,143,706,000 aggregate principal amount of Series A Convertible Notes, $291,424,196 aggregate principal amount of Series B Convertible Notes and $675,111,000 aggregate principal amount of Series C Convertible Notes were outstanding. The initial conversion rates of the Convertible Notes are 975.6098 shares of Class A Common Stock per $1,000 aggregate principal amount of Series A Convertible Notes or Series B Convertible Notes, which is equivalent to an initial conversion price of approximately $1.025 per share, and 926.7841 shares of Class A Common Stock per $1,000 aggregate principal amount of Series C Convertible Notes, which is equivalent to an initial conversion price of approximately $1.079 per share. The conversion rates are subject to certain anti-dilution adjustments. Assuming all of the Convertible Notes were converted into Class A Common Stock at the applicable initial conversion rates and assuming conversion of all of the Class B Common Stock into Class A Common Stock on a share-for-share basis, there would be 2,226,240,129 shares of Class A Common Stock outstanding as of March 1, 2011.
(2)

Reflects (i) the outstanding shares of capital stock of Domus Holdings Corp. which are held of record by Apollo Investment Fund VI, L.P. (“AIF VI LP”), Domus Investment Holdings, LLC (“Domus LLC”), Domus Co-Investment Holdings LLC (“Domus Co-Invest LLC”) and various members of management of Holdings and Realogy, which are shares of Class B Common Stock with five votes per share, and (ii) the outstanding shares of Class A Common Stock that will be held by RCIV Holdings (Luxembourg) S.à r.l. (“RCIV Sarl”) upon the conversion of its Convertible Notes. The general partner of AIF VI LP is Apollo Advisors VI, L.P. (“Advisors VI”) and the investment manager of AIF VI LP is Apollo Management VI, L.P. (“Management VI”). The sole stockholder of RCIV Sarl is RCIV Holdings, L.P. (“RCIV Holdings”). The general partner of RCIV Holdings is Apollo Advisors VI (EH), L.P. (“Advisors VI EH”) and the investment manager of RCIV Holdings is Management VI. Management VI also serves as the manager or managing member of each of Domus LLC and Domus Co-Invest LLC. The general partner of Management VI is AIF VI Management, LLC (“AIF VI LLC”). The sole member-manager of AIF VI LLC is Apollo Management, L.P. (“Apollo Management”). The general partner of Apollo Management is Apollo Management GP, LLC (“Apollo Management GP”). The sole member-manager of Apollo Management GP is Apollo Management Holdings, L.P. (“Management Holdings”). The general partner of Management Holdings is Apollo Management Holdings GP, LLC (“Management Holdings GP” and together with Management VI, AIF VI LLC, Apollo Management, Apollo Management GP and Management Holdings, the “Apollo Management Entities”). The general partner of Advisors VI is Apollo Capital Management VI,

 

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LLC (“Capital Management VI”). The sole member of Capital Management VI is Apollo Principal Holdings I, L.P. (“Principal Holdings I”), and the general partner of Principal Holdings I is Apollo Principal Holdings I GP, LLC (“Principal Holdings I GP”). The general partner of Advisors VI EH is Apollo Advisors VI (EH-GP), Ltd. (“Advisors VI EH-GP”) The sole stockholder of Advisors VI EH-GP is Apollo Principal Holdings III, L.P, (“Principal Holdings III”), and the general partner of Principal Holdings III is Apollo Principal Holdings III GP, Ltd. (“Principal Holdings III GP” and together with Advisors VI, Advisors VI EH, Capital Management VI, Principal Holdings I, Principal Holdings I GP, Advisors VI EH GP and Principal Holdings III, the “Apollo Advisors Entities”). Leon Black, Joshua Harris and Marc Rowan are the managers of each of Management Holdings GP and Principal Holdings I GP and the directors of Principal Holdings III GP. Each of AIF VI LP, Domus LLC, Domus Co-Invest LLC, RCIV Sarl, RCIV Holdings, the Apollo Management Entities, the Apollo Advisors Entities and Messrs. Black, Harris and Rowan disclaims beneficial ownership of the shares of Realogy held by Domus Intermediate except to the extent of any pecuniary interest therein. The address for RCIV Sarl is 9b, boulevard Prince Henri, L-1724, Luxembourg Luxembourg, and the address for RCIV Holdings is c/o Walkers Corporate Services Limited, Walker House, 87 Mary Street, George Town, Grand Cayman KY1-9002, Cayman Islands. The address for AIF VI LP, Domus LLC, Domus Co-Invest LLC and the Apollo Advisors Entities is One Manhattanville Road, Suite 201, Purchase, New York 10577. The address for the Apollo Management Entities and Messrs. Black, Harris and Rowan is 9 West 57th Street, 43rd Floor, New York, NY 10019. Does not include 4,159,356 shares of common stock (including 2,606,906 shares held outright, 1,552,450 shares issuable upon exercise of currently exercisable options or options exercisable within 60 days of March 1, 2011) beneficially owned by our directors and executive officers and other members of our management, for which AIF VI LP and Domus LLC have voting power pursuant to the Management Investor Rights Agreement (as defined below) but not investment power.

(3) Includes 1,500,000 shares of common stock issuable upon currently exercisable options but does not include 3,500,000 shares of common stock that are issuable upon exercise of options that remain subject to vesting.
(4) Does not include 3,112,500 shares of common stock that are issuable upon exercise of options that remain subject to vesting.
(5) Does not include 750,000 shares of common stock that are issuable upon exercise of options that remain subject to vesting.
(6) Does not include 600,000 shares of common stock that are issuable upon exercise of options that remain subject to vesting.
(7) Does not include 750,000 shares of common stock that are issuable upon exercise of options that remain subject to vesting.
(8) Does not include 600,000 shares of common stock that are issuable upon exercise of options that remain subject to vesting.
(9) Messrs. Silverman, Becker, Kleinman and Rashid are each principals and officers of certain affiliates of Apollo. Although each of Messrs. Silverman, Becker, Kleinman and Rashid may be deemed the beneficial owner of shares beneficially owned by Apollo, each of them disclaims beneficial ownership of any such shares.
(10) Includes 37,500 shares of common stock issuable upon exercise of currently exercisable options. Does not include an additional 12,500 shares of common stock that are issuable upon exercise of options that remain subject to vesting.
(11) Includes options to purchase 1,537,500 shares of common stock issuable upon exercise of currently exercisable options or options that become exercisable within 60 days following March 1, 2011. Does not include 10,525,000 shares of common stock that are issuable upon exercise of options that remain subject to vesting.
(12) Based on information furnished to us by such person, consists of all the shares of Class A Common Stock held by Paulson assuming conversion of its Convertible Notes. Assuming only Paulson converts its Convertible Notes, it would own approximately 70.5% of the total outstanding shares of common stock and approximately 32.3% of the voting power with respect to the common stock. Paulson holds the shares of Class A Common Stock on behalf of the several investment funds and accounts managed by it. John Paulson owns 100% of Paulson and has sole voting power and authority over the shares of Class A Common Stock held by Paulson. John Paulson may be deemed the beneficial owner of shares beneficially owned by Paulson but disclaims beneficial ownership of any such shares. The address for Paulson is 1251 Avenue of the Americas, 50th Floor, New York, New York 10020.
(13)

Based on information furnished to us by such person, consists of all the shares of Class A Common Stock held by certain entities managed by York Capital Management (together with such entities, “York”) assuming conversion of their Convertible Notes. Assuming only York converts its Convertible Notes, it would own approximately 27.3% of the total outstanding shares of common stock and approximately 7.0%

 

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of the voting power with respect to the common stock. The holders of record of the shares of Class A Common Stock owned by York are York Credit Opportunities Fund, L.P., York Credit Opportunities Master Fund, L.P. Jorvik Multi-Strategy Master Fund, L.P., York Multi-Strategy Master Fund, L.P., York Capital Management, L.P. and certain accounts managed by York Managed Holdings, LLC. The general partner of York Credit Opportunities Fund, L.P. and York Credit Opportunities Master Fund, L.P. is York Credit Opportunities Domestic Holdings, LLC. The general partner of Jorvik Multi-Strategy Master Fund, L.P., York Multi-Strategy Master Fund, L.P. and York Capital Management, L.P. is Dinan Management, LLC. York Capital Management Global Advisors, LLC has sole voting power and investment authority over the shares of Class A Common Stock held by each of the foregoing. The address for York is 767 Fifth Avenue, 17th Floor, New York, New York 10153.

(14) Based on information furnished to us by such person, consists of all of the shares of Class A Common Stock held by Avenue Capital Management II, L.P. (together with its affiliated funds, “Avenue”) assuming conversion of its Convertible Notes. Assuming only Avenue converts its Convertible Notes, it would own approximately 23.7% of the total outstanding shares of common stock and approximately 6.2% of the voting power with respect to the common stock. The holders of record of the shares of Class A Common Stock owned by Avenue are Avenue Special Situations Fund IV, L.P., Avenue Special Situations Fund V, L.P., Avenue-CDP Global Opportunities Fund, L.P., Avenue Investments, L.P. and Avenue International Master, L.P. Avenue Capital Management II, LP has sole voting power and investment authority over the shares of Class A Common Stock held by each of the foregoing. The general partner of Avenue Capital Management II, LP is Avenue Capital Management II GenPar, LLC whose sole members are Marc Lasry and Sonia Gardner. Each of Marc Lasry and Sonia Gardner may be deemed beneficial owners of the shares beneficially owned by Avenue but each disclaim beneficial ownership of any such shares. The address for Avenue is 399 Park Avenue, 6th Floor, New York, NY 10022.
(15) Based on information furnished to us by such person, consists of all of the shares of Class A Common Stock held in investment funds and separately managed client accounts (the “WAMCO Accounts”) for which Western Asset Management Company (“WAMCO”) serves as investment manager. The number of shares reported assumes conversion of all Convertible Notes held in the WAMCO Accounts. Assuming only WAMCO converts all Convertible Notes held in the WAMCO Accounts, the WAMCO Accounts would own approximately 23.5% of the total outstanding shares of common stock and approximately 6.2% of the voting power with respect to the common stock. WAMCO does not directly own any of the shares listed. WAMCO may be deemed to be the beneficial owner of shares beneficially owned by the client accounts for which it serves as investment manager, but disclaims beneficial ownership of any such shares. The address for WAMCO is 385 E. Colorado Blvd., Pasadena, CA 91101.

Equity-Based Compensation Plans

Securities Authorized for Issuance Under Equity Compensation Plan

In connection with the closing of the Merger on April 10, 2007, the Holdings Board adopted the 2007 Stock Incentive Plan (the “Stock Incentive Plan”). The Stock Incentive Plan authorizes the Holdings Board, or a committee thereof, to grant unqualified stock options, rights to purchase shares of common stock, restricted stock, restricted stock units and other awards settleable in, or based upon, Holdings common stock, to directors and employees of, and consultants to, Holdings and its subsidiaries, including Realogy. On November 13, 2007, the Holdings Board amended and restated the Stock Incentive Plan to increase the number of shares of Holdings common stock authorized for issuance thereunder from 15 million to 20 million. The Stock Incentive Plan was further amended on November 9, 2010. For additional discussion of our equity compensation, see “Item 11 – Executive Compensation – Stock Incentive Plan” and Note 12, “Stock-Based Compensation” of our consolidated financial statements included elsewhere in this Annual Report. The table below summarizes the equity issuances under the Stock Incentive Plan as of December 31, 2010:

 

Plan Category

   Number of
Securities

To be Issued
Upon Exercise or
Vesting

of Outstanding
Options, Warrants
and Rights
    Weighted Average
Exercise Price
of Outstanding
Options, Warrants
and Rights (1)
     Number of
Securities
Remaining
Available

for Future
Issuance Under
Equity
Compensation
Plans
 

Equity compensation plans-approved by stockholders

     —          —           —     

Equity compensation plans-not approved by stockholders

     15,257,750  (2)    $ 4.53         2,016,750  (3) 

 

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(1) Does not include 4,500 restricted shares outstanding at December 31, 2010.
(2) In addition, of the shares of Holdings common stock issued and outstanding at December 31, 2010, there were 2,725,500 shares of common stock that had been purchased or had vested under the Stock Incentive Plan pursuant to individual subscription agreements and restricted stock awards (including shares that have been forfeited to satisfy tax withholding obligations).
(3) Also gives effect to shares issued under the Stock Incentive Plan as described in footnote (2).

 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Support Agreement

On November 30, 2010, the Company and Holdings entered into a support agreement (the “Support Agreement”) with Paulson, Avenue and RCIV Sarl, an affiliate of Apollo, the Company’s controlling stockholder (together with Paulson and Avenue, the “Significant Holders”), which collectively held, as of such date, approximately $1.01 billion (59%) aggregate principal amount of Existing Senior Notes, approximately $342 million (73%) aggregate principal amount of Existing Senior Toggle Notes and approximately $606 million (69%) aggregate principal amount of the Existing Senior Subordinated Notes, whereby (i) Paulson and Apollo agreed to tender in the Debt Exchange Offering all of their Existing Notes in exchange for Convertible Notes, plus any additional Existing Notes acquired by them through the expiration of the Exchange Offers (the “Expiration Time”) and (ii) Avenue agreed to tender in the Debt Exchange Offering approximately $250 million aggregate principal amount of its Existing Notes for Extended Maturity Notes and the remaining approximately $64 million aggregate principal amount of its Existing Notes for Convertible Notes, plus any additional Existing Notes acquired by them through the Expiration Time. Apollo agreed to participate in the Debt Exchange Offering with respect to approximately $1,338 million aggregate principal amount of Existing Notes.

Pursuant to the Support Agreement, the Company and Holdings agreed to indemnify each Significant Holder for losses resulting from any claims of their stockholders, investors or creditors, or any of their affiliates or subsidiaries, in connection with the Debt Exchange Offering and also reimbursed each of Paulson and Avenue for reasonable attorney’s fees incurred by them in connection with the Debt Exchange Offering up to $225,000 in each case.

Apollo, Paulson and Avenue tendered approximately $1,338 million, $494 million and $314 million aggregate principal amount of Existing Notes, respectively, in the Debt Exchange Offering.

Issuance of Convertible Notes Upon Consummation of Exchange Offers; Amendment and Restated Certificate of Incorporation of Holdings

On January 5, 2011, the Company, in connection with the consummation of the Exchange Offers, issued $1,144 million aggregate principal amount of Series A Convertible Notes, $291 million aggregate principal amount of Series B Convertible Notes and $675 million aggregate principal amount of Series C Convertible Notes to eligible holders of Existing Notes that elected to receive Convertible Notes in the Exchange Offers. The Convertible Notes were issued pursuant to Section 4(2) of the Securities Act only to holders who were “qualified institutional buyers” (as defined in Rule 144A under the Securities Act) or institutional “accredited investors” within the meaning of Rule 501 (a)(1), (2), (3) or (7) of Regulation D under the Securities Act.

The Company issued approximately $1,338 million, $494 million, $78 million, $64 million and $63 million aggregate principal amount of Convertible Notes to Apollo, Paulson, York, Avenue and WAMCO, respectively.

At the closing of the Debt Exchange Offering, the Holdings certificate of incorporation was amended and restated to provide, among other things, for two classes of common stock, Class A Common Stock and Class B Common Stock. All of the outstanding shares of common stock are shares of Class B Common Stock, substantially all of which are owned by Apollo. All of the common stock into which the Convertible Notes are

 

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convertible will be shares of Class A Common Stock. Each Share of Class A Common Stock has one vote per share. Each share of Class B Common Stock has 5 votes per share. The Class B Common Stock will automatically convert into Class A Common Stock on a share-for-share basis once (i) Apollo converts all of the Convertible Notes it received in the Debt Exchange Offering into shares of Class A Common Stock or (ii) upon a Qualified Public Offering, provided that such conversion would not result in a change of control of Realogy. Even if all the outstanding Convertible Notes held by parties other than Apollo were converted into Class A Common Stock, Apollo would continue to control a majority of the voting power of the outstanding Common Stock.

Assuming all Convertible Notes are converted into shares of Class A Common Stock, Apollo and Paulson would beneficially own approximately 66.2% and 21.5%, respectively, of the total outstanding shares of common stock on an as-converted basis (not including shares of common stock held by management for which Apollo exercises voting power). None of York, Avenue and WAMCO would beneficially own more than 5% of the total outstanding shares of common stock assuming the conversion of all the Convertible Notes. However, if any of York, Avenue or WAMCO converted its Convertible Notes before the conversion of any other Convertible Notes, it would beneficially own more than 5% of the total outstanding shares of common stock. See “Item 12—Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” In connection with the Exchange Offers, each of York, Avenue, Paulson and WAMCO also entered into a securityholders agreement with the Company, Holdings and Apollo as further described below.

Apollo Securityholders Agreement

On January 5, 2011, Holdings and certain holders of common stock affiliated with Apollo amended and restated the Securityholders Agreement, originally dated as of April 10, 2007 (as amended and restated, the “Apollo Securityholders Agreement”), which became effective upon consummation of the Debt Exchange Offering. The Apollo Securityholders Agreement, among other things, generally sets forth the rights and obligations of Domus Co-Investment Holdings LLC—a co-investment entity formed at the time of the Merger for the purpose of owning shares of common stock held beneficially by certain co-investors.

The Apollo Securityholders Agreement provides that prior to a Qualified Public Offering, Apollo Investment Fund VI, L.P., RCIV Holdings (Luxembourg) S.à r.l., RCIV Holdings, L.P. and Domus Investment Holdings, LLC (collectively, the “Sponsor Funds”) will have preemptive rights with respect to certain offerings by Holdings or Realogy of equity securities. The Sponsor Funds’ preemptive rights do not apply to the Convertible Notes issued upon consummation of the Debt Exchange Offering or to the Class A Common Stock issued upon conversion thereof. If Holdings or Realogy proposes to issue or sell any equity securities, or securities convertible into, issuable upon exercise of or exchangeable for any such equity securities (excluding the Convertible Notes and Class A Common Stock issued upon conversion thereof and subject to certain customary exceptions), then the Sponsor Funds will have the right to participate in any such issuance based on its pro rata equity ownership on a fully diluted basis. The Apollo Securityholders Agreement also provides for limited preemptive rights to Domus Co-Invest LLC in any subscription of equity securities of Holdings or its subsidiaries (or securities convertible into or exchangeable for any such equity securities) by the Sponsor Funds or any affiliates thereof to which any transfers of common stock are made.

The Apollo Securityholders Agreement also:

 

   

provides for certain rights and obligations of Domus Co-Invest LLC upon any disposition of shares of common stock by the Sponsor Funds to any third party;

 

   

restricts the ability of Domus Co-Invest LLC to transfer its shares in Holdings, other than in connection with sales initiated by the Sponsor Funds;

 

   

provides Domus Co-Invest LLC with certain information rights;

 

   

provides that the board of directors of Holdings shall include two directors previously designated by Domus Co-Invest LLC and Apollo Investment Fund VI, L.P. and three directors designated by the

 

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Sponsor Funds, in each case, for so long as such entity continues to own common stock or Convertible Notes, and additional directors or non-voting observers designated pursuant to any other agreements of Holdings.

Amended and Restated Management Investor Rights Agreement

On January 5, 2011, Holdings also amended and restated its management investor rights agreement, originally dated as of April 7, 2007 (as amended and restated, the “Management Investor Rights Agreement”), which became effective upon consummation of the Exchange Offers. The Management Investor Rights Agreement was entered into by and among Holdings and AIF VI LP, RCIV Sarl, RCIV Holdings, Domus LLC (collectively, the “Apollo Holders”) and certain management holders (collectively, the “Management Holders”).

The Management Investor Rights Agreement, among other things:

 

   

allows the Management Holders to participate, and grants the Apollo Holders the right to require the Management Holders to participate, in certain sales or transfers of shares of common stock;

 

   

restricts the ability of Management Holders to transfer, assign, sell, gift, pledge, hypothecate, encumber, or otherwise dispose of common stock prior to a Qualified Public Offering;

 

   

allows Management Holders, subject to mutual indemnification and contribution rights, to include certain securities in a registration statement filed by Holdings with respect to an offering of common stock (i) in connection with the exercise of any demand rights by the Apollo Holders and any affiliates thereof to which any transfers of common stock are made (collectively, the “Apollo Group”) or any other securityholder possessing such rights, or (ii) in connection with which the Apollo Group exercises “piggyback” registration rights;

 

   

allows Holdings and the Apollo Group to repurchase common stock held by Management Holders upon termination of employment or their bankruptcy or insolvency; and

 

   

obligates the Management Holders to abide by certain nonsolicitation, noncompetition, confidentiality and proprietary rights provisions.

The Management Investor Rights Agreement will terminate upon the earliest to occur of the dissolution of Holdings, the occurrence of any event that reduces the number of parties to the agreement to one and the consummation of a control disposition.

Paulson Securityholders Agreement

On November 30, 2010, the Company, Holdings, Paulson and certain affiliates of Apollo (Domus LLC, RCIV Holdings, RCIV Sarl, AIF VI LP and Domus Co-Invest LLC) entered into a securityholders agreement with Paulson (the “Initial Paulson Agreement”) which was subsequently amended and restated on January 5, 2011 (the “Amended and Restated Paulson Agreement” and, together with the Initial Paulson Agreement, the “Paulson Securityholders Agreement”). The Paulson Securityholders Agreement became effective on January 5, 2011, upon consummation of the Debt Exchange Offering. The material terms of the Paulson Securityholders Agreement are set forth below.

Preemptive Rights

Prior to a Qualified Public Offering, Paulson has preemptive rights with respect to certain offerings by Holdings or Realogy of equity or debt. Paulson’s preemptive rights shall not apply to the Convertible Notes issued upon consummation of the Debt Exchange Offering or to the Class A Common Stock issued upon conversion thereof. If Holdings or Realogy proposes to issue or sell any equity securities, or securities convertible into, issuable upon exercise of or exchangeable for any such equity securities (subject to certain

 

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customary exceptions), then Paulson has the right to participate in any such issuance based on its pro rata equity ownership on a fully diluted basis. If Holdings or Realogy proposes to issue or sell debt to an affiliate of Holdings or Realogy, then Paulson has the right to participate in any such issuance up to an amount equal to the fraction of the total offering determined by dividing (i) its then owned New Notes (including Convertible Notes that have been converted into shares of Class A Common Stock still owned by it) by (ii) the total principal amount of outstanding debt of Realogy and Holdings as of the date of the Paulson Securityholders Agreement (“Pro Rata Debt Ownership”). In addition, Realogy will use commercially reasonable efforts to allow Paulson to participate in debt financings to third parties based on Paulson’s Pro Rata Debt Ownership, provided that if Apollo participates in such financing, Paulson shall also be permitted to participate in such financing to the same extent as Apollo based on their respective Pro Rata Debt Ownership at such time.

Registration Rights

Demand Rights. Paulson has two “demand” rights that allow Paulson, at any time after 36 months following the consummation of the Exchange Offers, to request that Holdings undertake an underwritten public offering of its Class A Common Stock under the Securities Act so long as the estimated gross proceeds of any such underwritten public offering would be equal to or greater than $75 million, provided that if the number of Paulson’s shares of Class A Common Stock originally included in Paulson’s demand request is reduced to less than two-thirds of such shares in the underwritten public offering as a result of underwriter cutbacks, Paulson shall not be deemed to have used one of its demand rights. In addition, if Paulson elects to exercise its demand rights prior to a Qualified Public Offering or Holdings notifies Paulson of its intention to consummate a Qualified Public Offering, Paulson will not publicly sell any shares of Class A Common Stock from such time until the expiration of its applicable Lock-Up Period (as defined below).

Blackout Periods. Holdings has the ability to delay the filing of a registration statement in connection with an underwritten demand request for not more than an aggregate of 90 days (the “Maximum Blackout Period) in any twelve-month period, subject to certain conditions. To the extent Holdings delays the filing of a registration statement for a period in excess of the Maximum Blackout Period, it has agreed to pay liquidated damages to Paulson based on the principal amount of Convertible Notes exchanged for the shares of Class A Common Stock requested to be included in such registration by Paulson.

Piggyback Registration Rights. Paulson also has unlimited “piggyback” registration rights that allow Paulson to include its Class A Common Stock in any public offering of equity securities initiated by Holdings or by any of Holdings’ other stockholders that have registration rights, subject to certain customary exceptions. Such registration rights are subject to proportional cutbacks based on the manner of the offering and the identity of the party initiating such offering and may be assigned to third parties if assigned together with a transfer by Paulson of at least $10 million aggregate principal amount of its Convertible Notes or shares of Class A Common Stock issued upon conversion of such Convertible Notes.

Lock-Up

If Holdings registers shares of common stock in an underwritten offering and if requested by the lead managing underwriter in such offering, Paulson will not sell publicly any capital stock of Holdings for a period of not more than 90 days (or up to 180 days in the case of a Qualified Public Offering), commencing on the effective date of the applicable registration statement (each, a “Lock-Up Period”), subject to certain customary exceptions. Paulson has also agreed to enter into customary lock-up agreements with the lead managing underwriter to the extent requested to do so.

Indemnification; Expenses

Holdings has agreed to indemnify Paulson and its officers, directors, employees, managers, members, partners and agents and controlling persons against any losses resulting from any untrue statement or omission of

 

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material fact in any registration statement or prospectus pursuant to which Paulson sells shares of Class A Common Stock, unless such liability arose from Paulson’s misstatement or omission, and Paulson has agreed to indemnify Holdings against all losses caused by its misstatements or omissions up to the amount of proceeds received by Paulson upon the sale of the securities giving rise to such losses. Holdings will pay all registration expenses incidental to Holdings’ obligations under the Paulson Securityholders Agreement, including a specified portion of Paulson’s legal fees and expenses, and Paulson will pay any remaining legal fees and expenses and its portion of all underwriting discounts, commissions and transfer taxes, if any, relating to the sale of its shares of Class A Common Stock under the Paulson Securityholders Agreement.

Tag-Along Rights

If at any time, prior to the consummation of a Qualified Public Offering, certain Apollo entities propose to sell or transfer 5% or more of the outstanding shares of common stock on a fully diluted basis to any non affiliated third party, other than in a Public Sale, then Paulson has the right, subject to certain conditions, to participate in such transfer on a pro rata basis.

“Public Sale” means any sale, occurring simultaneously with or after an initial public offering of shares of Class A Common Stock pursuant to an effective registration statement under the Securities Act, of common stock to the public pursuant to an offering registered under the Securities Act or to the public in the manner described by the provisions of Rule 144 promulgated thereunder, other than an offering relating to employee incentive plans.

Designation and Election of Directors

Until Paulson ceases to own directly or indirectly, shares of common stock (assuming conversion of all of its then outstanding Convertible Notes) representing at least 5% of the outstanding shares of common stock on a fully-diluted basis, Paulson has the right to either (i) nominate one appointee to the Board of Directors of Holdings or (ii) designate one non-voting observer to attend all meetings of the Board of Directors of Holdings.

Consent Rights

Prior to the consummation of a Qualified Public Offering, Holdings, Intermediate and Realogy shall not declare or pay any dividends or any other distributions on capital stock or redeem or repurchase any shares of capital stock without the prior written consent of Paulson, subject to certain specified exceptions. In addition, prior to the consummation of a Qualified Public Offering, Holdings and its direct and indirect subsidiaries may not enter into any transaction or series of transactions with certain Apollo entities if such transaction involves consideration in excess of $10 million without Paulson’s prior written consent, unless such transaction is (i) in connection with the Exchange Offers, a preemptive event pursuant to which Paulson was given the opportunity to participate or pursuant to agreements or arrangements entered into prior to the date of the Paulson Securityholders Agreement, (ii) expressly permitted by the indentures governing the New Notes or (iii) not materially less favorable to Holdings or any of its direct or indirect subsidiaries than could have been obtained in a comparable transaction with an unrelated person.

Holdings may also not enter into any supplement of the indentures governing the Convertible Notes that would materially adversely affect Paulson’s holdings of Convertible Notes for so long as Paulson owns at least 50% of the Convertible Notes it received in the Exchange Offers. The Paulson Securityholders Agreement also provides that without the prior written consent of Paulson, (i) Holdings shall not permit any of its direct or indirect subsidiaries to effectuate an initial public offering of common stock, (ii) Holdings shall at all times own 100% of the capital stock of Intermediate and Intermediate shall at all times own, directly or indirectly, 100% of the capital stock of Realogy and (iii) Holdings shall not engage in any business or activity other than owning shares of Intermediate and Intermediate shall not engage in any business or activity other than owning shares of Realogy.

 

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Termination

The Paulson Securityholders Agreement will terminate upon the first to occur of (i) Holdings’ dissolution, liquidation or winding-up; (ii) with respect to Paulson, when Paulson ceases to own shares of common stock (assuming conversion of all of its then outstanding Convertible Notes) representing at least 5% of the outstanding shares of common stock on a fully diluted basis and (iii) with respect to each Apollo Holder, when such Apollo Holder ceases to own shares of common stock or Convertible Notes; provided, however, that Paulson’s preemptive rights and tag-along rights with respect to equity issuances will not terminate until such time that Paulson owns less than $15 million aggregate principal amount of the Convertible Notes (or shares of Class A Common Stock issued upon conversion of such Convertible Notes or a combination thereof) it received upon consummation of the Exchange Offers.

Avenue Securityholders Agreement

On November 30, 2010, the Company, Holdings, Avenue and certain affiliates of Apollo (Domus LLC, RCIV Holdings, RCIV Sarl, AIF VI LP and Domus Co-Invest LLC) entered into a securityholders agreement with Avenue (the “Initial Avenue Agreement”) which was subsequently amended and restated on January 5, 2011 (the “Amended and Restated Avenue Agreement” and, together with the Initial Avenue Agreement, the “Avenue Securityholders Agreement”). The Avenue Securityholders Agreement became effective on January 5, 2011, upon consummation of the Exchange Offers. The material terms of the Avenue Securityholders Agreement are set forth below.

Preemptive Rights

Prior to a Qualified Public Offering, Avenue has preemptive rights with respect to certain offerings by Holdings or Realogy of equity or debt. Avenue’s preemptive rights shall not apply to the Convertible Notes issued upon consummation of the Debt Exchange Offering or to the Class A Common Stock issued upon conversion thereof. If Holdings or Realogy proposes to issue or sell any equity securities, or securities convertible into, issuable upon exercise of or exchangeable for any such equity securities (subject to certain customary exceptions), then Avenue has the right to participate in any such issuance based on its pro rata equity ownership on a fully diluted basis. If Holdings or Realogy proposes to issue or sell debt to an affiliate of Holdings or Realogy, then Avenue has the right to participate in any such issuance based on its Pro Rata Debt Ownership. In addition, Realogy will use commercially reasonable efforts to allow Avenue to participate in debt financings to third parties based on Avenue’s Pro Rata Debt Ownership, provided that if Avenue participates in such financing, Avenue shall also be permitted to participate in such financing to the same extent as Apollo based on their respective Pro Rata Debt Ownership at such time.

Piggyback Registration Rights

Avenue has unlimited “piggyback” registration rights that allow Avenue to include its Class A Common Stock in any public offering of equity securities initiated by Holdings or by any of Holdings’ other stockholders that have registration rights, subject to certain customary exceptions. Such registration rights are subject to proportional cutbacks based on the manner of the offering and the identity of the party initiating such offering and may be assigned to third parties if assigned together with a transfer by Avenue of at least $10 million aggregate principal amount of its Convertible Notes or shares of Class A Common Stock issued upon conversion of such Convertible Notes.

Lock-Up

If Holdings registers shares of common stock in an underwritten offering and if requested by the lead managing underwriter in such offering, Avenue will not sell publicly any capital stock of Holdings during the applicable Lock-Up Period, subject to certain customary exceptions. Avenue will also enter into customary

 

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lock-up agreements with the lead managing underwriter to the extent requested to do so. In addition, if Holdings notifies Avenue of its intention to consummate a Qualified Public Offering, Avenue will not publicly sell any shares of Class A Common Stock from such time until the expiration of its applicable Lock-Up Period.

Tag-Along Rights

If at any time, prior to the consummation of a Qualified Public Offering, certain Apollo entities propose to sell or transfer 5% or more of the outstanding shares of common stock on a fully diluted basis to any non-affiliated third party, other than in a Public Sale, then Avenue has the right, subject to certain conditions, to participate in such transfer on a pro rata basis.

Indemnification; Expenses

Holdings has agreed to indemnify Avenue and its officers, directors, employees, managers, members, partners and agents and controlling persons against any losses resulting from any untrue statement or omission of material fact in any registration statement or prospectus pursuant to which Holdings sells shares of Class A Common Stock, unless such liability arose from Avenue’s misstatement or omission, and Avenue has agreed to indemnify Holdings against all losses caused by its misstatements or omissions up to the amount of proceeds received by Avenue upon the sale of the securities giving rise to such losses. Holdings will pay all registration expenses incidental to Holdings’ obligations under the Avenue Securityholders Agreement, including a specified portion of Avenue’s legal fees and expenses, and Avenue will pay any remaining legal fees and expenses and its portion of all underwriting discounts, commissions and transfer taxes, if any, relating to the sale of its shares of Class A Common Stock under the Avenue Securityholders Agreement.

Termination

The Avenue Securityholders Agreement will terminate upon the first to occur of (i) Holdings’ dissolution, liquidation or winding-up; (ii) with respect to Avenue, when Avenue ceases to own Registrable Securities (as defined in the Avenue Securityholders Agreement) (assuming all of the then outstanding Convertible Notes held by Avenue have been converted into shares of Class A Common Stock) representing at least 30% of the Registrable Securities (assuming all of the then outstanding Convertible Notes held by Avenue have been converted into shares of Class A Common Stock ) acquired by Avenue in Debt Exchange Offering and thereafter and (iii) with respect to each Apollo Holder, when such Apollo Holder ceases to own any shares of common stock or Convertible Notes; provided, however, Avenue’s preemptive rights and tag-along rights with respect to equity issuances will not terminate until such time that Avenue owns less than $15 million aggregate principal amount of the Convertible Notes (or shares of Class A Common Stock issued upon conversion of such Convertible Notes or a combination thereof) it received in the Exchange Offers.

Investor Securityholders Agreements

On January 5, 2011, the Company, Holdings and certain affiliates of Apollo (Domus LLC, RCIV Holdings, RCIV Sarl, AIF VI LP and Domus Co-Invest LLC) entered into a securityholders agreement with each of York and WAMCO (each, a “New Holder”), respectively (each agreement, an “Investor Securityholders Agreement”), which became effective upon consummation of the Exchange Offers. Each New Holder received Convertible Notes in the Exchange Offers. The material terms of each Investor Securityholders Agreement are set forth below.

Preemptive Rights

Prior to a Qualified Public Offering, the New Holder has preemptive rights with respect to certain offerings by Holdings or the Company of equity. The New Holder’s preemptive rights do not apply to the Convertible Notes issued upon consummation of the Debt Exchange Offering or to the Class A Common Stock issued upon

 

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conversion thereof. If Holdings or the Company proposes to issue or sell any equity securities, or securities convertible into, issuable upon exercise of or exchangeable for any such equity securities (subject to certain customary exceptions), then each New Holder has the right to participate in any such issuance based on its pro rata equity ownership on a fully diluted basis.

Tag-Along Rights

If at any time, prior to the consummation of a Qualified Public Offering, certain Apollo entities propose to sell or transfer 5% or more of the outstanding shares of common stock on a fully diluted basis to any non-affiliated third party, other than in a Public Sale, the New Holder has the right, subject to certain conditions, to participate in such transfer on a pro rata basis.

Assignment

None of the rights granted to the New Holder under the Investor Securityholders Agreement may be assigned to any other party; provided that the New Holder may assign its rights under the Investor Securityholders Agreement to one of its affiliates if it provides (i) documentation reasonably acceptable to the Company certifying such affiliate’s status as a qualified institutional buyer or an institutional accredited investor and/or (ii) such other documentation or certifications as may be reasonably requested by the Company.

Amendment

The Investor Securityholders Agreement may be amended in writing by Holdings, the Company and Apollo; provided that, the Investor Securityholders Agreement may not be modified in a manner that is materially adverse to any New Holder without the approval of each New Holder.

Termination

The Investor Securityholders Agreement will terminate upon the first to occur of (i) Holdings’ dissolution, liquidation or winding-up, (ii) the consummation of a Qualified Public Offering, (iii) with respect to each New Holder, when such New Holder, collectively with its affiliates or funds or accounts managed by it, owns less than $15 million aggregate principal amount of the Convertible Notes (or shares of Class A Common Stock issued upon conversion of such Convertible Notes or a combination thereof) it received in the Exchange Offers and (iv) with respect to Apollo, when Apollo ceases to own shares of common stock or Convertible Notes.

Conversion Shares Agreement

On January 5, 2011, upon consummation of the Exchange Offers, Holdings and Realogy entered into an agreement pursuant to which Holdings agreed to, at Realogy’s option, issue and contribute shares of Class A Common Stock to Realogy or to holders of the Convertible Notes at Realogy’s direction upon conversion or exchange of the Convertible Notes in accordance with their terms and conditions.

Apollo Management Fee Agreement

In connection with the Merger Transactions, Apollo also entered into a management fee agreement with us which will allow Apollo and its affiliates to provide certain management consulting services to us through the end of 2016 (subject to possible extension). The agreement may be terminated at any time upon written notice to us from Apollo. We will pay Apollo an annual management fee for this service up to the sum of (1) the greater of $15 million or 2.0% of our annual Adjusted EBITDA for the immediately preceding year, plus out-of-pocket costs and expenses in connection therewith, plus (2) any deferred fees (to the extent such fees were within such amount in clause (1) above originally. The 2007 management fee was capped at $10.5 million. If Apollo elects to terminate the management fee agreement, as consideration for the termination of Apollo’s services under the

 

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agreement and any additional compensation to be received, we will agree 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). We agreed to indemnify Apollo and its affiliates and their directors, officers and representatives for potential losses relating to the services to be provided under the management fee agreement. Apollo waived any fees due to it under the management fee agreement in connection with the Debt Exchange Offering, the Senior Secured Credit Facility Amendment and the First and a Half Lien Notes offering.

During 2010, Realogy paid Apollo $15 million for the services rendered under this agreement during 2009. Realogy has recognized (but has not paid) $15 million of expense related to the management fee payable for services rendered during 2010.

Related Transactions with Apollo Portfolio Companies

On June 30, 2008, Affinion Group, Inc., a company controlled by Apollo, entered into an Assignment and Assumption Agreement (“AAA”) with Avis Budget Group, Wyndham Worldwide and Realogy. Prior to this transaction, Avis Budget Group, Wyndham Worldwide and Realogy had provided certain loyalty program-related benefits and services to credit card holders of a major financial institution and received a fee from this financial institution based on spending by the credit card holders. One-half of the loyalty program was deemed a contingent asset and contingent liability under the terms of the Separation Agreement, with Realogy being responsible for 62.5% of such half or 31.25% of the assets and liabilities under the entire program. Under the AAA, Affinion Group, Inc. assumed all of the liabilities and obligations of Avis Budget Group, Wyndham Worldwide and Realogy relating to the loyalty program, including the fulfillment of the then-outstanding loyalty program points obligations. In connection with the transaction, on the June 30, 2008 closing date, as consideration for Affinion Group, Inc.’s assignment and assumption of Realogy’s proportionate share (31.25%) of the fulfillment obligation relating to the loyalty program points outstanding as of the closing date, Realogy agreed to pay approximately $8 million in the aggregate, of which $2,343,750 was paid on July 1, 2008, $2,109,375 was paid on July 1, 2009, $2,031,250 was paid on June 30, 2010 and $1,484,375 is payable on June 30, 2011.

The Company has entered into certain transactions in the normal course of business with entities that are owned by affiliates of Apollo. During 2010, the Company recognized revenue related to these transactions of approximately $1 million in the aggregate.

Policies and Procedures for Review of Related Party Transactions

Pursuant to its written charter, our Audit Committee must review and approve all material related party transactions, which include any related party transactions that we would be required to disclose pursuant to Item 404 of Regulation S-K promulgated by the SEC. In determining whether to approve a related party transaction, our Audit Committee will consider a number of factors including whether the related party transaction is on terms and conditions no less favorable to us than may reasonably be expected in arm’s-length transactions with unrelated parties. In December 2008, the Audit Committee approved a written policy with respect to the approval of related party transactions, which was recently amended in March 2011. Under that policy, the Audit Committee delegated to the General Counsel or Chief Financial Officer the authority to approve certain related party transactions that do not require disclosure under Item 404 of Regulation S-K as well as

 

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related party transactions with portfolio companies of Apollo and other principal stockholders, provided the consideration to be paid or received by the portfolio company does not exceed $2.5 million and the transaction is in the ordinary course of business.

Director Independence

We are not a listed issuer whose securities are listed on a national securities exchange or in an inter-dealer quotation system which has requirements that a majority of the board of directors be independent. However, if we were a listed issuer whose securities were traded on the New York Stock Exchange and subject to such requirements, we would be entitled to rely on the controlled company exception contained in the NYSE Listing Manual, Section 303A.00 for the exception from the independence requirements related to the majority of our Board of Directors and for the independence requirements related to our Compensation Committee. Pursuant to NYSE Listing Manual, Section 303A.00, a company of which more than 50% of the voting power is held by an individual, a group or another company is exempt from the requirements that its board of directors consist of a majority of independent directors and that the compensation committee (and, if applicable, the nominating committee) of such company be comprised solely of independent directors. At March 1, 2011, Apollo Management VI, L.P. beneficially owned 98.7% of the outstanding common stock of Holdings which would qualify the Company as a controlled company eligible for exemption under the rule.

For a discussion of the independence of members of our Audit Committee, see “Item 10.—Directors, Executive Officers and Corporate Governance—Audit Committee.”

 

Item 14. Principal Accounting Fees and Services.

Pricewaterhouse Coopers LLP (“PwC”) has served as the Company’s independent auditors since May 11, 2009. Prior thereto, Deloitte & Touche LLP (“Deloitte”) served as the Company’s independent auditors. In addition to being retained as independent auditors to audit our consolidated financial statements, PwC provided various other services to us during 2009 and 2010. Similarly, we retained Deloitte to provide various services during 2009. The aggregate fees (in millions) billed for professional services by PwC in 2010 and PwC and Deloitte in 2009 were as follows:

 

     2010      2009  
            PwC      Deloitte (5)      Total  

Audit Fees (1)

   $ 4.2       $ 2.9       $ 0.7$         3.6   

Audit Related Fees (2)

     0.1         0.2         —           0.2   

Tax Fees (3)

     0.1         0.1         0.4         0.5   

All Other Fees (4)

     0.1         0.1         —           0.1   
                                   

Total

   $ 4.5       $ 3.3       $ 1.1$         4.4   
                                   

 

(1) Represents fees for the audit of our consolidated financial statements, in the case of PwC for 2010 and 2009, the audit of internal controls, the review of interim financial statements included in Form 10-Qs and other attest services primarily related to financial accounting consultations, comfort letters and SEC consents, regulatory and statutory audits and Franchise Disclosure Document filings in various states.
(2) Represents fees primarily related to statutory audits not required by state or regulations, accounting consultation for contemplated transactions and agreed-upon procedures.
(3) Represents fees related to tax compliance, tax consultation, tax advice and tax planning.
(4) Represents fees related to certain information technology advisory services.
(5) The Company incurred additional fees with Deloitte in 2009 after May 11, 2009 of $1.4 million primarily related to tax services.

During 2009, Avis Budget Group engaged Deloitte for tax and other services related to items arising under the Separation and Distribution Agreement. Realogy reimburses Avis Budget Group for 62.5% of the fees so

 

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incurred. The amount of tax and other fees reimbursed by the Company were approximately $1.9 and $0.1 million, respectively, for 2009. These amounts are not included in the amounts set forth in the above table.

In connection with the relocation services it provides to customers, Cartus, as an intermediary, often pays third party invoices to Deloitte and PwC at the direction of Cartus’ customers. These payments are not included in the amounts set forth in the above table.

The Company’s Audit Committee is responsible for appointing the Company’s independent auditor and approving the terms of the independent auditor’s services. The Audit Committee considers the non-audit services to be provided by the independent auditor in determining its independence.

The Audit Committee has adopted a policy for the pre-approval of all audit and permissible non-audit services to be provided by the independent auditor, as described below. The Audit Committee also adopted a policy prohibiting the Company from hiring the independent auditor’s personnel, if such person participated in the current annual audit, or the immediately preceding annual audit of the Company’s financial statements, and is being hired in a “financial reporting oversight role” as defined by the PCAOB.

All services performed by our independent auditors were pre-approved in accordance with the pre-approval policy and procedures adopted by the Audit Committee. This policy describes the permitted audit, audit-related, tax and other services (collectively, the “Disclosure Categories”) that the independent auditor may perform. The policy requires that prior to the beginning of each fiscal year, a description of the services (the “Service List”) anticipated to be performed by the independent auditor in each of the Disclosure Categories in the ensuing fiscal year be presented to the Audit Committee for approval.

Except as discussed below, any requests for audit, audit-related, tax and other services not contemplated by the Service List must be submitted to the Audit Committee for specific pre-approval, irrespective of the amount, and cannot commence until such approval has been granted. Normally, pre-approval is provided at regularly scheduled meetings of the Audit Committee. However, the authority to grant specific pre-approval between meetings, as necessary, has been delegated to the Chair of the Audit Committee. The Chair will update the full Audit Committee at the next regularly scheduled meeting for any interim approvals granted.

On a quarterly basis, the Audit Committee reviews the status of services and fees incurred year-to-date as compared to the Service List.

The policy contains a de minimis provision that operates to provide retroactive approval for permissible non-audit services under certain circumstances. No services were provided by PwC during 2010 or 2009 or Deloitte during 2009 under such provision.

 

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PART IV

 

Item 15. Exhibits, Financial Statements and Schedules.

(A)(1) and (2)    Financial Statements

The consolidated financial statements of the registrant listed in the “Index to Financial Statements” on page F-1 together with the reports of PricewaterhouseCoopers LLP and Deloitte & Touche LLP, independent auditors, are filed as part of this Annual Report.

(A)(3)    Exhibits

See Index to Exhibits.

(A)(4)    Consolidated Financial Statement Schedules

Schedule II—Valuation and Qualifying Accounts.

 

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SIGNATURES

Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on the 4 t h of March 2011.

 

REALOGY CORPORATION
(Registrant)
B Y :  

/ S /    R ICHARD A. S MITH        

Name:   Richard A. Smith
Title:   President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Smith , Anthony E. Hull and Marilyn J. Wasser , and each of them severally, his or her true and lawful attorney-in-fact with power of substitution and resubstitution to sign in his or her name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with this Annual Report on Form 10-K and any and all amendments hereto, as fully and for all intents and purposes as he or she might do or could do in person, and hereby ratifies and confirms all said attorneys-in-fact and agents, each acting alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons in the capacities and on the dates indicated below.

 

Name

  

Title

 

Date

/ S /    H ENRY R. S ILVERMAN        

Henry R. Silverman

  

Non-Executive Chairman of the Board

  March 4, 2011

/ S /    R ICHARD A. S MITH        

Richard A. Smith

  

President, Chief Executive Officer and Director (Principal Executive Officer)

  March 4, 2011

/ S /    A NTHONY E. H ULL        

Anthony E. Hull

  

Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)

  March 4, 2011

/ S /    D EA B ENSON        

Dea Benson

  

Senior Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer)

  March 4, 2011

/ S /    M ARC E. B ECKER        

Marc E. Becker

  

Director

  March 4, 2011

/ S /    V. A NN H AILEY        

V. Ann Hailey

  

Director

  March 4, 2011

 

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Name

  

Title

 

Date

/ S /    S COTT M. K LEINMAN        

Scott M. Kleinman

  

Director

  March 4, 2011

/ S /    M. A LI R ASHID        

M. Ali Rashid

  

Director

  March  4, 2011

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT

The registrant has not sent and, following the filing of this Annual Report on Form 10-K with the Securities and Exchange Commission, does not intend to send to its securityholders an annual report to securityholders or proxy material for the year ended December 31, 2010 or with respect to any annual or other meeting of securityholders.

 

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INDEX TO FINANCIAL STATEMENTS

 

     Page  

Reports of Independent Registered Public Accounting Firms

     F-2   

Consolidated Statements of Operations for the year ended December 31, 2010, December  31, 2009 and December 31, 2008

     F-4   

Consolidated Balance Sheets as of December 31, 2010 and as of December 31, 2009

     F-5   

Consolidated Statements of Cash Flows for the year ended December 31, 2010, December  31, 2009 and December 31, 2008

     F-6   

Consolidated Statements of Equity (Deficit) for the year ended December 31, 2010, December  31, 2009 and December 31, 2008

     F-7   

Notes to Consolidated Financial Statements

     F-8   

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of Realogy Corporation

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, equity and cash flows present fairly, in all material respects, the financial position of Realogy Corporation and its subsidiaries (the “Company”) at December 31, 2010 and 2009 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15 (A)(4) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A(T). Our responsibility is to express an opinion on these financial statements, on the financial statement schedule, and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers

Florham Park, New Jersey

March 4, 2011

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of Realogy Corporation

Parsippany, New Jersey

We have audited the consolidated statements of operations, equity (deficit) and cash flows of Realogy Corporation and subsidiaries (the “Company”) for the year ended December 31, 2008. Our audit also included the financial statement schedule listed in the Index at Item 15 for the year ended December 31, 2008. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements referred to above present fairly, in all material respects, the results of their operations and their cash flows for the year ended December 31, 2008 in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule for the year ended December 31, 2008, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which noncontrolling interests are identified, presented and disclosed.

/s/ Deloitte and Touche LLP

Parsippany, New Jersey

February 25, 2009   (February 16, 2010 as to the effect of the noncontrolling interest as discussed in Note 2)
  (March 4, 2011 as to the summarized financial information as discussed in Note 13)

 

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REALOGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions)

 

     Year Ended December 31,  
     2010     2009     2008  

Revenues

      

Gross commission income

   $ 2,965      $ 2,886      $ 3,483   

Service revenue

     700        621        737   

Franchise fees

     263        273        323   

Other

     162        152        182   
                        

Net revenues

     4,090        3,932        4,725   
                        

Expenses

      

Commission and other agent-related costs

     1,932        1,850        2,275   

Operating

     1,241        1,263        1,607   

Marketing

     179        161        207   

General and administrative

     238        250        236   

Former parent legacy costs (benefit), net

     (323     (34     (20

Restructuring costs

     21        70        58   

Merger costs

     1        1        2   

Impairment of intangible assets, goodwill and investments in unconsolidated entities

     —          —          1,789   

Depreciation and amortization

     197        194        219   

Interest expense/(income), net

     604        583        624   

Gain on extinguishment of debt

     —          (75     —     

Other (income)/expense, net

     (6     3        (9
                        

Total expenses

     4,084        4,266        6,988   
                        

Income (loss) before income taxes, equity in earnings and noncontrolling interests

     6        (334     (2,263

Income tax expense (benefit)

     133        (50     (380

Equity in (earnings) losses of unconsolidated entities

     (30     (24     28   
                        

Net loss

     (97     (260     (1,911

Less: Net income attributable to noncontrolling interests

     (2     (2     (1
                        

Net loss attributable to Realogy

   $ (99   $ (262   $ (1,912
                        

See Notes to Consolidated Financial Statements.

 

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REALOGY CORPORATION

CONSOLIDATED BALANCE SHEETS

(In millions)

 

     December 31,  
     2010     2009  

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 192      $ 255   

Trade receivables (net of allowance for doubtful accounts of $67 and $66)

     114        102   

Relocation receivables

     386        334   

Relocation properties held for sale

     21        —     

Deferred income taxes

     76        85   

Other current assets

     109        98   
                

Total current assets

     898        874   

Property and equipment, net

     186        211   

Goodwill

     2,611        2,577   

Trademarks

     732        732   

Franchise agreements, net

     2,909        2,976   

Other intangibles, net

     478        453   

Other non-current assets

     215        218   
                

Total assets

   $ 8,029      $ 8,041   
                

LIABILITIES AND EQUITY (DEFICIT)

    

Current liabilities:

    

Accounts payable

   $ 203      $ 96   

Securitization obligations

     331        305   

Due to former parent

     104        505   

Revolving credit facility and current portion of long-term debt

     194        32   

Accrued expenses and other current liabilities

     525        502   
                

Total current liabilities

     1,357        1,440   

Long-term debt

     6,698        6,674   

Deferred income taxes

     883        760   

Other non-current liabilities

     163        148   
                

Total liabilities

     9,101        9,022   
                

Commitments and contingencies (Notes 13 and 14)

    

Equity (deficit):

    

Common stock

     —          —     

Additional paid-in capital

     2,026        2,020   

Accumulated deficit

     (3,070     (2,971

Accumulated other comprehensive loss

     (30     (32
                

Total Realogy stockholder’s deficit

     (1,074     (983
                

Noncontrolling interests

     2        2   
                

Total equity (deficit)

     (1,072     (981
                

Total liabilities and equity (deficit)

   $ 8,029      $ 8,041   
                

See Notes to Consolidated Financial Statements.

 

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REALOGY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

     December 31,  
     2010     2009     2008  

Operating Activities

      

Net loss

   $ (97   $ (260   $ (1,911

Adjustments to reconcile net loss to net cash provided by operating activities:

      

Depreciation and amortization

     197        194        219   

Deferred income taxes

     131        (59     (380

Impairment of intangible assets, goodwill and investments in unconsolidated entities

     —          —          1,789   

Amortization and write-off of deferred financing costs and discount on unsecured notes

     30        29        30   

Gain on extinguishment of debt

     —          (75     —     

Gain on disposition of unconsolidated entities

     —          —          (5

Equity in (earnings) losses of unconsolidated entities

     (30     (24     28   

Other adjustments to net loss

     20        43        20   

Net change in assets and liabilities, excluding the impact of acquisitions and dispositions:

      

Trade receivables

     (9     40        (18

Relocation receivables

     (27     442        190   

Relocation properties held for sale

     43        22        161   

Other assets

     (6     19        45   

Accounts payable, accrued expenses and other current liabilities

     30        26        (57

Due (to) from former parent

     (403     (48     (7

Other, net

     3        (8     5   
                        

Net cash (used in) provided by operating activities

     (118     341        109   
                        

Investing Activities

      

Property and equipment additions

     (49     (40     (52

Net assets acquired (net of cash acquired) and acquisition-related payments

     (17     (5     (12

Net proceeds from sale of assets

     5        —          —     

Purchases of certificates of deposit

     (9     —          —     

Proceeds from the sale of property and equipment

     —          —          7   

Proceeds related to corporate aircraft sale leaseback and termination

     —          —          12   

Proceeds from the sale of a joint venture

     —          —          12   

Investment in unconsolidated entities

     —          —          (4

Change in restricted cash

     —          (2     10   

Other, net

     —          —          4   
                        

Net cash used in investing activities

     (70     (47     (23
                        

Financing Activities

      

Net change in revolving credit facility

     142        (515     515   

Proceeds from issuance of Second Lien Loans

     —          500        —     

Repayments made on term loan credit facility

     (32     (32     (32

Note payment for 2006 acquisition of Texas American Title Company

     —          —          (10

Net change in securitization obligations

     27        (410     (258

Debt issuance costs

     —          (11     —     

Other, net

     (13     (11     (16
                        

Net cash provided by (used in) financing activities

     124        (479     199   

Effect of changes in exchange rates on cash and cash equivalents

     1        3        (1
                        

Net increase (decrease) in cash and cash equivalents

     (63     (182     284   

Cash and cash equivalents, beginning of period

     255        437        153   
                        

Cash and cash equivalents, end of period

   $ 192      $ 255      $ 437   
                        

Supplemental Disclosure of Cash Flow Information

      

Interest payments (including securitization interest expense)

   $ 550      $ 487      $ 635   

Income tax payments (refunds), net

     7        6        —     

See Notes to Consolidated Financial Statements.

 

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REALOGY CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

(In millions)

 

    Realogy Stockholder’s Equity              
    Common Stock     Additional
Paid-In
Capital
    Accumulated
Deficit
    Accumulated
Other
Comprehensive
Loss
    Non-
controlling
Interests
    Total
Equity
(Deficit)
 
             
             
    Shares     Amount            

Balance at January 1, 2008

    —        $ —        $ 2,006      $ (797   $ (9   $ 3      $ 1,203   

Comprehensive loss:

             

Net loss

      —          —          (1,912     —          1     

Currency translation adjustment, net of tax expense of less than $1

    —          —          —          —          (8     —       

Unrealized loss on cash flow hedges, net of tax benefit of $8

    —          —          —          —          (11     —       

Additional minimum pension liability, net of tax benefit of $12

    —          —          —          —          (18     —       

Total comprehensive loss

    —          —          —          —          —          —          (1,948

Stock-based compensation related to Holdings awards

    —          —          7        —          —          —          7   

Dividends

      —          —          —          —          (2     (2
                                                       

Balance at December 31, 2008

    —        $ —        $ 2,013      $ (2,709   $ (46   $ 2      $ (740

Comprehensive loss:

             

Net loss

    —        $ —        $ —        $ (262   $ —        $ 2     

Currency translation adjustment, net of tax benefit of $4

    —          —          —          —          7        —       

Unrealized gain on cash flow hedges, net of tax expense of $5

    —          —          —          —          8        —       

Additional minimum pension liability, net of tax benefit of $1

    —          —          —          —          (1     —       

Total comprehensive loss

    —          —          —          —          —          —          (246

Stock-based compensation related to Holdings awards

    —          —          7        —          —          —          7   

Dividends

    —          —            —          —          (2     (2
                                                       

Balance at December 31, 2009

    —        $ —        $ 2,020      $ (2,971   $ (32   $ 2      $ (981
                                                       

Comprehensive loss:

             

Net loss

    —        $ —        $ —        $ (99   $ —        $ 2     

Unrealized gain on cash flow hedges, net of tax expense of $3

    —          —          —          —          5        —       

Additional minimum pension liability, net of tax benefit of $2

    —          —          —          —          (3     —       

Total comprehensive loss

    —          —          —          —          —          —          (95

Stock-based compensation related to Holdings awards

    —          —          6        —          —          —          6   

Dividends

    —          —          —          —          —          (2     (2
                                                       

Balance at December 31, 2010

    —        $ —        $ 2,026      $ (3,070   $ (30   $ 2      $ (1,072
                                                       

See Notes to Consolidated Financial Statements.

 

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REALOGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise noted, all amounts are in millions, except per share amounts)

 

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 to separate into four independent companies—one for each of Cendant’s real estate services, 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.

On December 15, 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. (collectively referred to as “Apollo”). The Merger was consummated on April 10, 2007. As of December 31, 2010, all of Realogy’s issued and outstanding common stock is currently owned by a direct wholly-owned subsidiary of Holdings, Domus Intermediate Holdings Corp. (“Intermediate”).

The Company incurred indebtedness in connection with the Merger which included borrowings under the Company’s senior secured credit facility, issuance of unsecured notes, an equity contribution and cash on hand. See Note 8, “Short and Long-Term Debt” for additional information on the indebtedness incurred related to the Merger and for additional information related to the senior secured leverage ratio that the Company is required to maintain. The equity contribution to the Company of $2,001 million was made by investment funds affiliated with Apollo and an investment fund of co-investors managed by Apollo, as well as members of the Company’s management who purchased Holdings common stock with cash or through rollover equity. The Company also refinanced the credit facilities covering the relocation securitization facilities (“the Securitization Facilities Refinancing”). The term “Merger Transactions” refer to, collectively, (1) the Merger, (2) the offering of unsecured notes, (3) the initial borrowings under the senior secured credit facility, including the synthetic letter of credit facility, (4) the equity investment, and (5) the Securitization Facilities Refinancing.

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America. All intercompany balances and transactions have been eliminated.

Business Description

The Company reports its operations in the following business 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 December 31, 2010, the Company’s franchise system had approximately 14,700 franchised and company owned offices and 264,000 independent sales associates operating under the Company’s brands in the U.S. and 99 other countries and territories around the world, which included approximately 750 company owned and operated brokerage offices with approximately 44,000 independent 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, the Company operates 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

 

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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.

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 December 31, 2010, the maximum ratio of total senior secured net debt to trailing 12-month Adjusted EBITDA, as defined in Note 8, “Short and Long-Term Debt”, was 5.0 to 1 and the ratio limit will step down to 4.75 to 1 on March 31, 2011 and thereafter. At December 31, 2010, the Company was in compliance with the senior secured leverage covenant with a senior secured leverage ratio of 4.59 to 1.

In January and February 2011, the Company restructured its indebtedness by completing a senior note exchange offering, amending and extending the senior secured credit facility and completing the issuance of first and a half lien notes. See Note 20, “Subsequent Events” for additional information related to the refinancing transactions noted above.

Based upon the Company’s financial forecast, 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. See Note 8, “Short and Long-Term Debt” for a description of the consequences of an event of default.

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CONSOLIDATION POLICY

Effective January 1, 2010, the Company adopted FASB’s amended guidance on the consolidation of Variable Interest Entities (“VIE”), in which the Company consolidates a VIE for which it is the primary beneficiary with a controlling financial interest. Also, the Company consolidates an entity not deemed a VIE if its ownership, direct or indirect, exceeds 50% of the outstanding voting shares of an entity and/or that it has the ability to control the financial or operating policies through its voting rights, board representation or other similar rights. For entities where the Company does not have a controlling interest (financial or operating), the investments in such entities are accounted for using the equity or cost method, as appropriate. The Company applies the equity method of accounting when it has the ability to exercise significant influence over operating and financial policies of an investee. The Company uses the cost method for all other investments.

Effective January 1, 2009, the Company adopted the FASB’s new guidance on noncontrolling interests which established requirements for ownership interests in subsidiaries held by parties other than the Company (“noncontrolling interest”) be clearly identified, presented and disclosed in the consolidated statement of financial position within equity, but separate from the parent’s equity. The presentation and disclosure requirements in the guidance were applied retrospectively to comparative financial statements. As a result of the implementation of this standard, the Company reclassified $2 million from Other non-current liabilities to a separate Noncontrolling Interests line in the Equity section of the Consolidated Balance Sheet as of December 31, 2008.

USE OF ESTIMATES

In presenting the 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.

 

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REVENUE RECOGNITION

Real Estate Franchise Services

The Company franchises its real estate brokerage franchise systems to real estate brokerage businesses that are independently owned and operated. The Company provides operational and administrative services, tools and systems to franchisees, which include national and local advertising programs, listing and agent-recruitment tools, training and volume purchasing discounts through the Company’s preferred vendor program. Franchise revenue principally consists of royalty and marketing fees from the Company’s franchisees. The royalty received is primarily based on a percentage of the franchisee’s gross commission income. Royalty fees are accrued as the underlying franchisee revenue is earned (upon close of the homesale transaction). Annual volume incentives given to certain franchisees on royalty fees are recorded as a reduction to revenue and are accrued for in relative proportion to the recognition of the underlying gross franchise revenue. Franchise revenue also includes initial franchise fees, which are generally non-refundable and recognized by the Company as revenue when all material services or conditions relating to the sale have been substantially performed (generally when a franchised unit opens for business). The Company also earns marketing fees from its franchisees and utilizes such fees to fund advertising campaigns on behalf of its franchisees.

Company Owned Real Estate Brokerage Services

As an owner-operator of real estate brokerages, the Company assists home buyers and sellers in listing, marketing, selling and finding homes. Real estate commissions earned by the Company’s real estate brokerage business are recorded as revenue on a gross basis upon the closing of a real estate transaction (i.e., purchase or sale of a home), which are referred to as gross commission income. The commissions the Company pays to real estate agents are recognized concurrently with associated revenues and presented as commission and other agent-related costs line item on the accompanying Consolidated Statements of Operations.

Relocation Services

The Company provides relocation services to corporate and government clients for the transfer of their employees. Such services include the purchasing and/or selling of a transferee’s home, providing home equity advances to transferees (generally guaranteed by the client), expense processing, arranging household goods moving services, home-finding and other related services. The Company earns revenues from fees charged to clients for the performance and/or facilitation of these services and recognizes such revenue as services are provided, except for limited instances in which the Company assumes the risk of loss on the sale of a transferring employee’s home (“at-risk”). In such cases, revenues are recorded as earned with associated costs recorded within operating expenses. In the majority of relocation transactions, the gain or loss on the sale of a transferee’s home is generally borne by the client. However, there are limited instances in which the Company assumes the risk of loss. Under “at-risk” contracts the Company records the value of the home on its Consolidated Balance Sheets within the relocation properties held for sale line item at the lower of cost or net realizable value less estimated direct costs to sell. The difference between the actual purchase price and proceeds received on the sale of the home is recorded within operating expenses on the Company’s Consolidated Statements of Operations and the gain or loss was not material for any period presented. The aggregate selling price of such homes was $170 million, $45 million and $571 million for the years ended December 31, 2010, 2009 and 2008, respectively.

Additionally, the Company generally earns interest income on the funds it advances on behalf of the transferring employee, which is recorded within other revenue (as is the corresponding interest expense on the securitization obligations) in the accompanying Consolidated Statements of Operations. The Company also earns referral revenue from real estate brokers, which is recognized at the time the underlying property closes, and revenues from other third-party service providers where the Company earns a referral fee or commission, which is recognized at the time of completion of services.

 

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Title and Settlement Services

The Company provides title and closing services, which include title search procedures for title insurance policies, homesale escrow and other closing services. Title revenues, which are recorded net of amounts remitted to third party insurance underwriters, and title and closing service fees are recorded at the time a homesale transaction or refinancing closes. The Company also owns an underwriter of title insurance. For independent title agents, the underwriter recognizes policy premium revenue on a gross basis (before deduction of agent commission) upon notice of policy issuance from the agent. For affiliated title agents, the underwriter recognizes the incremental policy premium revenue upon the effective date of the title policy as the agent commission revenue is already recognized by the affiliated title agent.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company estimates the allowance necessary to provide for uncollectible accounts receivable. The estimate is based on historical experience, combined with a review of current developments and includes specific accounts for which payment has become unlikely. The process by which the Company calculates the allowance begins in the individual business units where specific problem accounts are identified and reserved and an additional reserve is recorded driven by the age profile of the receivables.

ADVERTISING EXPENSES

Advertising costs are generally expensed in the period incurred. Advertising expenses, recorded within the marketing expense line item on the Company’s Consolidated Statements of Operations, were approximately $156 million, $161 million and $191 million for the years ended December 31, 2010, 2009 and 2008, respectively.

INCOME TAXES

The Company’s operations were included in the consolidated federal tax return of Cendant up to the date of Separation. In addition, the Company filed consolidated and unitary state income tax returns with Cendant in jurisdictions where required or permitted. The income taxes associated with the Company’s inclusion in Cendant’s consolidated federal and state income tax returns are included in the due to former parent line item on the accompanying Consolidated Balance Sheets.

The Company’s provision for income taxes is determined using the asset and liability method, under which deferred tax assets and liabilities are calculated based upon the temporary differences between the financial statement and income tax bases of assets and liabilities using currently enacted tax rates. These differences are based upon estimated differences between the book and tax basis of the assets and liabilities for the Company. Certain tax assets and liabilities of the Company may be adjusted in connection with the finalization of income tax audits.

The Company’s deferred tax assets are recorded net of a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion or all of the recorded deferred tax balances will not be realized in future periods. Decreases to the valuation allowance are recorded as reductions to the Company’s provision for income taxes and increases to the valuation allowance result in additional provision for income taxes. However, if the valuation allowance was adjusted in connection with an acquisition, such adjustment had historically been recorded through goodwill rather than the provision for income taxes. With the adoption of the FASB’s revised guidance related to business combinations on January 1, 2009, these adjustments are included in the income tax provision.

CASH AND CASH EQUIVALENTS

The Company considers highly-liquid investments with remaining maturities not exceeding three months at the date of purchase to be cash equivalents.

 

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RESTRICTED CASH

Restricted cash primarily relates to amounts specifically designated as collateral for the repayment of outstanding borrowings under the Company’s securitization facilities. Such amounts approximated $13 million at December 31, 2010 and 2009 and are primarily included within Other current assets on the Company’s Consolidated Balance Sheets.

DERIVATIVE INSTRUMENTS

The Company records derivatives and hedging activities on the balance sheet at their respective fair values. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument is dependent upon whether the derivative has been designated and qualifies as part of a hedging relationship, and further, on the type of hedging relationship.

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 chosen not to elect hedge accounting for these forward contracts; therefore, any change in fair value is recorded in the Consolidated Statements of Operations. The fluctuations in the value of these forward contracts do, however, generally offset the impact of changes in the value of the underlying risk that they are intended to economically hedge.

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 a new 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.

INVESTMENTS

At December 31, 2010 and 2009, the Company had various equity method investments aggregating $48 million and $45 million, respectively, which are primarily recorded within other non-current assets on the accompanying Consolidated Balance Sheets. Included in such investments is a 49.9% interest in PHH Home Loans, a mortgage origination venture formed in 2005. This venture enables the Company to participate in the earnings generated from mortgages originated by customers of its real estate brokerage and relocation businesses. The Company’s maximum exposure to loss with respect to its investment in PHH Home Loans is limited to its equity investment of $43 million at December 31, 2010. See Note 13, “Separation Adjustments, Transactions with Former Parent and Subsidiaries and Related Parties” for a more detailed description of the Company’s relationship with PHH Home Loans.

PROPERTY AND EQUIPMENT

Property and equipment (including leasehold improvements) are initially recorded at cost, net of accumulated depreciation and amortization. Depreciation, recorded as a component of depreciation and amortization on the Consolidated Statements of Operations, is computed utilizing the straight-line method over the estimated useful lives of the related assets. Amortization of leasehold improvements, also recorded as a component of depreciation and amortization, is computed utilizing the straight-line method over the estimated benefit period of the related assets or the lease term, if shorter. Useful lives are 30 years for buildings, up to 20 years for leasehold improvements, and from 3 to 7 years for furniture, fixtures and equipment.

 

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The Company capitalizes the costs of software developed for internal use which commences during the development phase of the project. The Company amortizes software developed or obtained for internal use on a straight-line basis, from 3 to 10 years, when such software is substantially ready for use. The net carrying value of software developed or obtained for internal use was $76 million and $85 million at December 31, 2010 and 2009, respectively.

IMPAIRMENT OF GOODWILL, INTANGIBLE ASSETS AND OTHER LONG-LIVED ASSETS

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 forecasting process. Each of the Company’s operating segments represents a reporting unit.

The Company assesses goodwill for impairment by first comparing the carrying value of each reporting unit to its fair value using the present value of expected future cash flows. If the fair value is less than the carrying value, then the Company would perform a second test for that reporting unit to determine the amount of impairment loss, if any. The Company determines the fair value of its reporting units utilizing the Company’s best estimate of future revenues, operating expenses, cash flows, market and general economic conditions as well as assumptions that it believes marketplace participants would utilize, including discount rates, cost of capital, and long term growth rates. When available and as appropriate, the Company uses comparative market multiples and other factors to corroborate the discounted cash flow results. Other indefinite-lived intangible assets are tested for impairment and written down to fair value.

During the fourth quarter of 2010 and 2009, the Company performed its annual impairment analysis of goodwill and unamortized intangible assets. Based upon the analysis performed, there was no impairment. Management evaluated the effect of lowering the estimated fair value for each of the reporting units by 10% and determined that no impairment of goodwill would have been recognized under this evaluation for 2010 or 2009.

During the fourth quarter of 2008, the Company recorded an impairment charge of $1,739 million ($1,523 million net of income tax benefit). Also in 2008, the Company recorded impairment charges of $50 million related to investments in unconsolidated entities as a result of lower long-term financial forecasts and a higher weighted average cost of capital.

The Company evaluates the recoverability of its other long-lived assets, including amortizable intangible assets, if circumstances indicate an impairment may have occurred. This analysis is performed by comparing the respective carrying values of the assets to the current and expected future cash flows, on an undiscounted basis, to be generated from such assets. Property and equipment is evaluated separately within each business unit. If such analysis indicates that the carrying value of these assets is not recoverable, then the carrying value of such assets is reduced to fair value through a charge to the Company’s Consolidated Statements of Operations. There were no impairments relating to other long-lived assets, including amortizable intangible assets, during 2010, 2009 or 2008.

SUPPLEMENTAL CASH FLOW INFORMATION

Significant non-cash transactions in 2010 and 2009 included the Company’s election to satisfy the interest payment obligation by issuing $51 million and $57 million, respectively of Senior Toggle Notes which resulted in non-cash transfers between accrued interest and long-term debt.

Significant non-cash transactions in 2008 included the sale of the corporate aircraft, which resulted in the termination of a capital lease for $26 million. Also in 2008, the Company elected to satisfy the interest payment obligation by issuing $32 million of Senior Toggle Notes which resulted in a non-cash transfer between accrued interest and long-term debt.

 

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STOCK-BASED COMPENSATION

The Company uses the Black-Scholes option pricing model to estimate the fair value of time vested stock options and a lattice based valuation model to estimate the fair value of performance based awards on the date of grant which requires certain estimates by management including the expected volatility and expected term of the option. Management also makes decisions regarding the risk-free interest rate used in the models and makes estimates regarding forfeiture rates. Fluctuations in the market that affect these estimates could have an impact on the resulting compensation cost. For non-performance based employee stock awards, the fair value of the compensation cost is recognized on a straight-line basis over the requisite service period of the award. Compensation cost for restricted stock (non-vested stock) is recorded based on its market value on the date of grant and is expensed in the Company’s Consolidated Statements of Operations ratably over the vesting period.

FINANCIAL INSTRUMENTS

Effective January 1, 2008, the Company adopted the fair value measurement guidance issued by the FASB. The guidance clarifies the definition of fair value, prescribes methods for measuring fair value, establishes a fair value hierarchy based on the inputs used to measure fair value, and expands disclosures about the use of fair value measurements. The adoption of the guidance did not have a material impact on the Company’s fair value measurements.

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

 

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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.

In December 2010, the FASB issued guidance to clarify when to perform step two of the goodwill impairment test for reporting units with zero or negative carrying amounts. In certain situations, a reporting unit may have a negative carrying amount, particularly for companies that only have a single reporting unit and have significant debt. In that case, since the first step is passed, the negative carrying amount may shield a potential impairment. The guidance requires that reporting units with a zero or negative carrying value should proceed to step two of the impairment test if there are qualitative factors indicating that it is more likely than not that a goodwill impairment exists. This guidance is effective for all interim and annual reporting periods beginning after December 15, 2010. The Company intends to adopt the guidance beginning January 1, 2011 and does not believe that the adoption will have a significant impact on its consolidated financial statements.

In December 2010, the FASB issued guidance to clarify the disclosure of supplementary pro forma information for business combinations. Current guidance on “Business Combinations” requires disclosure of revenue and earnings of the combined entity as if the acquisition had occurred as of the beginning of both the current period and the comparable prior year reporting period. However, presenting pro forma results as if the acquisition occurred at the beginning of each annual period inappropriately results in certain adjustments, like amortization expense of intangible assets with useful lives of less than two years, being included in the pro forma results of both reporting periods. The new guidance therefore requires the pro forma information to be prepared as if the acquisition occurred as of the beginning of the comparable prior period and is applied prospectively for acquisitions consummated after the beginning of the fiscal year beginning on or after December 15, 2010. The Company intends to adopt the guidance beginning January 1, 2011 and does not believe that the adoption will have a significant impact on its consolidated financial statements.

 

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.

In connection with the Company’s acquisition of real estate brokerage operations, the Company obtains contractual pendings and listings intangible assets, which represent the estimated fair value of homesale transactions that are pending closing or homes listed for sale by the acquired brokerage operations. Pendings and listings intangible assets are amortized over the estimated closing period of the underlying contracts and homes listed for sale, which in most cases, is approximately 5 months. In accordance with current accounting guidance, the contingent consideration liability is adjusted to its fair value at each reporting period.

 

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2010 ACQUISITIONS

On January 21, 2010, the Company completed the stock acquisition of Primacy for the assumption of approximately $26 million of indebtedness (excluding $9 million of indebtedness related to the sale of relocation receivables).

Primacy was 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”.

During the year ended December 31, 2010, the Company acquired nine real estate brokerage operations through its wholly-owned subsidiary, NRT, for a total consideration of $24 million. These acquisitions resulted in goodwill of $20 million and $2 million of pendings and listings intangible assets that was assigned to the Company Owned Real Estate Brokerage Services segment.

None of the 2010 acquisitions were significant to the Company’s results of operations, financial position or cash flows individually or in the aggregate.

2009 ACQUISITIONS

During the year ended December 31, 2009, the Company acquired seven real estate brokerage operations through its wholly-owned subsidiary, NRT, for a total consideration of approximately $4 million. These acquisitions resulted in goodwill of $4 million that was assigned to the Company Owned Real Estate Brokerage Services segment.

None of the 2009 acquisitions were significant to the Company’s results of operations, financial position or cash flows individually or in the aggregate.

2008 ACQUISITIONS

During the year ended December 31, 2008, the Company acquired six real estate brokerage operations through its wholly-owned subsidiary, NRT, for approximately $3 million of cash. These acquisitions resulted in goodwill of $2 million that was assigned to the Company Owned Real Estate Brokerage Services segment.

None of the 2008 acquisitions were significant to the Company’s results of operations, financial position or cash flows individually or in the aggregate.

 

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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
 

Goodwill balance at January 1, 2008

     2,260        766        596        317        3,939   

Goodwill acquired and purchase accounting adjustments (a)

     5        (8     (5     (4     (12

2008 Impairment

     (709     (158     (247     (241     (1,355
                                        

Balance at December 31, 2008

     1,556        600        344        72        2,572   

Goodwill acquired

     —          4        —          1        5   
                                        

Balance at December 31, 2009

     1,556        604        344        73        2,577   

Goodwill acquired (b)

     —          20        16        —          36   

Goodwill reduction for locations sold

     —          (2     —          —          (2
                                        

Balance at December 31, 2010

   $ 1,556      $ 622      $ 360      $ 73      $ 2,611   
                                        

Goodwill and accumulated impairment summary

          

Goodwill

   $ 2,265      $ 780      $ 641      $ 397      $ 4,083   

Accumulated impairment losses

     (709     (158     (281     (324     (1,472
                                        

Balance at December 31, 2010

   $ 1,556      $ 622      $ 360      $ 73      $ 2,611   
                                        

 

(a) Represents $13 million of fair value adjustments related to the merger with affiliates of Apollo Management, L.P. that was consummated on April 10, 2007, offset by less than $2 million for acquisitions of real estate brokerages by NRT.
(b) The increase in goodwill relates to acquisitions of real estate brokerages and the acquisition of Primacy.

During the fourth quarter of 2010 and 2009, the Company performed its annual impairment analysis of goodwill and unamortized intangible assets. These analyses resulted in no impairment charges.

During the fourth quarter of 2008, the Company performed its annual impairment analysis of goodwill and unamortized intangible assets. This analysis resulted in an impairment charge of $1,739 million ($1,523 million net of income tax benefit). The impairment charge reduced intangible assets by $384 million and reduced goodwill by $1,355 million. The impairment charge impacted the Real Estate Franchise Services segment by $953 million, the Company Owned Real Estate Brokerage Services segment by $162 million, the Relocation Services segment by $335 million and the Title and Settlement Services segment by $289 million.

During the fourth quarter of 2007, the Company performed its annual impairment analysis of goodwill and unamortized intangible assets. This analysis resulted in an impairment charge of $667 million ($445 million net of income tax benefit). The impairment charge reduced intangible assets by $550 million and reduced goodwill by $117 million. The impairment charge impacted the Real Estate Franchise Services segment by $513 million, the Relocation Services segment by $40 million and the Title and Settlement Services segment by $114 million.

 

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Intangible assets are as follows:

 

    As of December 31, 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      $ 255      $ 1,764      $ 2,019      $ 188      $ 1,831   

Unamortizable—Franchise agreement (b)

    1,145        —          1,145        1,145        —          1,145   
                                               

Total Franchise Agreements

  $ 3,164      $ 255      $ 2,909      $ 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) (i)

    529        107        422        467        70        397   

Amortizable—Pendings and listings (f)

    2        1        1        1        1        —     

Unamortizable—Title plant shares (g)

    10        —          10        10        —          10   

Amortizable—Other (h) (i)

    12        9        3        7        3        4   
                                               

Total Other Intangibles

  $ 598      $ 120      $ 478      $ 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) Amortized over the estimated closing period of the underlying contracts (in most cases five months).
(g) 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.
(h) Generally amortized over periods ranging from 2 to 10 years.
(i) The acquisition of Primacy increased customer relationships intangibles by $62 million and other intangibles by $5 million.

Intangible asset amortization expense is as follows:

 

     For the Year Ended December 31,  
         2010      2009      2008      

Franchise agreements

   $ 67       $   67       $   67   

License agreement

     —           1         1   

Customer relationships

     37         25         26   

Pendings and listings

     1         1         1   

Other

     6         1         2   
                          

Total

   $ 111       $ 95       $ 97   
                          

Based on the Company’s amortizable intangible assets as of December 31, 2010, the Company expects related amortization expense to be approximately $108 million, $106 million, $105 million, $105 million, $95 million and $1,713 million in 2011, 2012, 2013, 2014, 2015 and thereafter, respectively.

 

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5. FRANCHISING AND MARKETING ACTIVITIES

Franchise fee revenue includes domestic initial franchise fees and international area development fees of $6 million, $6 million, and $12 million for the year ended December 31, 2010, December 31, 2009 and December 31, 2008, respectively. In addition, franchise fee revenue is net of annual volume incentives provided to real estate franchisees of $24 million, $25 million and $34 million, respectively. The Company’s real estate franchisees may receive volume incentives on their royalty payments. Such annual incentives are based upon the amount of commission income earned and paid during a calendar year. Each brand has several different annual incentive schedules currently in effect.

The Company’s wholly-owned real estate brokerage services segment, NRT, continues to pay royalties to the Company’s franchise business; however, such amounts are eliminated in consolidation. NRT paid royalties to the Real Estate Franchise Services segment of $206 million for the year ended December 31, 2010, $202 million for the year ended December 31, 2009 and $237 million for the year ended December 31, 2008.

Marketing fees are generally paid by the Company’s real estate franchisees and are calculated based on a specified percentage of gross closed commissions earned on the sale of real estate, subject to certain minimum and maximum payments. Such fees are recorded within Other revenues on the accompanying Consolidated Statements of Operations. As provided for in the franchise agreements and generally at the Company’s discretion, all of these fees are to be expended for marketing purposes.

The number of franchised and company owned outlets in operation are as follows:

 

     (Unaudited)
As of December 31,
 
     2010      2009      2008  

Franchised:

        

Century 21 ®

     7,955         7,711         8,501   

ERA ®

     2,488         2,621         2,762   

Coldwell Banker ®

     2,583         2,648         2,786   

Coldwell Banker Commercial ®

     181         212         226   

Sotheby’s International Realty ®

     531         470         480   

Better Homes and Gardens ® Real Estate

     201         103         39   
                          
     13,939         13,765         14,794   
                          

Company Owned:

        

ERA ®

     11         11         28   

Coldwell Banker ®

     669         676         722   

Sotheby’s International Realty ®

     31         36         44   

Corcoran ® /Other

     35         35         41   
                          
     746         758         835   
                          

 

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The number of franchised and company owned outlets (in the aggregate) changed as follows:

 

     (Unaudited)
For  the Year Ended December 31,
 
         2010             2009             2008      

Franchised:

      

Beginning balance

     13,765        14,794        14,763   

Additions

     1,269        452        1,327   

Terminations

     (1,095     (1,481     (1,296
                        

Ending Balance

     13,939        13,765        14,794   
                        

Company Owned:

      

Beginning balance

     758        835        939   

Additions

     20        7        5   

Closures

     (32     (84     (109
                        

Ending Balance

     746        758        835   
                        

As of December 31, 2010, there were an insignificant amount of franchise agreements that have been executed, but for which offices are not yet operating. Additionally, as of December 31, 2010, there were an insignificant number of franchise agreements pending termination.

In connection with ongoing fees the Company receives from its franchisees pursuant to the franchise agreements, the Company is required to provide certain services, such as training and marketing. In order to assist franchisees in converting to one of the Company’s brands or in franchise expansion, the Company may also, at its discretion, provide conversion notes to franchisees who are either new or who are expanding their operations. Prior to 2009, the Company issued development advance notes. Provided the franchisee meets certain minimum annual revenue thresholds during the term of the notes, and is in compliance with the terms of the franchise agreement, the amount of the note is forgiven annually in equal ratable amounts over the life of the franchise agreement. Otherwise, related principal is due and payable to the Company. The amount of such franchisee conversion notes and development advance notes were $85 million, net of $20 million of reserves, and $78 million, net of $28 million of reserves, at December 31, 2010 and 2009, respectively. These notes are principally classified within Other non-current assets in the Company’s Consolidated Balance Sheets. The Company recorded an income statement charge related to the forgiveness of these notes of $13 million, $13 million and $16 million for the years ended December 31, 2010, December 31, 2009 and December 31, 2008, respectively.

 

6. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of:

 

     December 31,  
     2010     2009  

Furniture, fixtures and equipment

   $ 161      $ 167   

Capitalized software

     208        174   

Building and leasehold improvements

     127        121   

Land

     4        4   
                
     500        466   

Less: accumulated depreciation and amortization

     (314     (255
                
   $ 186      $ 211   
                

 

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The Company recorded depreciation and amortization expense related to property and equipment of $86 million, $99 million and $122 million for the years ended December 31, 2010, 2009 and 2008, respectively.

 

7. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of:

 

     December 31,  
     2010      2009  

Accrued payroll and related employee costs

   $ 93       $ 78   

Accrued volume incentives

     17         18   

Accrued commissions

     15         19   

Restructuring accruals

     36         47   

Deferred income

     76         64   

Accrued interest

     112         125   

Relocation services home mortgage obligations

     16         —     

Other

     160         151   
                 
     $525       $ 502   
                 

 

8. SHORT AND LONG-TERM DEBT

Total indebtedness is as follows:

 

     December 31,  
     2010      2009  

Senior Secured Credit Facility:

     

Revolving credit facility

   $ —         $ —     

Term loan facility

     3,059         3,091   

Second Lien Loans

     650         650   

Other bank indebtedness

     163         —     

Senior Notes (1)

     1,688         1,686   

Senior Toggle Notes (2)

     468         416   

Senior Subordinated Notes (3)

     864         863   

Securitization Obligations:

     

Apple Ridge Funding LLC

     296         281   

Cartus Financing Limited

     35         —     

U.K. Relocation Receivables Funding Limited

     —           24   
                 
   $ 7,223       $ 7,011   
                 

 

(1) Consists of $1,700 million of 10.50% Senior Notes due 2014, less a discount of $12 million.
(2) Consists of $470 million of 11.00%/11.75% Senior Toggle Notes due 2014, less a discount of $2 million.
(3) Consists of $875 million of 12.375% Senior Subordinated Notes due 2015, less a discount of $11 million.

Debt Exchange Offering, Senior Secured Credit Facility Amendment and First and a Half Lien Notes Offering

In January and February 2011, the Company restructured its indebtedness by completing an unsecured senior note exchange offering, amending and extending its senior secured credit facility and completing the issuance of first and a half lien notes. See Note 20, “Subsequent Events” for additional information related to these refinancing transactions.

 

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Senior Secured Credit Facility

In connection with the closing of the Merger on April 10, 2007, the Company entered into a senior secured credit facility consisting 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 (or accordion) 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.

The Company’s senior secured credit facility provides for a six-year, $750 million revolving credit facility, which includes a $200 million letter of credit sub-facility and a $50 million swingline loan sub-facility. The Company uses the revolving credit facility for, among other things, working capital and other general corporate purposes, including permitted acquisitions and investments. 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 Company’s senior secured credit facility initially provided for a six-and-a-half-year $525 million synthetic letter of credit facility which is 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 December 31, 2010, the $257 million of capacity is being utilized by a $123 million letter of credit with Cendant for any remaining potential contingent obligations and $100 million of letters of credit for general corporate purposes. On January 5, 2011, the capacity of the synthetic letter of credit facility was reduced to $223 million.

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 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 in arrears 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 on December 31, 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

 

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bank indebtedness not secured by a first lien on the Company’s assets, securitization obligations, First and a Half Lien Notes or the Unsecured Notes (as 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.

Based upon the Company’s financial forecast, 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. While the housing market in 2010 showed signs of stabilization, there remains substantial uncertainty with respect to the timing and scope of a housing recovery and if a housing recovery is delayed or is weak, the Company may be subject to additional pressure in maintaining compliance with its senior secured leverage ratio. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition, Liquidity and Capital Resources – EBITDA and Adjusted EBITDA” for the detailed covenant calculation.

The Company has the right to cure 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 the Company is unable to maintain compliance with the senior secured leverage ratio and 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. Other events of default under the senior secured credit facility include, without limitation, nonpayment, material misrepresentations, insolvency, bankruptcy, certain material judgments, change of control and cross-events of default on material indebtedness.

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

 

   

would not be required to lend any additional amounts to the Company;

 

   

could elect to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be due and payable;

 

   

could require the Company to apply all of its available cash to repay these borrowings; or

 

   

could prevent the Company from making payments on the Unsecured Notes;

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

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

Other Bank Indebtedness

During the first six months of 2010, the Company entered into five separate revolving credit facilities to borrow up to $155 million. These facilities bear interest at a weighted average rate of LIBOR plus 1.6% or 3% as of December 31, 2010. The facilities are subject to a minimum interest rate of LIBOR plus 1.4% and interest

 

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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 December 31, 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 December 31, 2010, the Company has borrowed $163 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

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

The 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 or 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. 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 and as a result of the reduction in the amount of Senior Toggle Notes outstanding following the Exchange Offers, the Company would be required to repay approximately $14 million in April 2012 in accordance with the indenture governing the Senior Toggle Notes.

The 12.375% 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.

 

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As of December 31, 2010, the Company’s Existing Notes contained various covenants that limited the Company’s 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 the Company’s stockholders;

 

   

repurchase or redeem capital stock or subordinated indebtedness;

 

   

make loans, investments or acquisitions;

 

   

incur restrictions on the ability of certain of the Company’s subsidiaries to pay dividends or to make other payments to the Company;

 

   

enter into transactions with affiliates;

 

   

create liens;

 

   

merge or consolidate with other companies or transfer all or substantially all of the Company’s 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 o f the Debt Exchange Offereing, we amended the terms of the indentures governing the 10.50% Senior Notes and the Senior Toggle Notes to remove substantially all of the restrictive covenants and certain other provisions previously contained in those indentures. We also issued Extended Maturity Notes with substantially similar covenants as contained in the Existing Notes prior to such amendments as more fully described in Note 20, “Subsequent Events”.

The 10.50% Senior Notes and Senior Toggle Notes are guaranteed on an unsecured senior basis, and the 12.375% 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. The 10.50% Senior Notes and Senior Toggle Notes are also guaranteed on an unsecured senior subordinated basis, and the 12.375% Senior Subordinated Notes are guaranteed on an unsecured junior subordinated basis, in each case, by Holdings.

Senior Toggle Note Exchange

On September 24, 2009, the Company and certain affiliates of Apollo entered into an agreement with a third party pursuant to which the Company 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 borrowing arrangements through Apple Ridge Funding LLC and Cartus Financing Limited. These entities 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.

 

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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 $393 million and $364 million of underlying relocation receivables and other related relocation assets at December 31, 2010 and 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 Consolidated Balance Sheets.

Interest incurred in connection with borrowings under these facilities amounted to $7 million for the year ended December 31, 2010, $12 million for the year ended December 31, 2009 and $46 million for the year ended December 31, 2008. This interest is recorded within net revenues in the accompanying 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 2.4%, 2.3% and 4.9% for the year ended December 31, 2010, 2009 and 2008, respectively.

Apple Ridge Funding LLC

The Apple Ridge Funding LLC securitization program is a revolving program with a five-year term expiring in April 2012. This bankruptcy remote vehicle borrows from one or more commercial paper conduits and uses the proceeds to purchase the relocation assets. This asset-backed commercial paper program is guaranteed by the sponsoring financial institutions. This program is subject to termination at the end of the five-year agreement and, if not renewed, would amortize. The program 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 the senior secured credit facility, the Unsecured Notes and other material indebtedness. Given the current economic conditions, there is an associated risk relating to compliance with the Apple Ridge securitization performance trigger relating to limits on “net credit losses” (the estimated losses incurred on securitization receivables that have been written off, net of recoveries of such receivables), as net credit losses may not exceed $750 thousand in any one month or $1.5 million in any trailing 12-month period. The Company has not incurred any net credit losses in excess of these thresholds. These trigger events could result in an early amortization of this securitization obligation and termination of any further advances under the program

Cartus Financing Limited

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.

U.K. Relocation Receivables Funding Limited

On August 23, 2010, the Company terminated the U.K. Relocation Receivables Funding Limited securitization program in its entirety. Historically, the U.K. Relocation Receivables Funding Limited securitization program was utilized to finance relocation receivables and related assets with certain U.K. government and corporate clients.

 

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Available Capacity

As of December 31, 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       $ —         $ 571   

Term loan facility (2)

     October 2013         3,059         3,059         —     

Second Lien Loans

     October 2017         650         650         —     

Other bank indebtedness (3)

     Various         163         163         —     

Senior Notes (4)

     April 2014         1,700         1,688         —     

Senior Toggle Notes (5)

     April 2014         470         468         —     

Senior Subordinated Notes (6)

     April 2015         875         864         —     

Securitization obligations: (7)

           

Apple Ridge Funding LLC

     April 2012         500         296         204   

Cartus Financing Limited (8)

     Various         62         35         27   
                             
      $ 8,229       $ 7,223       $ 802   
                             

 

(1) The available capacity under this facility was reduced by $179 million of outstanding letters of credit at December 31, 2010.
(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 3.29% at December 31, 2010.
(3) Consists of revolving credit facilities that are supported by letters of credit issued under the senior secured credit facility, $5 million is due in April 2011, $50 million is due in June 2011, $50 million due November 2011, $50 million is due in January 2013 and $8 million due in May 2015.
(4) Consists of $1,700 million of 10.50% Senior Notes due 2014, less a discount of $12 million.
(5) Consists of $470 million of 11.00%/11.75% Senior Toggle Notes due 2014, less a discount of $2 million.
(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 which expires in August 2015 and a £5 million working capital facility which expires in August 2011.

In January and February 2011, the Company restructured its indebtedness by completing a senior note exchange offering, amending and extending the senior secured credit facility and completing the issuance of first and a half lien notes. See Note 20, “Subsequent Events” for a pro forma debt table and debt maturities table reflecting the refinancing transactions noted above as of December 31, 2010.

 

9. EMPLOYEE BENEFIT PLANS

DEFINED BENEFIT PENSION PLAN

At December 31, 2010 and 2009, the accumulated benefit obligation of this plan was $135 million and $125 million, respectively, and the fair value of the plan assets were $91 million and $86 million, respectively, resulting in an unfunded accumulated benefit obligation of $44 million and $39 million, respectively, which is recorded in Other non-current liabilities in the Consolidated Balance Sheets. Participation in this plan was frozen as of July 1, 1997. The projected benefit obligation of this plan is equal to the accumulated benefit obligation as the majority of the employees participating in this plan are no longer accruing benefits.

 

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The following tables show the changes in benefit obligation and plan assets for the defined benefit pension plan during the years ended:

 

     2010     2009  

Change in benefit obligation

    

Benefit obligation at beginning of year

   $ 125      $ 116   

Interest cost

     7        7   

Actuarial (gain) loss

     11        9   

Net benefits paid

     (8     (7
                

Benefit obligation at end of year

     135        125   
                

Change in plan assets

    

Fair value of plan assets at beginning of year

   $ 86      $ 80   

Actual return on plan assets

     10        11   

Employer contribution

     3        2   

Net benefits paid

     (8     (7
                

Fair value of plan assets at end of year

     91        86   
                

Underfunded at end of year

   $ (44   $ (39
                

The weighted average assumptions that were used to determine the Company’s benefit obligation and net periodic benefit cost for the following years ended December 31 are:

 

     2010     2009  

Discount rate for year-end obligation

     5.20     5.70

Discount rate for net periodic pension cost

     5.70     6.30

Expected long term return on assets for year-end obligation

     7.50     7.50

Expected long-term return on assets for net periodic pension cost

     7.50     7.50

Compensation increase

     —          —     

The net periodic pension cost for 2010 was approximately $3 million and is comprised of interest cost of approximately $7 million and the amortization of the actuarial net loss of $2 million offset by a benefit of $6 million for the expected return on assets. The net periodic pension cost for 2009 was approximately $3 million and is comprised of interest cost of approximately $7 million and the amortization of the actuarial net loss of $2 million offset by a benefit of $6 million for the expected return on assets. The estimated actuarial loss of approximately $3 million will be amortized from the accumulated other comprehensive income into net periodic pension cost in 2011.

Estimated future benefit payments as of December 31, 2010 are as follows:

 

Year

   Amount  

2011

   $ 8   

2012

     8   

2013

     8   

2014

     8   

2015

     9   

2016 thru 2020

     46   

The minimum funding required during 2011 is estimated to be $8 million.

The Company recognized a loss of $6 million and a loss of $1 million in other comprehensive income for the years ended December 31, 2010 and 2009, respectively. The total amount recognized in net periodic pension cost (benefit) and other comprehensive income was $9 million and $4 million for the years ended December 31, 2010 and 2009, respectively.

 

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The amount in accumulated other comprehensive income not yet recognized as components of the periodic pension cost (benefit) is comprised of an actuarial loss of $34 million and $28 million as of December 31, 2010 and 2009, respectively.

It is the objective of the plan sponsor to maintain an adequate level of diversification to balance market risk, prudently invest to preserve capital and to provide sufficient liquidity under the plan. The assumption used for the expected long-term rate of return on plan assets is based on the long-term expected returns for the investment mix of assets currently in the portfolio. Historic real return trends for the various asset classes in the class portfolio are combined with anticipated future market conditions to estimate the real rate of return for each class. These rates are then adjusted for anticipated future inflation to determine estimated nominal rates of return for each class.

The following table presents the fair values of plan assets by category as of December 31, 2010:

 

Asset Category

   Quoted Price
in Active
Market for
Identical
Assets

(Level I)
     Significant
Other
Observable
Inputs
(Level II)
     Significant
Unobservable
Inputs

(Level III)
     Total  

Cash

   $ 2       $ —         $ —         $ 2   

Equity Securities:

           

U.S. large-cap funds

     —           22         —           22   

U.S. small-cap funds

     —           5         —           5   

International funds

     —           7         —           7   

Real estate fund

     —           3         —           3   

Fixed Income Securities:

           

Bond funds

     —           52         —           52   
                                   

Total

   $ 2       $ 89       $ —         $ 91   
                                   

The following table presents the fair values of plan assets by category as of December 31, 2009:

 

Asset Category

   Quoted Price
in Active
Market for
Identical
Assets

(Level I)
     Significant
Other
Observable
Inputs
(Level II)
     Significant
Unobservable
Inputs

(Level III)
     Total  

Cash

   $ 1       $ —         $ —         $ 1   

Equity Securities:

           

U.S. large-cap funds

     —           20         —           20   

U.S. small-cap funds

     —           5         —           5   

International funds

     —           6         —           6   

Real estate fund

     —           3         —           3   

Fixed Income Securities:

           

Bond funds

     —           51         —           51   
                                   

Total

   $ 1       $ 85       $ —         $ 86   
                                   

OTHER EMPLOYEE BENEFIT PLANS

The Company also maintains post-retirement health and welfare plans for certain subsidiaries and a non-qualified pension plan for certain individuals. At December 31, 2010 and 2009, the related projected benefit obligation for these plans accrued on the Company’s Consolidated Balance Sheets (primarily within Other non-current liabilities) was $10 million and $10 million, respectively. The expense recorded by the Company in 2010 and 2009 was less than $1 million.

 

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DEFINED CONTRIBUTION SAVINGS PLAN

The Company sponsors a defined contribution savings plan that provides certain eligible employees of the Company an opportunity to accumulate funds for retirement. Prior to mid-February 2008, the Company matched a portion of the contributions made by participating employees. In July 2010, the Company reinstated the match for a portion of the contributions made by participating employees. The Company’s cost for contributions to this plan was $2 million, $0 and $5 million for the years ended December 31, 2010, 2009 and 2008, respectively.

 

10. INCOME TAXES

The income tax provision consists of the following:

 

     For the Year Ended December 31,  
         2010             2009             2008      

Current:

      

Federal

   $   —        $ (1   $ —     

State

     (3     1        (6

Foreign

     5        8        6   
                        
     2        8        —     

Deferred:

      

Federal

     112        (45     (308

State

     19        (13     (72
                        
     131        (58     (380
                        

Income tax expense (benefit)

   $ 133      $ (50   $ (380
                        

Pre-tax income (loss) for domestic and foreign operations consisted of the following:

 

     For the Year Ended December 31,  
         2010              2009             2008      

Domestic

   $ 30       $ (334   $ (2,308

Foreign

     6         24        17   
                         

Pre-tax income (loss)

   $ 36       $ (310   $ (2,291
                         

 

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Current and non-current deferred income tax assets and liabilities, as of December 31, are comprised of the following:

 

     2010     2009  

Current deferred income tax assets:

    

Accrued liabilities and deferred income

   $ 78      $ 96   

Provision for doubtful accounts

     27        24   

Cash flow hedges

     —          3   
                
     105        123   

Less: valuation allowance

     (11     (18
                

Current deferred income tax assets

     94        105   

Current deferred income tax liabilities:

    

Prepaid expenses

     18        20   
                

Current deferred income tax liabilities

     18        20   
                

Current net deferred income tax asset

   $ 76      $ 85   
                

Non-current deferred income tax assets:

    

Net operating loss carryforwards

   $ 663      $ 580   

Alternative minimum tax credit carryforward

     2        14   

Foreign tax credit carryforwards

     3        3   

State tax credit carryforwards

     1        1   

Accrued liabilities and deferred income

     32        47   

Capital loss carryforward

     32        32   

Investment in joint venture

     3        4   

Minimum pension obligation

     14        11   

Cash flow hedges

     7        7   

Provision for doubtful accounts

     7        10   

Liability for unrecognized tax benefits

     9        11   

Other

     4        2   
                
     777        722   

Less: valuation allowance

     (107     (106
                

Non-current deferred income tax assets

     670        616   
                

Less:

    

Non-current deferred income tax liabilities:

    

Depreciation and amortization

     1,553        1,376   
                

Non-current net deferred income tax liability

   $ (883   $ (760
                

As of December 31, 2010, the Company had gross federal and state net operating loss carryforwards of $1,634 million. The federal net operating loss carryforwards expire between 2025 and 2030 and the state net operating loss carryforwards expire between 2011 and 2030.

Management has determined that, based upon all available evidence, it is more likely than not that certain deferred tax assets will not be utilized in the foreseeable future and, as such, has recorded a corresponding valuation allowance. In assessing the valuation allowance at December 31, 2010 and 2009, the Company determined that a full valuation allowance was required on the net definite-lived deferred tax asset balance. The Company’s valuation allowance was $118 million and $124 million at December 31, 2010 and 2009, respectively.

 

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The Company’s effective income tax rate differs from the U.S. federal statutory rate as follows:

 

     For the Year Ended December 31,  
     2010     2009     2008  

Federal statutory rate

     35     35     35

State and local income taxes, net of federal tax benefits

     (6     6        2   

Net impact of IRS settlement

     303        —          —     

Foreign rate differential

     14        —          —     

Impairment of non-deductible goodwill

     —          —          (18

Net increase (decrease) in valuation allowance

     23        (23     (2

Other

     —          (2     —     
                        
     369     16     17
                        

The majority of the rate differential reflects the impact of our former parent company’s IRS examination settlement. The settlement resulted in nontaxable book income related to the reversal of a portion of our legacy reserves as well as a reduction of certain deferred tax assets. The net tax impact of the IRS settlement reflects the federal and state tax impact of the reduction of deferred tax assets, net of valuation allowance ($109 million). The net increase in valuation allowance reflects the balance of the federal and state tax impact of current operations (loss for tax purposes) offset by a tax provision for the increase in deferred tax liabilities associated with indefinite-lived intangible assets.

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 recording 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 certain payments made to the Internal Revenue Service (“IRS”) to settle claims with respect to tax periods ending on or prior to December 31, 2006 that relate to income taxes imposed on Cendant and certain of its subsidiaries, the operations (or former operations) of which were determined by Cendant not to relate specifically to the respective businesses of Realogy, Wyndham Worldwide, Avis Budget or Travelport. 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 December 31, 2010, the due to former parent balance of $104 million 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 any remaining residual legacy Cendant tax liabilities which remain after 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 and 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

 

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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.

Accounting for Uncertainty in Income Taxes

On January 1, 2007, the Company adopted the FASB guidance for accounting for uncertainty in income taxes, which prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The adoption of this guidance on January 1, 2007 resulted in a $13 million increase in the liability for unrecognized tax benefits, including associated accrued interest and penalties and a corresponding decrease in retained earnings.

Upon adoption the total gross amount of unrecognized tax benefits were $17 million, of which $11 million would affect the Company’s effective tax rate, if recognized. The Company reflects changes in its liability for unrecognized tax benefits as income tax expense in the Consolidated Statements of Operations. As of December 31, 2010, the Company’s gross liability for unrecognized tax benefits was $34 million, of which $26 million would affect the Company’s effective tax rate, if recognized. The Company does not expect that its unrecognized tax benefits will significantly change over the next 12 months.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in interest expense and operating expenses, respectively. Upon adoption the Company had approximately $3 million of interest accrued on unrecognized tax benefits. The Company recognized $2 million and $2 million, respectively, of accrued interest for the years ended December 31, 2008 and December 31, 2009, respectively and a reduction of $1 million for the year ended December 31, 2010. These amounts are included in interest expense in the Company’s Consolidated Statements of Operations.

The rollforward of unrecognized tax benefits are summarized in the table below:

 

Unrecognized tax benefits—January 1, 2008

   $ 37   

Gross decreases—tax positions in prior periods

     (6

Gross increases—current period tax positions

     2   

Settlements

     (8
        

Unrecognized tax benefits—December 31, 2008

   $ 25   
        

Gross increases—tax positions in prior periods

     2   

Gross increases—current period tax positions

     3   
        

Unrecognized tax benefits—December 31, 2009

   $ 30   
        

Gross increases—tax positions in current period

     7   

Reduction due to lapse of statute of limitations

     (3
        

Unrecognized tax benefits—December 31, 2010

   $ 34   
        

 

11. RESTRUCTURING COSTS

2010 Restructuring Program

During the year ended December 31, 2010, the Company committed to various initiatives targeted principally at reducing costs and enhancing organizational efficiencies while consolidating existing processes and facilities. For the year ended December 31, 2010, the Company recognized $21 million of expense related to the 2010 restructuring plan.

 

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Restructuring charges by segment for the year ended December 31, 2010 were as follows:

 

     Opening
Balance
     Expense
Recognized
and Other
Additions
    Cash
Payments/
Other
Reductions
    Liability
as of
December 31,
2010
 

Real Estate Franchise Services

   $ —         $ —        $ —        $ —     

Company Owned Real Estate Brokerage Services

     —           13        (7     6   

Relocation Services

     —           4 (a)      (2     2   

Title and Settlement Services

     —           3        (2     1   

Corporate and Other

     —           2        —          2   
                                 
   $ —         $ 22      $ (11   $ 11   
                                 

 

(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.

The table below shows restructuring charges by category and the corresponding payments and other reductions for the year ended December 31, 2010:

 

     Personnel
Related
    Facility
Related
    Asset
Impairments
    Total  

2010 Restructuring expense and other additions

   $ 5      $ 16      $ 1      $ 22   

Cash payments and other reductions

     (4     (6     (1     (11
                                

Balance at December 31, 2010

   $ 1      $ 10      $ —        $ 11   
                                

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 December 31, 2010 are summarized by category as follows:

 

     Personnel
Related
    Facility
Related
    Asset
Impairments
    Total  

2009 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     (13     —          (14
                                

Balance at December 31, 2010

   $ 1      $ 19      $ —        $ 20   
                                

2008 Restructuring Program

During 2008, the Company committed to restructuring activities targeted principally at reducing personnel related costs and consolidating facilities. At December 31, 2009, the remaining liability was $8 million. During the year ended December 31, 2010, the Company utilized $5 million of the remaining accrual resulting in a remaining accrual of $3 million related to future lease payments.

 

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2007 Restructuring Program

During 2007, the Company committed to restructuring activities targeted principally at reducing personnel related costs and consolidating facilities. At December 31, 2009, the remaining liability was $3 million. During the year ended December 31, 2010, the Company utilized $2 million of the remaining accrual resulting in a remaining accrual of $1 million related to future lease payments.

2006 Restructuring Program

During 2006, the Company committed to restructuring activities targeted principally at reducing personnel related costs and consolidating facilities. At December 31, 2009, the remaining liability was $2 million. During the year ended December 31, 2010, the Company utilized $1 million of the remaining accrual resulting in a remaining accrual of $1 million related to future lease payments.

 

12. STOCK-BASED COMPENSATION

Incentive Equity Awards Granted by Holdings

In connection with the closing of the Merger 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 Merger 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 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 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. As of December 31, 2010, the total number of shares available for future grant is approximately 2 million shares.

On November 8, 2010, Holdings concluded an offer to exchange certain stock options granted to employees for new stock options as described below.

Exchange of Stock Options Granted by Holdings

Each original option held by eligible employees was exchanged on a one-for-one basis for a new option with different terms. The original options had an exercise price of $10 per share and were 50% time vested (Tranche A) and 50% performance based awards (Tranche B & C). They were exchanged for all time vested new awards. The new options were unvested on the date of grant and vest at a rate of 25% a year over a four-year period beginning July 1, 2010 with a 10-year contractual term beginning on the date of grant. The exercise price of 30% of the new options issued to the Senior Executives is $5.50 per share and the exercise price of all other new options issued is $0.83 per share, which represented the fair market value of Common Stock of Holdings as determined by its Compensation Committee as of the date of grant of the new options. On November 9, 2010, 10.16 million original options were tendered and exchanged for an equal number of new options and 5.05 million

 

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original options held by non-employees that were not eligible to participate in the exchange offer. The exchange resulted in an incremental stock compensation expense of $4 million which will be recognized over the four-year vesting period beginning July 1, 2010. The Company will continue to expense the remaining unrecognized stock compensation expense of $8 million related to the original tranche A options and restricted stock over their remaining vesting period.

The options were granted to employees and the non-executive Chairman at the estimated fair value at the date of issuance, with the following terms:

 

     2010
Options
   2007 Option Tranches
        A    B   C

Weighted average exercise price

   $1.79    $ 10.00    $10.00   $10.00

Vesting

   4 years ratable    5 years ratable    (1)   (1)

Term of option

   10 years    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 2010 options and the tranche A options were estimated on the date of grant using the Black-Scholes option-pricing model utilizing the following assumptions. Expected volatility was based on historical volatilities of comparable companies. The expected term of the options granted represents the period of time that options were expected to be outstanding. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of the grant, which corresponds to the expected term of the options.

The fair value of tranches B and C options was estimated on the date of grant using a lattice-based option valuation model. Expected volatility was based on historical volatilities of the same comparable companies. The expected term was estimated based on when certain IRR targets are projected to be met and when the options were expected to be exercised. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of the grant, which corresponds to the expected term of the options.

The weighted average assumptions utilized to determine the value of the stock options are as follows:

 

       Options Granted In  
       2010      2008      2007  

Expected volatility

       54.6      33.8      32.7

Expected term (years)

       6.25         6.7         6.9   

Risk-free interest rate

       1.5      3.7      4.5

Dividend yield

       —           —           —     

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 restricted stock granted to a director “cliff” vested in August 2009 and the remaining restricted stock “cliff” vested in February 2011. Shares were granted at the fair market price of $10 which is 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.

 

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Equity Award Activity

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

 

     2010
Options
     Option Tranche     Restricted
Stock
 
        A     B     C    

Outstanding at January 1, 2008

     —           8.08        4.04        4.04        0.45   

Granted

     —           0.17        0.06        0.06        0.01   

Exercised

     —           —          —          —          —     

Vested

     —           —          —          —          (0.23

Forfeited

     —           (0.29     (0.14     (0.14     —     
                                         

Outstanding at December 31, 2008

     —           7.96        3.96        3.96        0.23   

Granted

     —           —          —          —          —     

Exercised

     —           —          —          —          —     

Vested

     —           —          —          —          —     

Forfeited

     —           (0.17     (0.09     (0.09     —     
                                         

Outstanding at December 31, 2009

     —           7.79        3.87        3.87        0.23   

Granted/(tendered for exchange)

     10.16         (5.08     (2.54     (2.54     —     

Exercised

     —           —          —          —          —     

Vested

     —           —          —          —          (0.23

Forfeited

     —           (0.14     (0.07     (0.07     —     
                                         

Outstanding at December 31, 2010

     10.16         2.57        1.26        1.26        —     
                                         

Exercisable at December 31, 2010

     —           1.54        —          —          —     
                                         

Weighted average remaining contractual term (years)

     9.87         6.87        6.87        6.87     

Weighted average exercise price

   $ 1.79       $ 10.00      $ 10.00      $ 10.00     

Weighted average grant date fair value per share:

           

2010

   $ 0.37       $ —        $ —        $ —        $ —     

2009

   $ —         $ —        $ —        $ —        $ —     

2008

   $ —         $ 2.01      $ 1.61      $ 1.34      $ 10.00   

 

     Options
Vested
     Weighted
Average
Exercise Price
     Weighted
Average
Remaining
Contractual
Term
     Aggregate
Intrinsic
Value
 

Exercisable at December 31, 2010

     1.54       $ 10.00         6.87 years       $ —     

As of December 31, 2010, there was $8 million of unrecognized compensation cost related to the remaining vesting period of the original tranche A options and restricted stock under the Plan, and $5 million of unrecognized compensation cost related to the original tranche B and C options that were not eligible for exchange. Unrecognized cost for the original tranche A and restricted stock will be recorded in future periods as compensation expense over a weighted average period of approximately 1.4 years, and the unrecognized cost for tranche B and C options will be recorded as compensation expense when an IPO or significant capital transaction is probable of occurring. The unrecognized incremental compensation cost of $3 million related to the exchange offer will be amortized over the remaining vesting period of 3.5 years.

Stock-Based Compensation Expense

The Company recorded stock-based compensation expense of $6 million, $7 million and $7 million related to the incentive equity awards granted by Holdings for the year ended December 31, 2010, December 31, 2009 and December 31, 2008, respectively.

 

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13. SEPARATION ADJUSTMENTS, TRANSACTIONS WITH FORMER PARENT AND SUBSIDIARIES AND RELATED PARTIES

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

The Company has 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%. Upon Separation from Cendant, the amount of liabilities which were assumed by the Company approximated $843 million and were comprised of certain Cendant Corporate liabilities which were recorded on the historical books of Cendant as well as additional liabilities which were established for guarantees issued at the date of Separation related to certain unresolved contingent matters and certain others that could arise during the guarantee period. 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, 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 majority of the $843 million of liabilities allocated in 2006 was classified as due to former parent in the Consolidated Balance Sheet as the Company was indemnifying Cendant for these contingent liabilities and therefore any payments were typically made to the third party through the former parent. At December 31, 2009, the due to former parent balance was $505 million and the balance decreased to $104 million at December 31, 2010 primarily as a result of tax and other liability adjustments. At December 31, 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.

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 into 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 net revenues of $6 million, $6 million and $6 million, for the years ended December 31, 2010, December 31, 2009 and December 31, 2008, respectively. The Company recorded equity earnings (losses) of $28 million, $23 million and $(29) million for the years ended December 31, 2010, December 31, 2009 and December 31, 2008, respectively. In 2008, an impairment analysis was completed by PHH Home Loans. As a result of lower financial forecasts and a higher weighted average cost of capital, PHH Home Loans recorded an impairment charge for which the Company recorded its portion of the charge in equity (earnings) losses of unconsolidated entities of $31 million.

During the year ended December 31, 2010 and 2009, the Company received $25 million and $8 million, respectively, of cash dividends from PHH Home Loans. In 2008, the Company invested an additional $1 million of cash in PHH Home Loans.

 

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The following presents the summarized financial information for PHH Home Loans:

 

     December 31,         
     2010      2009         

Balance sheet data:

        

Total assets

   $ 449       $ 109      

Total liabilities

     367         32      

Total members’ equity

     82         77      
      

Year Ended December 31,

 
     2010      2009      2008  

Statement of operations data:

        

Total revenues

   $ 279       $ 252       $ 183   

Total expenses

     222         206         242   

Net income (loss)

     57         46         (59

Related Party Transactions

On June 26, 2009, the Company entered into a Tax Receivable Prepayment Agreement (the “Prepayment Agreement”) with WEX, pursuant to which WEX simultaneously paid the Company the sum of $51 million, less expenses of approximately $2 million, as prepayment in full of its remaining contingent obligations to the Company under the TRA.

In June 2008, Affinion Group, Inc. entered into an Assignment and Assumption Agreement (“AAA”) with Avis Budget Group, Wyndham Worldwide and Realogy. Prior to this transaction, Avis Budget Group, Wyndham Worldwide and Realogy had provided certain loyalty program-related benefits and services to credit card holders of a major financial institution and received a fee from this financial institution based on spending by the credit card holders. One-half of the loyalty program was deemed a contingent asset and contingent liability under the terms of the Separation Agreement, with Realogy being responsible for 62.5% of such half or 31.25% of the assets and liabilities under the entire program. Under the AAA, Affinion Group, Inc. assumed all of the liabilities and obligations of Avis Budget Group, Wyndham Worldwide and Realogy relating to the loyalty program, including the fulfillment of the then-outstanding loyalty program points obligations and Realogy agreed to pay $8 million over a three year period as consideration for Affinion Group, Inc.’s assumption of Realogy’s proportionate share of the obligation.

The Company has entered into certain transactions in the normal course of business with entities that are owned by affiliates of Apollo. For the year ended December 31, 2010, December 31, 2009 and December 31, 2008, the Company has recognized revenue and expenses related to these transactions of approximately $1 million in the aggregate in each year.

 

14. 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 Annual 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

 

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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 including but not limited to claims concerning administrative fees under RESPA as well as the validity of sales associates indemnification and administrative fees.

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). In 2002, Frank K. Cooper Real Estate #1, Inc. filed the Cooper Litigation against Cendant and Cendant’s subsidiary, Century 21. The complaint alleges breach of certain provisions of the Real Estate Franchise Agreement entered into between Century 21 and the plaintiffs, breach of the implied duty of good faith and fair dealing, violation of the New Jersey Consumer Fraud Act and breach of 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 or otherwise improperly charged expenses to the Century 21 advertising fund. The complaint seeks unspecified compensatory and punitive damages, injunctive relief, interest, attorney’s fees and costs. The New Jersey Consumer Fraud Act provides for treble damages, attorney’s fees and costs as remedies for violation of the Act. On August 17, 2010, the court granted plaintiffs’ renewed motion to certify a class. The certified class includes Century 21 franchisees at any time between August 1, 1995 and April 17, 2002 whose franchise agreements contain New Jersey choice of law and venue provisions and who have not executed releases releasing the claim (unless the release was a provision of a franchise renewal agreement).

A case management order was entered on November 29, 2010 that includes, among other deadlines, a trial date of April 16, 2012. On December 20, 2010, the court held a status conference to address plaintiffs’ motion regarding notice to be issued to the class, the language of the notice, publication of the notice and how class members can opt out of the class. As directed by a court order, Century 21 has delivered to plaintiffs’ counsel and the court lists of the names and contact information for (1) franchisees that meet the class definition and (2) franchisees that would have met the class definition but for the fact that they signed a waiver of claims against Century 21. Pursuant to the court order, a notice of pendency of the action will be mailed to class members on March 4, 2011, and a summary of that notice will be published in various publications within 30 days of that mailing. Plaintiffs’ counsel has advised that it may file a motion requesting that notice be sent to all Century 21 franchisees during the class period, not solely those that meet the class definition. This case remains in its very early stages, with most of the effort in the past six months directed at class identification. Discovery on the merits is in its early stages. This class action involves substantial, complex litigation. Class action litigation is inherently unpredictable and subject to significant uncertainties. The resolution of the Cooper Litigation could result in substantial losses and the Company cannot provide assurances that such resolution will not have a material adverse effect on the Company’s results of operations, financial condition or liquidity.

Legal—Cendant Corporate Litigation

Pursuant to the Separation and Distribution Agreement dated as of July 27, 2006 among Cendant, Realogy, Wyndham Worldwide and Travelport, each of Realogy, Wyndham Worldwide and Travelport have assumed certain contingent and other corporate liabilities (and related costs and expenses), which are primarily related to each of their respective businesses. In addition, Realogy has assumed 62.5% and Wyndham Worldwide has assumed 37.5% of certain contingent and other corporate liabilities (and related costs and expenses) of Cendant or its subsidiaries, which are not primarily related to any of the respective businesses of Realogy, Wyndham Worldwide, Travelport and/or Cendant’s vehicle rental operations, in each case incurred or allegedly incurred on or prior to the date of the separation of Travelport from Cendant. Such litigation includes the litigation described below.

CSI Investment et. al. v. Cendant et. al., (Case No. 1:00-CV-01422 (DAB-DFE) (S.D.N.Y.)) is a decade-old legacy Cendant litigation matter not related to real estate (“Credentials Litigation”). In July 2009, the trial court

 

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entered a satisfaction of judgment with respect to the entire Credentials Litigation subject to plaintiffs’ right to petition the Court for reasonable attorneys’ fees. 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. In December 2010 the parties settled the attorneys’ fee dispute and Cendant agreed to pay plaintiffs $8 million (62.5% of which was paid by Realogy to satisfy its percentage of the settlement amount). The Court entered a stipulation and order of dismissal of the matter on January 11, 2011.

***

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 December 31, 2010, the due to former parent balance of $104 million 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

 

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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 and support the Company’s payment obligations with respect to its share of Cendant contingent and other corporate liabilities. 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 and fourth quarter of 2010, the Company entered into agreements with Avis Budget Group and Wyndham to further reduce the letter of credit, primarily due to the IRS tax settlement and other liability adjustments. As a result, the letter of credit was reduced from $446 million at December 31, 2009 to $123 million as of December 31, 2010.

Apollo Management Fee Agreement

In connection with the Merger Transaction, Apollo entered into a management fee agreement with the Company which allows Apollo and its affiliates to provide certain management consulting services to us 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 (1) 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 will agree 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 $190 million and $161 million at December 31, 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.

 

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Leases

The Company is committed to making rental payments under noncancelable operating leases covering various facilities and equipment. Future minimum lease payments required under noncancelable operating leases as of December 31, 2010 are as follows:

 

Year

   Amount  

2011

   $ 143   

2012

     101   

2013

     64   

2014

     37   

2015

     25   

Thereafter

     24   
        
   $ 394   
        

Capital lease obligations were $12 million net of $2 million of imputed interest at December 31, 2010 and $14 million net of $2 million of imputed interest at December 31, 2009.

The Company incurred rent expense as follows:

 

     For the Year Ended December 31,  
         2010              2009              2008      

Gross rent expense

   $ 181       $ 195       $ 222   

Less: Sublease rent income

     3         3         3   
                          

Net rent expense

   $ 178       $ 192       $ 219   
                          

Purchase Commitments and Minimum Licensing Fees

In the normal course of business, the Company makes various commitments to purchase goods or services from specific suppliers, including those related to capital expenditures. The purchase commitments made by the Company as of December 31, 2010 are approximately $77 million.

The Company is required to pay a minimum licensing fee to Sotheby’s which began in 2009 and continues through 2054. The annual minimum licensing fee is approximately $2 million per year. The Company is required to pay a minimum licensing fee to Meredith Corporation for the licensing of the Better Homes and Gardens Real Estate brand. Annual minimum licensing fee began in 2009 at $0.5 million increase to $4 million by 2014 and generally remains the same thereafter.

Future minimum payments as of December 31, 2010 are as follows:

 

Year

   Amount  

2011

   $ 43   

2012

     22   

2013

     14   

2014

     8   

2015

     8   

Thereafter

     256   
        
   $ 351   
        

 

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Standard Guarantees/Indemnifications

In the ordinary course of business, the Company enters into numerous agreements that contain standard guarantees and indemnities whereby the Company indemnifies another party for breaches of representations and warranties. In addition, many of these parties are also indemnified against any third party claim resulting from the transaction that is contemplated in the underlying agreement. Such guarantees or indemnifications are granted under various agreements, including those governing (i) purchases, sales or outsourcing of assets or businesses, (ii) leases of real estate, (iii) licensing of trademarks, (iv) use of derivatives, and (v) issuances of debt securities. The guarantees or indemnifications issued are for the benefit of the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts, (iii) franchisees in licensing agreements, (iv) financial institutions in derivative contracts, and (v) underwriters in debt security issuances. While some of these guarantees extend only for the duration of the underlying agreement, many survive the expiration of the term of the agreement or extend into perpetuity (unless subject to a legal statute of limitations). There are no specific limitations on the maximum potential amount of future payments that the Company could be required to make under these guarantees, nor is the Company able to develop an estimate of the maximum potential amount of future payments to be made under these guarantees as the triggering events are not subject to predictability. With respect to certain of the aforementioned guarantees, such as indemnifications of landlords against third party claims for the use of real estate property leased by the Company, the Company maintains insurance coverage that mitigates any potential payments to be made.

Other Guarantees/Indemnifications

In the normal course of business, the Company coordinates numerous events for its franchisees and thus reserves a number of venues with certain minimum guarantees, such as room rentals at hotels local to the conference center. However, such room rentals are paid by each individual franchisee. If the franchisees do not meet the minimum guarantees, the Company is obligated to fulfill the minimum guaranteed fees. Such guarantees in effect at December 31, 2010 extend into 2011 and the maximum potential amount of future payments that the Company may be required to make under such guarantees is approximately $15 million. The Company would only be required to pay this maximum amount if none of the franchisees conducted their planned events at the reserved venues. Historically, the Company has not been required to make material payments under these guarantees.

Insurance and Self-Insurance

At December 31, 2010 and 2009, the Consolidated Balance Sheets include approximately $61 million and $62 million, respectively, of liabilities relating to (i) self-insured risks for errors and omissions and other legal matters incurred in the ordinary course of business within the Company Owned Real Estate Brokerage Services segment, (ii) vacant dwellings and household goods in transit within the Relocation Services segment, and (iii) premium and claim reserves for the Company’s title underwriting business. The Company may also be subject to legal claims arising from the handling of escrow transactions and closings. The Company’s subsidiary, NRT, carries errors and omissions insurance for errors made during the real estate settlement process of $15 million in the aggregate, subject to a deductible of $1 million per occurrence. In addition, the Company carries an additional errors and omissions insurance policy for Realogy Corporation and its subsidiaries for errors made for real estate related services up to $35 million in the aggregate, subject to a deductible of $2.5 million per occurrence. This policy also provides excess coverage to NRT creating an aggregate limit of $50 million, subject to the NRT deductible of $1 million per occurrence.

The Company issues title insurance policies which provide coverage for real property mortgage lenders and buyers of real property. When acting as a title agent issuing a policy on behalf of an underwriter, the Company’s insurance risk is limited to the first $5,000 of claims on any one policy. The title underwriter which the Company acquired in January 2006 typically underwrites title insurance policies of up to $1.5 million. For policies in excess of $1.5 million, the Company typically obtains a reinsurance policy from a national underwriter to reinsure the excess amount.

 

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Fraud, defalcation and misconduct by employees are also risks inherent in the business. The Company is the custodian of cash deposited by customers with specific instructions as to its disbursement from escrow, trust and account servicing files. The Company maintains Fidelity insurance covering the loss or theft of funds of up to $30 million annually in the aggregate, subject to a deductible of $1 million per occurrence.

The Company also maintains self-insurance arrangements relating to health and welfare, workers’ compensation, auto and general liability in addition to other benefits provided to the Company’s employees. The accruals for these self-insurance arrangements totaled approximately $17 million and $18 million at December 31, 2010 and 2009, respectively.

 

15. Equity (DEFICIT)

On April 10, 2007, the Company completed the Merger Transactions with Apollo. All of the Company’s issued and outstanding common stock is currently owned by the Company’s parent, Intermediate, and all of the issued and outstanding common stock of Intermediate is owned by its parent, Holdings.

As a result of the Merger and related transactions, the Company has 100 shares of common stock authorized and outstanding with a par value of $0.01 per share. In addition, the Company has 100 shares of preferred stock authorized with no shares outstanding.

Accumulated Other Comprehensive Loss

The after-tax components of accumulated other comprehensive loss are as follows:

 

     Currency
Translation
Adjustments (1)
    Minimum
Pension
Liability
Adjustment
    Unrealized
Loss on
Cash Flow
Hedges
    Accumulated
Other
Comprehensive
Loss (2)
 

Balance at December 31, 2007

   $ 1      $ 2      $ (12   $ (9

Current period change

     (8     (18     (11     (37
                                

Balance at December 31, 2008

     (7     (16     (23     (46

Current period change

     7        (1     8        14   
                                

Balance at December 31, 2009

     —          (17     (15     (32

Current period change

     —          (3     5        2   
                                

Balance at December 31, 2010

   $ —        $ (20   $ (10   $ (30
                                

 

(1) Assets and liabilities of foreign subsidiaries having non-U.S.-dollar functional currencies are translated at exchange rates at the balance sheet dates. Revenues and expenses are translated at average exchange rates during the periods presented. The gains or losses resulting from translating foreign currency financial statements into U.S. dollars are included in accumulated other comprehensive income (loss). Gains or losses resulting from foreign currency transactions are included in the Consolidated Statement of Operations.
(2) As of December 31, 2010, the Company does not have any after-tax components of accumulated other comprehensive loss attributable to noncontrolling interests.

 

16. RISK MANAGEMENT AND FAIR VALUE OF FINANCIAL INSTRUMENTS

RISK MANAGEMENT

The following is a description of the Company’s risk management policies.

 

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Interest Rate Risk

At December 31, 2010, the Company had total long-term debt of $6,892 million, excluding $331 million of securitization obligations. Of the $6,892 million of long-term debt, the Company has $3,222 million of variable interest rate debt primarily based on 3-month LIBOR. The Company has entered into interest rate swaps to manage its exposure to changes in interest rates associated with its variable rate borrowings with varying expiration dates and an aggregate notional value of $425 million which effectively fixes the interest rate on that portion of variable interest rate debt. The remaining portion of the Company’s variable interest rate debt is subject to market rate risk, interest payments will fluctuate as underlying interest rates change as a result of market changes.

At December 31, 2010, the fair value of the Company’s long-term debt, excluding securitization obligations, approximated $6,697 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.

In the normal course of business, the Company borrows funds under its securitization facilities and utilizes such funds to generate assets on which it generally earns interest income. The Company does not believe it is exposed to significant interest rate risk in connection with these activities as the rate it incurs on such borrowings and the rate it earns on such assets are generally based on similar variable indices, thereby providing a natural hedge.

Credit Risk and Exposure

The Company is exposed to counterparty credit risk in the event of nonperformance by counterparties to various agreements and sales transactions. The Company manages such risk by evaluating the financial position and creditworthiness of such counterparties and by requiring collateral in instances in which financing is provided. The Company mitigates counterparty credit risk associated with its derivative contracts by monitoring the amounts at risk with each counterparty to such contracts, periodically evaluating counterparty creditworthiness and financial position, and where possible, dispersing its risk among multiple counterparties.

As of December 31, 2010, there were no significant concentrations of credit risk with any individual counterparty or groups of counterparties. The Company actively monitors the credit risk associated with the Company’s receivables.

Market Risk Exposure

The Company Owned Real Estate Brokerage Services segment, NRT, owns real estate brokerage offices located in and around large metropolitan areas in the U.S. NRT has more offices and realizes more of its revenues in California, Florida and the New York metropolitan area than any other regions of the country. For the year ended December 31, 2010, NRT generated approximately 27% of its revenues from California, 26% from the New York metropolitan area and 10% from Florida. For the year ended December 31, 2009, NRT generated approximately 27% of its revenues from California, 23% from the New York metropolitan area and 11% from Florida. For the year ended December 31, 2008, NRT generated approximately 27% of its revenues from California, 25% from the New York metropolitan area and 11% from Florida.

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 Swiss Franc, British Pound, Euro and Canadian Dollar. The Company has elected not to utilize hedge accounting for these forward contracts; therefore, any

 

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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 December 31, 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 $18 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 $10 million and $15 million, net of income taxes, has been recorded within Accumulated Other Comprehensive Income/(Loss) (“AOCI”) at December 31, 2010 and December 31, 2009, respectively. See Note 20, “Subsequent Events” for a discussion of amounts the company expects to reclassify to earnings from AOCI related to the Amendment to Senior Secured Credit Facility.

The fair value of derivative instruments is as follows:

 

Liability Derivatives

             

Designated as Hedging Instruments

  

Balance Sheet Location

   December 31,
2010

Fair Value
     December 31,
2009

Fair Value
 

Interest rate swap contracts

   Other current liabilities    $ —         $ 8   
   Other non-current liabilities      17         17   
                    
      $ 17       $ 25   

The effect of derivative instruments on earnings is as follows:

 

    Gain or (Loss) Recognized in
Other Comprehensive Income
          Gain or (Loss) Reclassified
from AOCI into Income
 

Derivatives in Cash Flow

Hedge Relationships

  Year Ended
December 31,
2010
    Year Ended
December
31, 2009
    Location of Gain or (Loss)
Reclassified from AOCI
into Income (Effective Portion)
    Year Ended
December 31,
2010
    Year Ended
December 31,
2009
 

Interest rate swap contracts

  $ 8      $ 13        Interest expense      $ (19   $ (23

 

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
 
      Year Ended
December 31,

2010
    Year Ended,
December 31,

2009
 

Foreign exchange contracts

   Operating expense    $ (1   $ (1

 

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FAIR VALUE

Effective January 1, 2008, the Company adopted the FASB’s guidance for fair value measurements. The guidance clarifies the definition of fair value, prescribes methods for measuring fair value, establishes a fair value hierarchy based on the inputs used to measure fair value, and expands disclosures about the use of fair value measurements. 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 3. 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.

The following table summarizes fair value measurements by level at December 31, 2010 for assets/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)

   $ —         $ —         $ 17       $ 17   

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/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   

 

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

 

Fair value at January 1, 2009

   $ 38   

Changes reflected in other comprehensive loss

     (13
        

Fair value at December 31, 2009

     25   

Changes reflected in other comprehensive loss

     (8
        

Fair value at December 31, 2010

   $ 17   
        

The following table summarizes the carrying amount of the Company’s indebtedness compared to the estimated fair value at:

 

     December 31, 2010      December 31, 2009  
     Carrying
Amount
     Estimated
Fair Value
     Carrying
Amount
     Estimated
Fair Value
 

Debt

           

Securitization obligations

   $ 331       $ 331       $ 305       $ 305   

Term loan facility

     3,059         2,903         3,091         2,784   

Second Lien Loans

     650         720         650         699   

Other bank indebtedness

     163         163         —           —     

Senior Notes

     1,688         1,656         1,686         1,427   

Senior Toggle Notes

     468         449         416         341   

Senior Subordinated Notes

     864         806         863         668   

 

17. SEGMENT INFORMATION

The reportable segments presented below represent the Company’s operating segments for which separate financial information is available and which is utilized on a regular basis by its chief operating decision maker to assess performance and to allocate resources. In identifying its reportable segments, the Company also considers the nature of services provided by its operating segments. Management evaluates the operating results of each of its reportable 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 secured assets and obligations) and income taxes, each of which is presented in the Company’s Consolidated Statements of Operations. The Company’s presentation of EBITDA may not be comparable to similar measures used by other companies.

 

     Revenues (a) (b)  
     For the Year Ended December 31,  
         2010             2009             2008      

Real Estate Franchise Services

   $ 560      $ 538      $ 642   

Company Owned Real Estate Brokerage Services

     3,016        2,959        3,561   

Relocation Services

     405        320        451   

Title and Settlement Services

     325        328        322   

Corporate and Other (c)

     (216     (213     (251
                        

Total Company

   $ 4,090      $ 3,932      $ 4,725   
                        

 

(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 $216 million for the year ended December 31, 2010, $213 million for

 

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the year ended December 31, 2009 and $251 million for the year ended December 31, 2008. Such amounts are eliminated through the Corporate and Other line.

(b) Revenues for the Relocation Services segment include intercompany referral and relocation fees paid by the Company Owned Real Estate Brokerage Services segment of $37 million for the year ended December 31, 2010, $34 million for the year ended December 31, 2009 and $42 million for the year ended December 31, 2008. Such amounts are recorded as contra-revenues by the Company Owned Real Estate Brokerage Services segment. There are no other material inter-segment transactions.
(c) Includes the elimination of transactions between segments.

 

     EBITDA (a) (b) (c)  
     For the Year Ended December 31,  
         2010              2009             2008      

Real Estate Franchise Services

   $ 352       $ 323      $ (597

Company Owned Real Estate Brokerage Services

     80         6        (269

Relocation Services

     109         122        (257

Title and Settlement Services

     25         20        (303

Corporate and Other (d)

     269         (6     (23
                         

Total Company

   $ 835       $ 465      $ (1,449
                         

 

(a) Includes $21 million of restructuring costs and $1 million of merger costs, offset by a net benefit of $323 million of former parent legacy items primarily as a result of tax and other liability adjustments for the year ended December 31, 2010 compared to $70 million of restructuring costs and $1 million of merger costs offset by a benefit of $34 million of former parent legacy items (comprised of a benefit of $55 million recorded at Cartus related to WEX partially offset by $21 million of expenses recorded at Corporate) for the year ended December 31, 2009, $58 million of restructuring costs and $2 million of merger costs offset by a benefit of $20 million of former parent legacy costs for the year ended December 31, 2008.
(b) 2009 EBITDA includes a gain on the extinguishment of debt of $75 million.
(c) 2008 EBITDA includes an impairment charge of $1,789 million. The impairment charge impacted the Real Estate Franchise Services segment by $953 million, the Company Owned Real Estate Brokerage Services segment by $195 million, the Relocation Services segment by $335 million and the Title and Settlement Services segment by $306 million.
(d) Includes the elimination of transactions between segments.

Provided below is a reconciliation of EBITDA to Net loss attributable to Realogy:

 

     For the Year Ended December 31,  
         2010             2009             2008      

EBITDA

   $ 835      $ 465      $ (1,449

Less:

      

Depreciation and amortization

     197        194        219   

Interest expense/(income), net

     604        583        624   
                        

Income (loss) before income taxes

     34        (312     (2,292

Income tax expense (benefit)

     133        (50     (380
                        

Net loss attributable to Realogy

   $ (99   $ (262   $ (1,912
                        

 

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Depreciation and Amortization

 

     For the Year Ended December 31,  
         2010              2009              2008      

Real Estate Franchise Services

   $ 78       $ 78       $ 77   

Company Owned Real Estate Brokerage Services

     44         56         78   

Relocation Services

     50         34         36   

Title and Settlement Services

     17         18         19   

Corporate and Other

     8         8         9   
                          

Total Company

   $ 197       $ 194       $ 219   
                          

Segment Assets

 

     As of December 31,  
     2010      2009  

Real Estate Franchise Services

   $ 5,262       $ 5,315   

Company Owned Real Estate Brokerage Services

     874         853   

Relocation Services

     1,404         1,252   

Title and Settlement Services

     277         271   

Corporate and Other

     212         350   
                 

Total Company

   $ 8,029       $ 8,041   
                 

Capital Expenditures

 

     For the Year Ended December 31,  
       2010          2009          2008    

Real Estate Franchise Services

   $ 6       $ 6       $ 10   

Company Owned Real Estate Brokerage Services

     22         17         23   

Relocation Services

     8         7         6   

Title and Settlement Services

     6         6         7   

Corporate and Other

     7         4         6   
                          

Total Company

   $ 49       $ 40       $ 52   
                          

The geographic segment information provided below is classified based on the geographic location of the Company’s subsidiaries.

 

     United
States
     All Other
Countries
     Total  

On or for the year ended December 31, 2010

        

Net revenues

   $ 3,990       $ 100       $ 4,090   

Total assets

     7,923         106         8,029   

Net property and equipment

     185         1         186   

On or for the year ended December 31, 2009

        

Net revenues

   $ 3,838       $ 94       $ 3,932   

Total assets

     7,978         63         8,041   

Net property and equipment

     210         1         211   

On or for the year ended December 31, 2008

        

Net revenues

   $ 4,628       $ 97       $ 4,725   

Total assets

     8,682         230         8,912   

Net property and equipment

     274         2         276   

 

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18. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Provided below is selected unaudited quarterly financial data for 2010 and 2009.

 

     2010  
     First     Second     Third     Fourth  

Net revenues

        

Real Estate Franchise Services

   $ 122      $ 173      $ 138      $ 127   

Company Owned Real Estate Brokerage Services

     601        956        762        697   

Relocation Services

     76        106        122        101   

Title and Settlement Services

     65        86        84        90   

Other (a)

     (45     (68     (54     (49
                                
   $ 819      $ 1,253      $ 1,052      $ 966   
                                

Income (loss) before income taxes, equity in earnings and noncontrolling interests (b)

        

Real Estate Franchise Services

   $ 46      $ 103      $ 71      $ 55   

Company Owned Real Estate Brokerage Services

     (47     64        8        (20

Relocation Services

     (8     15        38        15   

Title and Settlement Services

     (10     8        3        8   

Other

     (173     143        (156     (157
                                
   $ (192   $ 333      $ (36   $ (99
                                

Net (loss) income attributable to Realogy

   $ (197   $ 222      $ (33   $ (91
                                

 

(a) Represents the elimination of transactions primarily between the Real Estate Franchise Services segment and the Company Owned Real Estate Brokerage Services segment.
(b) The quarterly results include the following:

 

   

Former parent legacy cost (benefit) of $5 million, $(314) million, $(6) million and $(8) million in the first, second, third and fourth quarters, respectively;

   

Restructuring charges of $6 million, $4 million, $2 million and $9 million in the first, second, third and fourth quarters, respectively; and

   

Merger costs of $1 million in the fourth quarter.

 

     2009  
     First     Second     Third     Fourth  

Net revenues

        

Real Estate Franchise Services

   $ 105      $ 143      $ 151      $ 139   

Company Owned Real Estate Brokerage Services

     491        764        896        808   

Relocation Services

     71        80        92        77   

Title and Settlement Services

     68        88        91        81   

Other (a)

     (38     (57     (61     (57
                                
     $697        $1,018        $1,169        $1,048   
                                

Loss before income taxes, equity in earnings and noncontrolling interests  (b)

        

Real Estate Franchise Services

   $ 24      $ 66      $ 88      $ 67   

Company Owned Real Estate Brokerage Services

     (103     1        28        (1

Relocation Services

     (8     65        28        8   

Title and Settlement Services

     (10     8        6        (1

Other

     (164     (158     (89     (189
                                
   $ (261   $ (18   $ 61      $ (116
                                

Net (loss) income attributable to Realogy

   $ (259   $ (15   $ 58      $ (46
                                

 

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(a) Represents the elimination of transactions primarily between the Real Estate Franchise Services segment and the Company Owned Real Estate Brokerage Services segment.
(b) The quarterly results include the following:

 

   

Former parent legacy cost (benefit) of $4 million, $(46) million, $5 million and $3 million in the first, second, third and fourth quarters, respectively;

   

Restructuring charges of $34 million, $10 million, $15 million and $11 million in the first, second, third and fourth quarters, respectively; and

   

Merger costs of $1 million in the fourth quarter.

 

19. GUARANTOR/NON-GUARANTOR SUPPLEMENTAL FINANCIAL INFORMATION

The following consolidating financial information presents the Consolidating Balance Sheets and 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 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 consolidated financial statements except for the investments in consolidated subsidiaries which are accounted for using the equity method.

 

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Consolidating Statement of Operations

Year Ended December 31, 2010

(in millions)

 

    Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Revenues

         

Gross commission income

  $ —        $ 2,965      $ —        $ —        $ 2,965   

Service revenue

    —          496        204        —          700   

Franchise fees

    —          263        —          —          263   

Other

    —          157        5        —          162   
                                       

Net revenues

    —          3,881        209        —          4,090   

Expenses

         

Commission and other agent-related costs

    —          1,932        —          —          1,932   

Operating

    —          1,086        155        —          1,241   

Marketing

    —          177        2        —          179   

General and administrative

    51        172        15        —          238   

Former parent legacy costs (benefit), net

    (323     —          —          —          (323

Restructuring costs

    3        18        —          —          21   

Merger costs

    1        —          —          —          1   

Depreciation and amortization

    8        187        2        —          197   

Interest expense/(income), net

    597        7        —          —          604   

Other (income)/expense, net

    (1     (5     —          —          (6

Intercompany transactions

    5        (4     (1     —          —     
                                       

Total expenses

    341        3,570        173        —          4,084   

Income (loss) before income taxes, equity in earnings and non controlling interests

    (341     311        36        —          6   

Income tax expense (benefit)

    (252     383        2        —          133   

Equity in (earnings) losses of unconsolidated entities

    —          —          (30     —          (30

Equity in (earnings) losses of subsidiaries

    10        (62     —          52        —     
                                       

Net income (loss)

    (99     (10     64        (52     (97

Less: Net income attributable to noncontrolling interests

    —          —          (2     —          (2
                                       

Net income (loss) attributable to Realogy

  $ (99   $ (10   $ 62      $ (52   $ (99
                                       

 

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Consolidating Statement of Operations

Year Ended December 31, 2009

(in millions)

 

    Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Revenues

         

Gross commission income

  $ —        $ 2,884      $ 2      $ —        $ 2,886   

Service revenue

    —          436        185        —          621   

Franchise fees

    —          273        —          —          273   

Other

    —          146        6        —          152   
                                       

Net revenues

    —          3,739        193        —          3,932   

Expenses

         

Commission and other agent-related costs

    —          1,850        —          —          1,850   

Operating

    —          1,135        128        —          1,263   

Marketing

    —          159        2        —          161   

General and administrative

    49        193        8        —          250   

Former parent legacy costs (benefit), net

    21        (55     —          —          (34

Restructuring costs

    7        63        —          —          70   

Merger costs

    1        —          —          —          1   

Depreciation and amortization

    8        184        2        —          194   

Interest expense/(income), net

    580        3        —          —          583   

Gain on extinguishment of debt

    (75     —          —          —          (75

Other (income)/expense, net

    2        —          1        —          3   

Intercompany transactions

    6        (5     (1     —          —     
                                       

Total expenses

    599        3,527        140        —          4,266   

Income (loss) before income taxes, equity in earnings and noncontrolling interests

    (599     212        53        —          (334

Income tax expense (benefit)

    (173     97        26        —          (50

Equity in (earnings) losses of unconsolidated entities

    —          —          (24     —          (24

Equity in (earnings) losses of subsidiaries

    (164     (49     —          213        —     
                                       

Net income (loss)

    (262     164        51        (213     (260

Less: Net income attributable to noncontrolling interests

    —          —          (2     —          (2
                                       

Net income (loss) attributable to Realogy

  $ (262   $ 164      $ 49      $ (213   $ (262
                                       

 

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Consolidating Statement of Operations

Year Ended December 31, 2008

(in millions)

 

    Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Revenues

         

Gross commission income

  $ —        $ 3,480      $ 3      $ —        $ 3,483   

Service revenue

    —          551        186        —          737   

Franchise fees

    —          323        —          —          323   

Other

    —          186        (4     —          182   
                                       

Net revenues

    —          4,540        185        —          4,725   

Expenses

         

Commission and other agent-related costs

    —          2,274        1        —          2,275   

Operating

    2        1,482        123        —          1,607   

Marketing

    1        204        2        —          207   

General and administrative

    41        183        12        —          236   

Former parent legacy costs (benefit), net

    (20     —          —          —          (20

Restructuring costs

    2        56        —          —          58   

Merger costs

    1        1        —          —          2   

Impairment of intangible assets, goodwill and investment in unconsolidated entities

    —          1,739        50        —          1,789   

Depreciation and amortization

    9        208        2        —          219   

Interest expense/(income), net

    621        3        —          —          624   

Other (income)/expense, net

    (4     (5     —          —          (9

Intercompany transactions

    21        (20     (1     —          —     
                                       

Total expenses

    674        6,125        189        —          6,988   

Income (loss) before income taxes, equity in earnings and noncontrolling interests

    (674     (1,585     (4     —          (2,263

Income tax expense (benefit)

    (228     (143     (9     —          (380

Equity in (earnings) losses of unconsolidated entities

    —          —          28        —          28   

Equity in (earnings) losses of subsidiaries

    1,466        24        —          (1,490     —     
                                       

Net income (loss)

    (1,912     (1,466     (23     1,490        (1,911

Less: Net income attributable to noncontrolling interests

    —          —          (1     —          (1
                                       

Net income (loss) attributable to Realogy

  $ (1,912   $ (1,466   $ (24   $ 1,490      $ (1,912
                                       

 

 

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Consolidating Balance Sheet

As of December 31, 2010

(in millions)

 

    Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Assets

         

Current assets:

         

Cash and cash equivalents

  $ 69      $ 74      $ 51      $ (2   $ 192   

Trade receivables, net

    —          79        35        —          114   

Relocation receivables

    —          —          386        —          386   

Relocation properties held for sale

    —          21        —          —          21   

Deferred income taxes

    15        63        (2     —          76   

Intercompany note receivable

    —          13        19        (32     —     

Other current assets

    9        69        31        —          109   
                                       

Total current assets

    93        319        520        (34     898   

Property and equipment, net

    21        162        3        —          186   

Goodwill

    —          2,611        —          —          2,611   

Trademarks

    —          732        —          —          732   

Franchise agreements, net

    —          2,909        —          —          2,909   

Other intangibles, net

    —          478        —          —          478   

Other non-current assets

    80        83        52        —          215   

Investment in subsidiaries

    8,014        152        —          (8,166     —     
                                       

Total assets

  $ 8,208      $ 7,446      $ 575      $ (8,200   $ 8,029   
                                       

Liabilities and Equity (Deficit)

         

Current liabilities:

         

Accounts payable

  $ 25      $ 168      $ 12      $ (2   $ 203   

Securitization obligations

    —          —          331        —          331   

Intercompany note payable

    —          19        13        (32     —     

Due to former parent

    104        —          —          —          104   

Revolving credit facility and current portion of long-term debt

    132        55        7        —          194   

Accrued expenses and other current liabilities

    178        316        31        —          525   

Intercompany payables

    1,949        (1,962     13        —          —     
                                       

Total current liabilities

    2,388        (1,404     407        (34     1,357   

Long-term debt

    6,698        —          —          —          6,698   

Deferred income taxes

    (614     1,497        —          —          883   

Other non-current liabilities

    86        61        16        —          163   

Intercompany liabilities

    722        (722     —          —          —     
                                       

Total liabilities

    9,280        (568     423        (34     9,101   
                                       

Total equity (deficit)

    (1,072     8,014        152        (8,166     (1,072
                                       

Total liabilities and equity (deficit)

  $ 8,208      $ 7,446      $ 575      $ (8,200   $ 8,029   
                                       

 

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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 andother 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   
                                         

 

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Consolidating Statement of Cash Flows

For the Year Ended December 31, 2010

(in millions)

 

     Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Net cash provided by (used in) operating activities

   $ (638   $ 504      $ 24      $ (8   $ (118

Investing activities

          

Property and equipment additions

     (7     (41     (1     —          (49

Net assets acquired (net of cash acquired) and acquisition-related payments

     —          (17     —          —          (17

Proceeds from sale of assets

     —          5        —          —          5   

Purchase of certificates of deposit

     —          —          (9     —          (9
                                        

Net cash provided by (used in) investing activities

     (7     (53     (10     —          (70

Financing activities

          

Net change in revolving credit facility

     100        35        7        —          142   

Repayments made for term loan facility

     (32     —          —          —          (32

Net change in securitization obligations

     —          —          27        —          27   

Intercompany dividend

     —          —          (11     11        —     

Intercompany transactions

     454        (428     (26     —          —     

Other, net

     (2     (8     (3     —          (13
                                        

Net cash provided by (used in) financing activities

     520        (401     (6     11        124   
                                        

Effect of changes in exchange rates on cash and cash equivalents

     —          —          1        —          1   
                                        

Net (decrease) increase in cash and cash equivalents

     (125     50        9        3        (63

Cash and cash equivalents, beginning of period

     194        24        42        (5     255   
                                        

Cash and cash equivalents, end of period

   $ 69      $ 74      $ 51      $ (2   $ 192   
                                        

 

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Consolidating Statement of Cash Flows

For the Year Ended December 31, 2009

(in millions)

 

     Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Net cash provided by (used in) operating activities

   $ (583   $ 309      $ 650      $ (35   $ 341   

Investing activities

          

Property and equipment additions

     (4     (36     —          —          (40

Net assets acquired (net of cash acquired) and acquisition-related payments

     —          (5     —          —          (5

Change in restricted cash

     —          —          (2     —          (2

Intercompany dividend

     —          63        —          (63     —     

Intercompany note receivable

     —          37        —          (37     —     
                                        

Net cash provided by (used in) investing activities

     (4     59        (2     (100     (47

Financing activities

          

Net change in revolving credit facility

     (515     —          —          —          (515

Proceeds from issuance of Second Lien Loans

     500        —          —          —          500   

Repayments made on term loan credit facility

     (32     —          —          —          (32

Net change in securitization obligations

     —          —          (410     —          (410

Debt issuance costs

     (11     —          —          —          (11

Intercompany dividend

     —          —          (96     96        —     

Intercompany note payable

     —          —          (37     37        —     

Intercompany transactions

     463        (364     (99     —          —     

Other, net

     (2     (6     (3     —          (11
                                        

Net cash provided by (used in) financing activities

     403        (370     (645     133        (479
                                        

Effect of changes in exchange rates on cash and cash equivalents

     —          —          3        —          3   

Net (decrease) increase in cash and cash equivalents

     (184     (2     6        (2     (182

Cash and cash equivalents, beginning of period

     378        26        36        (3     437   
                                        

Cash and cash equivalents, end of period

   $ 194      $ 24      $ 42      $ (5   $ 255   
                                        

 

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Consolidating Statement of Cash Flows

For the Year Ended December 31, 2008

(in millions)

 

     Parent
Company
    Guarantor
Subsidiaries
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Net cash (used in) provided by operating activities

   $ (610   $ 375      $ 313      $ 31      $ 109   

Investing activities

          

Property and equipment additions

     (6     (44     (2     —          (52

Net assets acquired (net of cash acquired) and acquisition-related payments

     —          (12     —          —          (12

Proceeds from the sale of property and equipment

     —          7        —          —          7   

Proceeds related to corporate aircraft sale leaseback and termination

     12        —          —          —          12   

Proceeds from the sale of a joint venture

     —          12        —          —          12   

Investment in unconsolidated entities

     —          (3     (1     —          (4

Change in restricted cash

     —          —          10        —          10   

Intercompany note receivable

     —          72        (17     (55     —     

Other, net

     —          —          4        —          4   
                                        

Net cash provided by (used in) investing activities

     6        32        (6     (55     (23

Financing activities

          

Net change in revolving credit facility

     515        —          —          —          515   

Repayments made on term Loan credit facility

     (32     —          —          —          (32

Note payment for 2006 acquisition of Texas American Title Company

     —          (10     —          —          (10

Net change in securitization obligations

     —          —          (258     —          (258

Intercompany dividend

     —          —          (25     25        —     

Intercompany note payable

     —          17        (72     55        —     

Intercompany transactions

     384        (434     50        —          —     

Other, net

     (5     (10     (1     —          (16
                                        

Net cash provided by (used in) financing activities

     862        (437     (306     80        199   
                                        

Effect of changes in exchange rates on cash and cash equivalents

     —          —          (1     —          (1
                                        

Net (decrease) increase in cash and cash equivalents

     258        (30     —          56        284   

Cash and cash equivalents, beginning of period

     120        56        36        (59     153   
                                        

Cash and cash equivalents, end of period

   $ 378      $ 26      $ 36      $ (3   $ 437   
                                        

 

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20. SUBSEQUENT EVENTS

Refinancing Transactions

Debt Exchange Offering

On January 5, 2011, the Company completed a private exchange offer relating to its outstanding Senior Notes, Senior Toggle Notes and Senior Subordinated Notes. Approximately $2,110 million aggregate principal amount were tendered for Convertible Notes, which are convertible at the holder’s option into Common Stock of Holdings and approximately $632 million aggregate principal amount were tendered for the Extended Maturity Notes.

On January 5, 2011, we issued:

 

   

$492 million aggregate principal amount of 11.50% Senior Notes and $1,144 million aggregate principal amount of 11.00% Series A Convertible Notes in exchange for $1,636 million aggregate principal amount of outstanding 10.50% Senior Notes;

 

   

$130 million aggregate principal amount of 12.00% Senior Notes and $291 million aggregate principal amount of 11.00% Series B Convertible Notes in exchange for $421 million aggregate principal amount of outstanding Senior Toggle Notes; and

 

   

$10 million aggregate principal amount of 13.375% Senior Subordinated Notes and $675 million aggregate principal amount of 11.00% Series C Convertible Notes in exchange for $685 million aggregate principal amount of outstanding 12.375% Senior Subordinated Notes.

In addition, upon receipt of the requisite consents from the holders of the Senior Notes and Senior Toggle Notes, we amended the respective indentures governing the terms of such notes to remove substantially all of the restrictive covenants and certain other provisions previously contained in those indentures.

The 11.00% Senior Notes and 12.00% Senior Notes are guaranteed on an unsecured senior basis, and the Convertible Notes and 13.375% 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. The 11.00% Senior Notes and 12.00% Senior Notes are also guaranteed on an unsecured senior subordinated basis, and the Convertible Notes and the 13.375% Senior Subordinated Notes are guaranteed on an unsecured junior subordinated basis, in each case, by Holdings.

As a result of the Debt Exchange Offering, we extended the maturity of approximately $2,742 million aggregate principal amount of our existing unsecured indebtedness to 2017 and 2018, resulting in approximately $303 million aggregate principal amount of Existing Notes maturing in 2014 and 2015. In addition, pursuant to the terms of the indenture governing the terms of the Convertible Notes, the Convertible Notes are redeemable at the Company’s option at a price equal to 90% of the principal amount thereof, plus accrued and unpaid interest to the date of redemption upon a Qualified Public Offering as such term is defined in the indenture.

The Company and Holdings have agreed to: (1) file a registration statement with the SEC, with respect to a registered offer to exchange each series of the Extended Maturity Notes for new exchange notes having terms substantially identical in all material respects to the Extended Maturity Notes of the applicable series (except that the new exchange notes will not contain terms with respect to additional interest or transfer restrictions) or (2) file a shelf registration statement with respect to resales of the Existing Maturity Notes.

The Company and Holdings have also agreed to file a shelf registration statement with respect to resales of the outstanding Convertible Notes and the Class A Common Stock issuable upon conversion of the Convertible Notes.

 

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Amendment to Senior Secured Credit Facility

Effective February 3, 2011, the Company entered into the Senior Secured Credit Facility Amendment and an incremental assumption agreement, which resulted in the following:

 

   

certain lenders extended the maturity of a significant portion of our first lien term loans, revolving commitments and synthetic letter of credit commitments to October 10, 2016, April 10, 2016, and October 10, 2016, respectively, which extensions resulted in approximately $2,424 million aggregate principal amount of extended term loans, approximately $461 million aggregate principal amount of commitments in respect of extended revolving loans and approximately $171 million aggregate principal amount of extended synthetic letter of credit commitments;

 

   

certain lenders simultaneously converted approximately $98 million aggregate principal amount of commitments in respect of extended revolving loans to extended term loans, thereby reducing the commitments under the revolving credit facility to $652 million;

 

   

the net proceeds of the $700 million aggregate principal amount of First and a Half Lien Notes together with cash on hand were used to prepay $700 million of the outstanding extended term loans, thereby reducing the aggregate principal amount of extended term loans to $1,822 million;

 

   

the interest rate with respect to the extended term loans was increased by 1.25% from the rate applicable to the non-extended term loans;

 

   

the interest rate with respect to the extended revolving loans was increased by 1.0% from the rate applicable to the non-extended revolving loans; and

 

   

the fee with respect to the synthetic letter of credit facility was increased by 1.25% from the fee applicable to the non-extending synthetic letter of credit facility.

The Senior Secured Credit Facility Amendment also provides for the following:

 

   

allows for one or more future issuances of additional senior secured notes or unsecured notes or loans to prepay the Company’s first lien term loans, to be secured on either a pari passu basis with, or junior to, its first lien obligations under the senior secured credit facility;

 

   

allows for one or more future issuances of additional senior secured or unsecured notes or loans to prepay the Company’s second lien loans, to be secured on a pari passu basis with, or junior to, its second lien loans under the senior secured credit facility;

 

   

allows for the incurrence of additional incremental term loans that are secured on a junior basis to the second lien loans in an aggregate amount not to exceed $350 million; and

 

   

provides that debt financing secured by a lien that is junior in priority to the first lien obligations under the senior secured credit facility (including, but not limited, to the First and a Half Lien Notes) will not, subject to certain exceptions, constitute senior secured debt for purposes of calculating the senior secured leverage ratio under the senior secured credit facility.

The extended term loans do not require any scheduled amortization of principal. The non-extended term loan facility will continue to provide for quarterly amortization payments totaling 1% per annum of the principal amount of the non-extended first lien term loans.

The Company entered into interest rate swaps to manage a portion of its exposure to changes in interest rates associated with its variable rate borrowings. In order to complete the Senior Secured Credit Facility Amendment, the Company was required to change the term loan facility interest rate from LIBOR to ABR for five days in early February 2011. Due to this change the Company’s interest rate hedge was no longer considered effective in accordance with the FASB’s derivative and hedging guidance as the underlying terms of the hedging transaction did not match the interest rate utilized on the borrowings. As a result, in February 2011, the Company dedesignated the hedge and reclassed $17 million from Accumulated other comprehensive loss to interest expense in the consolidated statement of operations.

 

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Issuance of First and a Half Lien Notes

On February 3, 2011, we issued $700 million aggregate principal amount of First and a Half Lien Notes in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended. The First and a Half Lien Notes are secured by substantially the same collateral as the Company’s existing secured obligations under its senior secured credit facility, but the priority of the collateral liens securing the First and a Half Lien Notes is (i) junior to the collateral liens securing the Company’s first lien obligations under its senior secured credit facility and (ii) senior to the collateral liens securing the Company’s second lien obligations under its senior secured credit facility.

As discussed above, the net proceeds from the offering of the First and a Half Lien Notes, along with cash on hand, were used to prepay $700 million of certain of its first lien term loans that were extended in connection with the Senior Secured Credit Facility Amendment.

Pro Forma Debt Table

The debt table below gives effect to the Refinancing Transactions as if they occurred on December 31, 2010.

 

     Expiration Date    Total
Capacity
     Outstanding
Borrowings
     Available
Capacity
 

Senior Secured Credit Facility:

           

Non-extended revolving credit facility (1)

   April 2013    $ 289       $ —         $ 210   

Extended revolving credit facility (1)

   April 2016      363       $ —           263   

Non-extended term loan facility

   October 2013      635         635         —     

Extended term loan facility

   October 2016      1,822         1,822         —     

First and a Half Lien Notes

   February 2019      700         700         —     

Second Lien Loans

   October 2017      650         650         —     

Other bank indebtedness (2)

   Various      163         163         —     

Existing Notes

           

10.50% Senior Notes

   April 2014      64         64         —     

11.00%/11.75% Senior Toggle Notes

   April 2014      49         49         —     

12.375% Senior Subordinated Notes (3)

   April 2015      190         187         —     

Extended Maturity Notes

           

11.50% Senior Notes (4)

   April 2017      492         488         —     

12.00% Senior Notes (5)

   April 2017      130         129         —     

13.375% Senior Subordinated Notes

   April 2018      10         10         —     

11.00% Convertible Notes

   April 2018      2,110         2,110         —     

Securitization obligations: (6)

           

Apple Ridge Funding LLC

   April 2012      500         296         204   

Cartus Financing Limited (7)

   Various      62         35         27   
                             
      $ 8,229       $ 7,338       $ 704   
                             

 

(1) As of December 31, 2010, there were no outstanding borrowings under the revolving credit facility. The available capacity under this facility was reduced by $79 million and $100 million of outstanding letters of credit on the non-extended and the extended revolving credit facility, respectively at December 31, 2010. On March 1, 2011, the Company had $60 million outstanding on the revolving credit facility.
(2) Consists of revolving credit facilities that are supported by letters of credit issued under the senior secured credit facility, $5 million is due in April 2011, $50 million is due in June 2011, $50 million due November 2011, $50 million is due in January 2013 and $8 million due in May 2015. In February 2011, the Company repaid $55 million of outstanding borrowings under these revolving credit facilities that were due in April and June 2011.

 

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(3) Consists of $190 million of 12.375% Senior Subordinated Notes due 2015, less a discount of $3 million.
(4) Consists of $492 million of 11.50% Senior Notes due 2017, less a discount of $4 million.
(5) Consists of $130 million of 12.00% Senior Notes due 2017, less a discount of $1 million.
(6) Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations.
(7) Consists of a £35 million facility which expires in August 2015 and a £5 million working capital facility which expires in August 2011.

Pro Forma Debt Maturities

Aggregate maturities of debt on a pro forma basis to give effect to the Refinancing Transactions as of December 31, 2010, excluding $331 million of securitization obligations, are as follows:

 

Year

   Amount  

2011

   $ 169   

2012

     6   

2013

     623   

2014

     113   

2015

     187   

Thereafter

     5,909   
        

Total debt

     7,007   

Less: Current portion of long-term debt (1)

     169   
        

Long-term debt

   $ 6,838   
        

 

(1) Current portion of long term debt includes $163 million of outstanding borrowings related to other bank indebtedness and $6 million related to the amortization of the Non-extended term loan facility.

Phantom Value Plan

On January 5, 2011, the Board of Directors of the Company approved the Realogy Corporation Phantom Value Plan (the “Phantom Value Plan”), which is intended to provide certain participants, including the Company’s named executive officers, with an incentive to remain in the service of the Company and to increase their interest in the success of the Company and to receive compensation based upon the Company’s success.

Under the Phantom Value Plan, each participant is eligible to receive a payment with respect to an Incentive Award in three series relating to the three series of Convertible Notes at such time and from time to time that Apollo receives cash upon the discharge or third-party sale of not less than $267,638,044 of the aggregate principal amount of all series of Plan Notes (or on any non-cash consideration into which any series of Plan Notes may have been exchanged or converted). The payment with respect to a particular series of an Incentive Award would be an amount which bears the same ratio to the dollar amount of the Incentive Award relating to such series as (i) the aggregate amount of cash received by Affiliate Holders upon discharge in whole or in part of the principal amount of a particular series of Plan Notes or upon the sale of all or a portion of the principal amount of a particular series of Plan Notes (or upon the discharge, sale, exchange or transfer of any non-cash consideration into which any such series of Plan Notes may have been exchanged or converted) bears to (ii) the aggregate principal amount of such series of Plan Notes held by Affiliate Holders on the date of grant of such Incentive Award. In addition, participants may be eligible to receive additional amounts based upon cash received by the Affiliate Holders pursuant to the terms of any non-cash consideration into which any such series of Plan Notes may have been exchanged or converted.

In the event that a payment is to be made with respect to an Incentive Award in conjunction with or subsequent to a qualified public offering of common stock of the Company or its direct or indirect parent company, a participant may elect to receive stock in lieu of the cash payment in a number of unrestricted shares

 

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of common stock with a fair market value, as determined in good faith by the Compensation Committee, equal to the dollar amount then due on such Incentive Award, plus a number of restricted shares of such common stock with a fair market value, as determined in good faith by the Compensation Committee, equal to the amount then due multiplied by 0.15. The restricted shares of common stock will vest, based on continued employment, on the first anniversary of issuance. In addition, Incentive Awards will be subject to acceleration and payment upon a change of control as specified in the Phantom Value Plan.

On each date the Affiliate Holders receive cash interest on the Plan Notes, participants may be granted stock options under the Holdings 2007 Stock Incentive Plan with an aggregate value (determined on a Black-Scholes basis) equal to an amount which bears the same ratio to the aggregate dollar amount of the participant’s Incentive Award as (i) the aggregate amount of cash interest received by Affiliate Holders on such date bears to (ii) the aggregate principal amount of the Plan Notes held by the Affiliate Holders on the date of grant of the Incentive Award. The stock option grants to Realogy’s CEO, however, would be limited to 50% of the foregoing stock option amount. Generally, each grant of stock options will have a three year vesting schedule, subject to the participant’s continued employment, and vested stock options will become exercisable one year following a qualified public offering. The stock options will have a term of 7.5 years.

Incentive Awards are immediately cancelable and forfeitable in the event of the termination of a participant’s employment for any reason. The Incentive Awards also terminate 10 years following the date of grant.

On January 5, 2011, the Board of Directors of the Company made initial grants of Incentive Awards of approximately $21.8 million to certain executive officers of the Company.

 

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Exhibit Index

 

Exhibit

  

Description

  2.1

   Separation and Distribution Agreement by and among Cendant Corporation, Realogy Corporation, Wyndham Worldwide Corporation and Travelport Inc. dated as of July 27, 2006 (Incorporated by reference to Exhibit 2.1 to Realogy Corporation’s Current Report on Form 8-K filed July 31, 2006).

  2.2

   Letter Agreement dated August 23, 2006 relating to the Separation and Distribution Agreement by and among Realogy Corporation, Cendant Corporation, Wyndham Worldwide Corporation and Travelport Inc. dated as of July 27, 2006 (Incorporated by reference to Exhibit 2.1 to Realogy Corporation’s Current Report on Form 8-K filed August 23, 2006).

  2.3

   Agreement and Plan of Merger, dated as of December 15, 2006, by and among Domus Holdings Corp., Domus Acquisition Corp. and Realogy Corporation (Incorporated by reference to Exhibit 2.1 to Realogy Corporation’s Current Report on Form 8-K filed December 18, 2006).

  3.1

   Amended and Restated Certificate of Incorporation of Realogy Corporation (Incorporated by reference to Exhibit 3.1 to Realogy Corporation’s Current Report on Form 8-K filed April 16, 2007).

  3.2

   Amended and Restated Bylaws of Realogy Corporation, as amended as of February 4, 2008. (Incorporated by reference to Exhibit 3.2 to Realogy Corporation’s Form 10-K for the year ended December 31, 2007)

  4.1

   Indenture dated as of April 10, 2007, by and among Realogy Corporation, the Note Guarantors party thereto and Wells Fargo Bank, National Association, as trustee, governing the 10.50% Senior Notes due 2014 (the “10.50% Senior Note Indenture”) (Incorporated by reference to Exhibit 4.1 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

  4.2

   Supplemental Indenture No. 1 dated as of June 29, 2007 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.2 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

  4.3

   Supplemental Indenture No. 2 dated as of July 23, 2007 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.3 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

  4.4

   Supplemental Indenture No. 3 dated as of December 18, 2007 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.4 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

  4.5

   Supplemental Indenture No. 4 dated as of March 31, 2008 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.1 to Realogy Corporation’s Form 10-Q for the three months ended March 31, 2008).

  4.6

   Supplemental Indenture No. 5 dated as of May 12, 2008 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.1 to Realogy Corporation’s Form 10-Q for the three months ended June 30, 2008).

 4.7

   Supplemental Indenture No. 6 dated as of June 4, 2008 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.4 to Realogy Corporation’s Form 10-Q for the three months ended June 30, 2008).

 4.8

   Supplemental Indenture No. 7 dated as of August 21, 2008 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.1 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2008).

  4.9

   Supplemental Indenture No. 8 dated as of September 15, 2008 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.4 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2008).

 

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Exhibit

  

Description

  4.10

   Supplemental Indenture No. 9 dated as of November 10, 2008 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.10 to Realogy Corporation’s Form 10-K for the year ended December 31, 2008).

  4.11

   Supplemental Indenture No. 10 dated as of December 17, 2008 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.11 to Realogy Corporation’s Form 10-K for the year ended December 31, 2008).

  4.12

   Supplemental Indenture No. 11 dated as of February 27, 2009 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.1 to Realogy Corporation’s Form 10-Q for the three months ended March 31, 2009).

  4.13

   Supplemental Indenture No. 12 dated as of September 14, 2009 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.1 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2009).

  4.14

   Supplemental Indenture No. 13 dated as of December 14, 2009 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.14 to Realogy Corporation’s Form 10-K for the year ended December 31, 2009).

  4.15

   Supplemental Indenture No. 14 dated as of February 25, 2010 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.1 to Realogy Corporation’s Form 10-Q for the three months ended March 31, 2010).

  4.16

   Supplemental Indenture No. 15 dated as of October 15, 2010 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.1 to Realogy Corporation’s Form 8-K filed on December 15, 2010).

  4.17

   Supplemental Indenture No. 16 dated as of November 30, 2010 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.4 to Realogy Corporation’s Form 8-K filed on December 15, 2010).

  4.18

   Supplemental Indenture No. 17 dated as of December 15, 2010 to the 10.50% Senior Note Indenture (Incorporated by reference to Exhibit 4.7 to Realogy Corporation’s Form 8-K filed on December 15, 2010).

  4.19

   Indenture dated as of April 10, 2007 by and among Realogy Corporation, the Note Guarantors party thereto and Wells Fargo Bank, National Association, as trustee, governing the 11.00%/11.75% Senior Toggle Notes due 2014 (the “11.00%/11.75% Senior Toggle Note Indenture”) (Incorporated by reference to Exhibit 4.5 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

  4.20

   Supplemental Indenture No. 1 dated as of June 29, 2007 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.6 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

  4.21

   Supplemental Indenture No. 2 dated as of June 29, 2007 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.7 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

  4.22

   Supplemental Indenture No. 3 dated as of December 18, 2007 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.8 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

  4.23

   Supplemental Indenture No. 4 dated as of March 31, 2008 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.2 to Realogy Corporation’s Form 10-Q for the three months ended March 31, 2008).

 

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Exhibit

  

Description

  4.24

   Supplemental Indenture No. 5 dated as of May 12, 2008 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.2 to Realogy Corporation’s Form 10-Q for the three months ended June 30, 2008).

  4.25

   Supplemental Indenture No. 6 dated as of June 4, 2008 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.5 to Realogy Corporation’s Form 10-Q for the three months ended June 30, 2008).

  4.26

   Supplemental Indenture No. 7 dated as of August 21, 2008 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.2 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2008).

  4.27

   Supplemental Indenture No. 8 dated as of September 15, 2008 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.5 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2008).

  4.28

   Supplemental Indenture No. 9 dated as of November 10, 2008 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.21 to Realogy Corporation’s Form 10-K for the year ended December 31, 2008).

  4.29

   Supplemental Indenture No. 10 dated as of December 17, 2008 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.22 to Realogy Corporation’s Form 10-K for the year ended December 31, 2008).

  4.30

   Supplemental Indenture No. 11 dated as of February 27, 2009 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.2 to Realogy Corporation’s Form 10-Q for the three months ended March 31, 2009).

  4.31

   Supplemental Indenture No. 12 dated as of September 14, 2009 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.2 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2009).

  4.32

   Supplemental Indenture No. 13 dated as of December 14, 2009 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.28 to Realogy Corporation’s Form 10-K for the year ended December 31, 2009).

  4.33

   Supplemental Indenture No. 14 dated as of February 25, 2010 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.2 to Realogy Corporation’s Form 10-Q for the three months ended March 31, 2010).

  4.34

   Supplemental Indenture No. 15 dated as of October 15, 2010 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.2 to Realogy Corporation’s Form 8-K filed on December 15, 2010).

  4.35

   Supplemental Indenture No. 16 dated as of November 30, 2010 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.5 to Realogy Corporation’s Form 8-K filed on December 15, 2010).

  4.36

   Supplemental Indenture No. 17 dated as of December 15, 2010 to the 11.00%/11.75% Senior Toggle Note Indenture (Incorporated by reference to Exhibit 4.8 to Realogy Corporation’s Form 8-K filed on December 15, 2010).

  4.37

   Indenture dated as of April 10, 2007, by and among Realogy Corporation, the Note Guarantors party thereto and Wells Fargo Bank, National Association, as trustee governing the 12.375% Senior Subordinated Notes due 2015 (the “12.375% Senior Subordinated Note Indenture”) (Incorporated by reference to Exhibit 4.9 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

 

G-3


Table of Contents

Exhibit

  

Description

  4.38

   Supplemental Indenture No. 1 dated as of June 29, 2007 to the 12.375% Senior Subordinated Note Indenture (Incorporated by reference to Exhibit 4.10 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

  4.39

   Supplemental Indenture No. 2 dated as of July 23, 2007 to the 12.375% Senior Subordinated Note Indenture (Incorporated by reference to Exhibit 4.11 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

  4.40

   Supplemental Indenture No. 3 dated as of December 18, 2007 to the 12.375% Senior Subordinated Note Indenture (Incorporated by reference to Exhibit 4.12 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

  4.41

   Supplemental Indenture No. 4 dated as of March 31, 2008 to the 12.375% Senior Subordinated Note Indenture (Incorporated by reference to Exhibit 4.3 to Realogy Corporation’s Form 10-Q for the three months ended March 31, 2008).

  4.42

   Supplemental Indenture No. 5 dated as of May 12, 2008 to the 12.375% Senior Subordinated Note Indenture (Incorporated by reference to Exhibit 4.3 to Realogy Corporation’s Form 10-Q for the three months ended June 30, 2008).

  4.43

   Supplemental Indenture No. 6 dated as of June 4, 2008 to the 12.375% Senior Subordinated Note Indenture (Incorporated by reference to Exhibit 4.6 to Realogy Corporation’s Form 10-Q for the three months ended June 30, 2008).

  4.44

   Supplemental Indenture No. 7 dated as of August 21, 2008 to the 12.375% Senior Subordinated Note Indenture (Incorporated by reference to Exhibit 4.3 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2008).

  4.45

   Supplemental Indenture No. 8 dated as of September 15, 2008 to the 12.375% Senior Subordinated Note Indenture (Incorporated by reference to Exhibit 4.6 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2008).

  4.46

   Supplemental Indenture No. 9 dated as of November 10, 2008 to the 12.375% Senior Subordinated Note Indenture (Incorporated by reference to Exhibit 4.32 to Realogy Corporation’s Form 10-K for the year ended December 31, 2008).

  4.47

   Supplemental Indenture No. 10 dated as of December 17, 2008 to the 12.375% Senior Subordinated Note Indenture (Incorporated by reference to Exhibit 4.33 to Realogy Corporation’s Form 10-K for the year ended December 31, 2008).

  4.48

   Supplemental Indenture No. 11 dated as of February 27, 2009 to the 12.375% Senior Subordinated Note Indenture (Incorporated by reference to Exhibit 4.3 to Realogy Corporation’s Form 10-Q for the three months ended March 31, 2009).

  4.49

   Supplemental Indenture No. 12 dated as of September 14, 2009 to the 12.375% Senior Subordinated Note Indenture (Incorporated by reference to Exhibit 4.3 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2009).

  4.50

   Supplemental Indenture No. 13 dated as of December 14, 2009 to the 12.375% Senior Subordinated Notes Indenture (incorporated by reference to Exhibit 4.42 to Realogy Corporation’s Form 10-K for the year ended December 31, 2009).

  4.51

   Supplemental Indenture No. 14 dated as of February 25, 2010 to the 12.375% Senior Subordinated Note Indenture (Incorporated by reference to Exhibit 4.3 to Realogy Corporation’s Form 10-Q for the three months ended March 31, 2010).

  4.52

   Supplemental Indenture No. 15 dated as of October 15, 2010 to the 12.375% Senior Subordinated Notes Indenture (incorporated by reference to Exhibit 4.3 to Realogy Corporation’s Form 8-K filed on December 15, 2010).

 

G-4


Table of Contents

Exhibit

  

Description

  4.53

   Supplemental Indenture No. 16 dated as of November 30, 2010 to the 12.375% Senior Subordinated Notes Indenture (incorporated by reference to Exhibit 4.6 to Realogy Corporation’s Form 8-K filed on December 15, 2010).

  4.54

   Form of 10.50% Senior Notes due 2014 (included in the Indenture incorporated by reference to Exhibit 4.1 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

  4.55

   Form of 11.00%/11.75% Senior Toggle Notes due 2014 (included in the Indenture incorporated by reference to Exhibit 4.5 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

  4.56

   Form of 12.375% Senior Subordinated Notes due 2015 (included in the Indenture incorporated by reference to Exhibit 4.9 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

  4.57

   Agreement of Resignation, Appointment and Acceptance, dated as of January 8, 2008, by and among Realogy Corporation, Wells Fargo Bank, National Association, as resigning trustee, and The Bank of New York, as successor trustee (Incorporated by reference to Exhibit 4.16 to Realogy Corporation’s Form 10-K for the year ended December 31, 2007).

  4.58

   Agreement of Resignation, Appointment and Acceptance, dated as of January 8, 2008, by and among Realogy Corporation, Wells Fargo Bank, National Association, as resigning trustee, and The Bank of New York, as successor trustee (Incorporated by reference to Exhibit 4.17 to Realogy Corporation’s Form 10-K for the year ended December 31, 2007).

  4.59

   Agreement of Resignation, Appointment and Acceptance, dated as of January 8, 2008, by and among Realogy Corporation, Wells Fargo Bank, National Association, as resigning trustee, and The Bank of New York, as successor trustee (Incorporated by reference to Exhibit 4.18 to Realogy Corporation’s Form 10-K for the year ended December 31, 2007).

  4.60*

   Indenture dated as of January 5, 2011 by and among Realogy Corporation, Domus Holdings Corp., the Note Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, governing the 11.50% Senior Notes due 2017 (the “11.50% Senior Note Indenture”).

  4.61*

   Indenture dated as of January 5, 2011 by and among Realogy Corporation, Domus Holdings Corp., the Note Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, governing the 12.00% Senior Notes due 2017 (the “12.00% Senior Note Indenture”).

  4.62*

   Indenture dated as of January 5, 2011 by and among Realogy Corporation, Domus Holdings Corp., the Note Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, governing the 13.375% Senior Subordinated Notes due 2018 (the “13.375% Senior Subordinated Note Indenture”).

  4.63*

   Form of 11.50% Senior Notes due 2017 (Included in the 11.50% Senior Note Indenture filed as Exhibit 4.60 to this Form 10-K).

  4.64*

   Form of 12.00% Senior Notes due 2017 (Included in the 12.00% Senior Note Indenture filed as Exhibit 4.61 to this Form 10-K).

  4.65*

   Form of 13.375% Senior Subordinated Notes due 2018 (Included in the 13.375% Senior Subordinated Note Indenture filed as Exhibit 4.62 to this Form 10-K).

  4.66*

   Registration Rights Agreement dated as of January 5, 2011, by and among Realogy Corporation, Domus Holdings Corp., the Note Guarantors party thereto and J.P. Morgan Securities LLC, Credit Suisse (USA) LLC and Goldman, Sachs & Co. relating to the 11.50% Senior Notes due 2017.

  4.67*

   Registration Rights Agreement dated as of January 5, 2011, by and among Realogy Corporation, Domus Holdings Corp., the Note Guarantors party thereto and J.P. Morgan Securities LLC, Credit Suisse (USA) LLC and Goldman, Sachs & Co. relating to the 12.00% Senior Notes due 2017.

 

G-5


Table of Contents

Exhibit

  

Description

  4.68*

   Registration Rights Agreement dated as of January 5, 2011, by and among Realogy Corporation, Domus Holdings Corp., the Note Guarantors party thereto and J.P. Morgan Securities LLC, Credit Suisse (USA) LLC and Goldman, Sachs & Co. relating to the 13.375% Senior Subordinated Notes due 2018.

  4.69*

   Indenture dated as of January 5, 2011, by and among Realogy Corporation, Domus Holdings Corp., the Note Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, governing the 11.00% Series A Convertible Senior Subordinated Notes due 2018, the 11.00% Series B Convertible Senior Subordinated Notes due 2018 and the 11.00% Series C Convertible Senior Subordinated Notes due 2018 (the “Convertible Note Indenture”).

  4.70*

   Form of 11.00% Series A Convertible Senior Subordinated Notes due 2018 (Included in the Convertible Note Indenture filed as Exhibit 4.69 to this Form 10-K).

  4.71*

   Form of 11.00% Series B Convertible Senior Subordinated Notes due 2018 (Included in the Convertible Note Indenture filed as Exhibit 4.69 to this Form 10-K).

  4.72*

   Form of 11.00% Series C Convertible Senior Subordinated Notes due 2018 (Included in the Convertible Note Indenture filed as Exhibit 4.69 to this Form 10-K).

  4.73*

   Registration Rights Agreement dated as of January 5, 2011, by and among Realogy Corporation, Domus Holdings Corp., the Note Guarantors party thereto and J.P. Morgan Securities LLC, Credit Suisse (USA) LLC and Goldman, Sachs & Co. relating to the 11.00% Series A Convertible Senior Subordinated Notes due 2018, the 11.00% Series B Convertible Senior Subordinated Notes due 2018 and the 11.00% Series C Convertible Senior Subordinated Notes due 2018.

  4.74*

   Indenture dated as of February 3, 2011, by and among Realogy Corporation, Domus Holdings Corp., the Note Guarantors party thereto and the Bank of New York Mellon Trust Company, N.A., as trustee, governing the 7.875% Senior Secured Notes due 2019 (the “Senior Secured Note Indenture”).

  4.75*

   Form of 7.875% Senior Secured Notes due 2019 (Included in the Senior Secured Note Indenture filed as Exhibit 4.74 to this Form 10-K).

10.1

   Tax Sharing Agreement by and among Realogy Corporation, Cendant Corporation, Wyndham Worldwide Corporation and Travelport Inc. dated as of July 28, 2006 (Incorporated by reference to Exhibit 10.1 to Realogy Corporation’s Quarterly Report on Form 10-Q for the three months ended June 30, 2009).

10.2

   Amendment executed July 8, 2008 and effective as of July 26, 2006 to the Tax Sharing Agreement filed as Exhibit 10.1 (Incorporated by reference to Exhibit 10.2 to Realogy Corporation’s Form 10-Q for the three months ended June 30, 2008).

10.3

   Credit Agreement dated as of April 10, 2007, by and among Realogy Corporation, Domus Intermediate Holdings Corp., the Lenders party thereto, JPMorgan Chase Bank, N.A., Credit Suisse, Bear Stearns Corporate Lending Inc., Citicorp North America, Inc. and Barclays Bank plc. (Incorporated by reference to Exhibit 10.2 to Realogy Corporation’s Form 10-Q for the three months ended June 30, 2009).

10.4

   First Amendment, dated as of January 26, 2011 to the Credit Agreement, dated as of April 10, 2007, among Domus Intermediate Holdings Corp., Realogy Corporation, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other agents from time to time party thereto (Incorporated by reference to Exhibit 10.1 to Realogy Corporation’s Form 8-K filed on January 27, 2011).

10.5

   Incremental Assumption Agreement, dated as of September 28, 2009, by and among Domus Intermediate Holdings Corp., Realogy Corporation, the Second Lien Term Lenders (as defined therein), JPMorgan Chase Bank, N.A., as administrative agent for the First Priority Secured Parties (as defined therein), and Wilmington Trust Company, as collateral agent for the Second Priority Secured Parties (as defined therein) (Incorporated by reference to Exhibit 10.3 to Realogy Corporation’s Form 10-Q for the three months ended June 30, 2009).

 

G-6


Table of Contents

Exhibit

  

Description

10.6*

   Incremental Assumption Agreement, dated as of February 3, 2011, by and among Domus Intermediate Holdings Corp., the First Lien Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.

10.7

   Guarantee and Collateral Agreement dated as of April 10, 2007, among Domus Intermediate Holdings Corp., Realogy Corporation, each Subsidiary Loan Party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (Incorporated by reference to Exhibit 10.3 to Realogy Corporation’s Form 10-Q for the three months ended June 30, 2009) .

10.8

   First Amendment, dated as of September 28, 2009, to the Guarantee and Collateral Agreement, dated as of April 10, 2007, by and among Domus Intermediate Holdings Corp., Realogy Corporation, the subsidiaries of Realogy Corporation signatory thereto and JPMorgan Chase Bank, N.A., as administrative agent (Incorporated by reference to Exhibit 10.4 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2009).

10.9*

   Collateral Agreement, dated as of February 3, 2011, among Domus Intermediate Holdings Corp., Realogy Corporation, each Subsidiary Guarantor identified therein and party thereto and the Bank of New York Mellon Trust Company, N.A., as Collateral Agent.

10.10

   Second Lien Guarantee and Collateral Agreement, dated and effective as of September 28, 2009, among Domus Intermediate Holdings Corp., Realogy Corporation, each Subsidiary Loan Party identified therein and party hereto and Wilmington Trust Company, as collateral agent for the Secured Loan Parties (as defined therein) (Incorporated by reference to Exhibit 10.5 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2009).

10.11*

   Intercreditor Agreement, dated as of February 3, 2011, among JPMorgan Chase Bank, N.A., as Administrative Agent for the First Lien Senior Priority Secured Parties, the Bank of New York Mellon Trust Company, N.A., as Collateral Agent, Realogy Corporation and each of the other Loan Parties party thereto.

10.12

   Intercreditor Agreement, dated as of September 28, 2009, among JPMorgan Chase Bank, N.A., as Administrative Agent for the First Priority Secured Parties (as defined therein), Wilmington Trust Company, as Second Lien Collateral Agent for the Second Priority Secured Parties (as defined therein), Realogy Corporation and each of the other Loan Parties (as defined therein) (Incorporated by reference to Exhibit 10.6 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2009).

10.13*

   Joinder Agreement No. 1, dated as of February 3, 2011, to the Intercreditor Agreement, dated as of September 28, 2009, among JPMorgan Chase Bank, N.A., as First Priority Representative for the First Priority Secured Parties, Wilmington Trust Company, as Second Priority Representative for the Second Priority Secured Parties, Realogy Corporation and each of the other Loan Parties party thereto.

10.14+

   Letter Agreement dated as of September 24, 2009, by and among Realogy Corporation, Apollo Management VI, L.P., RCIV Holdings (Luxembourg) S.à.r.l., certain investment funds managed by Apollo Management VI, L.P., and Icahn Partners, L.P. and certain of its affiliates (Incorporated by reference to Exhibit 10.9 to Realogy Corporation’s Form 10-K for the year ended December 31, 2009).

10.15**

   Employment Agreement dated as of July 31, 2006 between Realogy Corporation and Henry R. Silverman (Incorporated by reference to Exhibit 10.3 to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

10.16**

   Letter Agreement dated December 19, 2006, between Realogy and Henry R. Silverman amending Employment Agreement between Realogy Corporation and Henry R. Silverman (Incorporated by reference to Exhibit 10.3(a) to Annual Report on Form 10-K for the fiscal year ended December 31, 2006).

 

G-7


Table of Contents

Exhibit

  

Description

10.17**

   Term Sheet dated November 13, 2007, among Domus Holdings Corp., Domus Intermediate Holdings Corp., Realogy Corporation and Henry R. Silverman (Incorporated by reference to Exhibit 10.7 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

10.18**

   Option Agreement dated as of November 13, 2007, between Domus Holdings Corp. and Henry R. Silverman (Incorporated by reference to Exhibit 10.8 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

10.19* **

   Employment Agreement, dated as of April 10, 2007 between Realogy Corporation and Richard A. Smith.

10.20* **

   Employment Agreement, dated as of April 10, 2007 between Realogy Corporation and Anthony E. Hull.

10.21* **

   Employment Agreement, dated as of April 10, 2007 between Realogy Corporation and Alexander E. Perriello.

10.22* **

   Employment Agreement, dated as of April 10, 2007 between Realogy Corporation and Bruce G. Zipf.

10.23**

   Domus Holdings Corp. 2007 Stock Incentive Plan, as amended and restated as of November 13, 2007 and as further amended and restated on November 9, 2010 (Incorporated by reference to Exhibit 10.5 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2010).

10.24**

   Form of Option Agreement between Domus Holdings Corp. and the Optionee party thereto governing time and performance vesting options (Incorporated by reference to Exhibit 10.14 to Realogy Corporation’s Registration Statement on Form S-4 (File No. 333-148153)).

10.25**

   Form of Restricted Stock Agreement between Domus Holdings Corp. and the Purchaser party thereto (Incorporated by reference to Exhibit 10.8 to Realogy Corporation’s Quarterly Report on Form 10-Q for the three months ended June 30, 2009).

10.26**

   Form of Option Agreement between Domus Holdings Corp. and the Optionee party thereto governing time-vesting options (Incorporated by reference to Exhibit 10.6 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2010).

10.27*

   Support Agreement dated as of November 30, 2010, by and among Realogy Corporation, Domus Holdings Corp., RCIV Holdings (Luxembourg) S.à.r.l., Avenue Capital Management II, L.P., and Paulson and Co. inc. (on behalf of the several investment funds and accounts managed by it).

10.28*

   Amended and Restated Investor Securityholders Agreement dated as of January 5, 2011, by and among Domus Holdings Corp., Realogy Corporation, Paulson and Co. inc. on behalf of the several investment funds and accounts managed by it, and the Apollo Holders (as defined therein).

10.29*

   Amended and Restated Investor Securityholders Agreement dated as of January 5, 2011, by and among Domus Holdings Corp., Realogy Corporation, Avenue Capital Management II, L.P. and the Apollo Holders (as defined therein).

10.30*

   Investor Securityholders Agreement dated as of January 5, 2011, by and among Domus Holdings Corp., Realogy Corporation, the Apollo Holders (as defined therein) and Western Asset Management Company, as investment manager on behalf of its client accounts.

10.31*

   Investor Securityholders Agreement dated as of January 5, 2011, by and among Domus Holdings Corp., Realogy Corporation, the Apollo Holders (as defined therein) and York Capital Management, L.P. and affiliated funds.

 

G-8


Table of Contents

Exhibit

  

Description

10.32*

   Amended and Restated Securityholders Agreement dated as of January 5, 2011, by and among Domus Holdings Corp., Domus Investment Holdings, LLC, RCIV Holdings, L.P. (Cayman) RCIV Holdings (Luxembourg) S.à.r.l., Apollo Investment Fund VI, L.P. and Domus Co-Investment Holdings LLC.

10.33* **

   Amended and Restated Management Investor Rights Agreement dated as of January 5, 2011, by and among Domus Holdings Corp., Apollo Investment Fund VI, L.P., Domus Investment Holdings, LLC and the Holders party thereto (including the named executive officers of Realogy Corporation).

10.34**

   Realogy Corporation Officer Deferred Compensation Plan (Incorporated by reference to Exhibit 10.8 to Amendment No. 2 to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

10.35**

   First Amendment to Realogy Corporation Officer Deferred Compensation Plan dated February 29, 2008 (Incorporated by reference to Exhibit 10.53 to Realogy Corporation’s Form 10-K for the year ended December 31, 2007).

10.36 **

   Realogy Corporation Officer Deferred Compensation Plan, Amended and Restated as of January 1, 2008 (Incorporated by reference to Exhibit 10.20 to Realogy Corporation’s Form 10-K for the year ended December 31, 2008).

10.37 **

   First Amendment to Amended and Restated Realogy Corporation Officer Deferred Compensation Plan dated December 23, 2008 (Incorporated by reference to Exhibit 10.21 to Realogy Corporation’s Form 10-K for the year ended December 31, 2008).

10.38++

   Amended and Restated Limited Liability Company Operating Agreement of PHH Home Loans, LLC dated as of January 31, 2005, by and between PHH Broker Partner Corporation and Cendant Real Estate Services Venture Partner, Inc. (Incorporated by reference to Exhibit 10.26 to Realogy Corporation’s Form 10-K for the year ended December 31, 2009).

10.39

   Amendment Number 1 to the Amended and Restated Limited Liability Company Operating Agreement of PHH Home Loans, LLC, dated as of April 2005, by and between PHH Broker Partner Corporation and Cendant Real Estate Services Venture Partner, Inc. (Incorporated by reference to Exhibit 10.10(a) to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

10.40

   Amendment Number 2 to the Amended and Restated Limited Liability Company Operating Agreement of PHH Home Loans, LLC, dated as of March 31, 2006, by and between PHH Broker Partner Corporation and Cendant Real Estate Services Venture Partner, Inc. (Incorporated by reference to Exhibit 10.10(b) to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

10.41+++

   Strategic Relationship Agreement, dated as of January 31, 2005, by and among Cendant Real Estate Services Group, LLC, Cendant Real Estate Services Venture Partner, Inc., PHH Corporation, Cendant Mortgage Cororation, PHH Broker Partner Corporation and PHH Home Loans, LLC. (Incorporated by reference to Exhibit 10.29 to Realogy Corporation’s Form 10-K for the year ended December 31, 2009).

10.42

   Amendment Number 1 to the Strategic Relationship Agreement, dated May 2005 by and among Cendant Real Estate Services Group, LLC, Cendant Real Estate Services Venture Partner, Inc., PHH Corporation, PHH Mortgage Corporation, PHH Broker Partner Corporation and PHH Home Loans, LLC (Incorporated by reference to Exhibit 10.11(a) to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

 

G-9


Table of Contents

Exhibit

  

Description

10.43

   Consent and Amendment dated as of March 14, 2007, between Realogy Real Estate Services Group, LLC (formerly Cendant Real Estate Services Group, LLC), Realogy Real Estate Services Venture Partner, Inc. PHH Corporation, PHH Mortgage Corporation, PHH Broker Partner Corporation, TM Acquisition Corp., Coldwell Banker Real Estate Corporation, Sotheby’s International Realty Affiliates, Inc., ERA Franchise Systems, Inc. Century 21 Real Estate LLC and PHH Home Loans, LLC (Incorporated by reference to Exhibit 10.1 to PHH Corporation, Current Report on Form 8-K filed March 20, 2007).

10.44

   Trademark License Agreement, dated as of February 17, 2004, among SPTC Delaware LLC (as assignee of SPTC, Inc.), Sotheby’s (as successor to Sotheby’s Holdings, Inc.), Cendant Corporation and Monticello Licensee Corporation (Incorporated by reference to Exhibit 10.12 to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

10.45

   Amendment No. 1 to Trademark License Agreement, dated May 2, 2005, by and among SPTC Delaware LLC (as assignee of SPTC, Inc.), Sotheby’s (as successor to Sotheby’s Holdings, Inc.), Cendant Corporation and Sotheby’s International Realty Licensee Corporation (f/k/a Monticello Licensee Corporation) (Incorporated by reference to Exhibit 10.12(a) to Registration Statement on Form 10 (File No. 001-32852)).

10.46

   Amendment No. 2 to Trademark License Agreement, dated May 2, 2005, by and among SPTC Delaware LLC (as assignee of SPTC, Inc.), Sotheby’s (as successor to Sotheby’s Holdings, Inc.), Cendant Corporation and Sotheby’s International Realty Licensee Corporation (f/k/a Monticello Licensee Corporation) (Incorporated by reference to Exhibit 10.12(b) to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

10.47

   Consent of SPTC Delaware LLC, Sotheby’s (as successor to Sotheby’s Holdings, Inc.) and Sotheby’s International Realty License Corporation (Incorporated by reference to Exhibit 10.12(c) to Amendment No. 5 to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

10.48

   Joinder Agreement dated as of January 1, 2005, between SPTC Delaware LLC, Sotheby’s (as successor to Sotheby’s Holdings, Inc.), and Cendant Corporation and Sotheby’s International Realty Licensee Corporation (Incorporated by reference to Exhibit 10.11 to Realogy Corporation’s Quarterly Report on Form 10-Q for the three months ended June 30, 2009).

10.49*

   Amendment No. 3 to Trademark License Agreement dated January 14, 2011, by and among SPTC Delaware LLC (as assignee of SPTC, Inc.) and Sotheby’s, as successor by merger to Sotheby’s Holdings, Inc., on the one hand, and Realogy Corporation, as successor to Cendant Corporation, and Sotheby’s International Realty Licensee (f/k/a Monticello Licensee Corporation).

10.50

   Lease, dated as of December 29, 2000, between One Campus Associates, L.L.C. and Cendant Operations, Inc. (Incorporated by reference to Exhibit 10.13 to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

10.51

   First Amendment of Lease, dated October 16, 2001, by and between One Campus Associates, L.L.C. and Cendant Operations, Inc. (Incorporated by reference to Exhibit 10.13(a) to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

10.52

   Second Amendment to Lease, dated as of June 7, 2002, by and between One Campus Associates, L.L.C. and Cendant Operations, Inc. (Incorporated by reference to Exhibit 10.13(b) to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

10.53

   Third Amendment to Lease, dated as of April 28, 2003, by and between DB Real Estate One Campus Drive, L.P. and Cendant Operations, Inc. (Incorporated by reference to Exhibit 10.13(c) to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

 

G-10


Table of Contents

Exhibit

  

Description

10.54

   Office Building Lease, dated as of August 29, 2003, between MV Plaza, Inc. and Cendant Corporation (Incorporated by reference to Exhibit 10.14 to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

10.55

   Agreement of Lease, dated as of August 11, 1997, between MMP Realty, LLC and HFS Mobility Services, Inc. (Incorporated by reference to Exhibit 10.15 to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

10.56

   First Amendment to Agreement of Lease, dated as of November 4, 2004, by and between MMP Realty, LLC and Cendant Operations, Inc. (Incorporated by reference to Exhibit 10.15(a) to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

10.57

   Second Amendment to Agreement of Lease, dated as of April 18, 2005, by and between MMP Realty, LLC and Cendant Operations, Inc. (Incorporated by reference to Exhibit 10.15(b) to Realogy Corporation’s Registration Statement on Form 10 (File No. 001-32852)).

10.58++++

   Sixth Omnibus Amendment Agreement and Consent, dated as of June 6, 2007, among Cartus Corporation, Cartus Financial Corporation, Apple Ridge Services Corporation, Apple Ridge Funding LLC, Realogy Corporation, The Bank of New York, the conduit purchasers, committed purchasers, managing Agents and Calyon New York Branch (Incorporated by reference to Exhibit 10.12 to Realogy Corporation’s Quarterly Report on Form 10-Q for the three months ended June 30, 2009).

10.59++++

   Amended and Restated Series 2007-1 Indenture Supplement, dated as of April 10, 2007 and Amended and Restated as of July 6, 2007, between Apple Ridge Funding LLC and The Bank of New York, as indenture trustee, paying agent, authentication agent, transfer agent and registrar, which modifies the Master Indenture, dated as of April 25, 2000, among Apple Ridge Funding LLC and The Bank of New York, as indenture trustee, paying agent, authentication agent, transfer agent and registrar (Incorporated by reference to Exhibit 10.13 to Realogy Corporation’s Quarterly Report on Form 10-Q for the three months ended June 30, 2009).

10.60

   Amendment No. 1 to Series 2007-1 Indenture Supplement dated as of September 8, 2009, among Apple Ridge Funding LLC, as Issuer, and The Bank of New York, as indenture trustee, paying agent, authentication agent and transfer agent and registrar (Incorporated by reference to Exhibit 10.1 to Realogy Corporation’s Quarterly Report on Form 10-Q for the three months ended September 30, 2009).

10.61

   Amended and Restated Note Purchase Agreement, dated as of April 10, 2007 and Amended and Restated as of July 6, 2007 among Apple Ridge Funding LLC, Cartus Corporation, the conduit purchasers, committed purchases and managing agents party thereto and Calyon New York Branch, as administrative and lead arranger (Incorporated by reference to Exhibit 10.14 to Realogy Corporation’s Quarterly Report on Form 10-Q for the three months ended June 30, 2009).

10.62

   Consent dated April 30, 2008, by and among Cartus Corporation, Cartus Financial Corporation, Apple Ridge Services Corporation, Apple Ridge Funding LLC and the Noteholders signatory thereto (Incorporated by reference to Exhibit 10.1 to Realogy Corporation’s Form 10-Q for the three months ended March 31, 2008).

10.63**

   Employment Agreement, dated as of April 10, 2007 between Realogy Corporation and Kevin J. Kelleher (Incorporated by reference to Exhibit 10.50 to Realogy Corporation’s Form 10-K for the year ended December 31, 2007).

10.64**

   Form of Option Agreement for Independent Directors (Incorporated by reference to Exhibit 10.51 to Realogy Corporation’s Form 10-K for the year ended December 31, 2007).

 

G-11


Table of Contents

Exhibit

  

Description

10.65**

   Restricted Stock Award for Independent Directors (Incorporated by reference to Exhibit 10.52 to Realogy Corporation’s Form 10-K for the year ended December 31, 2007).

10.66**

   2008 Realogy Corporation Bonus Plan for Executive Officers (Incorporated by reference to Exhibit 10.54 to Realogy Corporation’s Form 10-K for the year ended December 31, 2007 (Incorporated by reference to Exhibit 10.54 to Realogy Corporation’s Form 10-K for the year ended December 31, 2007).

10.67**

   2008 - 2009 Realogy Corporation Cash Retention Plan (Incorporated by reference to Exhibit 10.62 to Realogy Corporation’s Form 10-K for the year ended December 31, 2008).

10.68**

   Amended and Restated 2009 Realogy Multi-Year Executive Retention Plan (Terminated in November 2010) (Incorporated by reference to Exhibit 10.58 to Realogy Corporation’s Form 10-K for the year ended December 31, 2009).

10.69**

   Realogy 2011-2012 Multi-Year Retention Plan (Incorporated by reference to Exhibit 10.4 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2010).

10.70* **

   Realogy Corporation Phantom Value Plan.

10.71

   Agreement dated July 15, 2010, between Realogy Corporation and Wyndham Worldwide Corporation (Incorporated by reference to Exhibit 10.1 to Realogy Corporation’s Form 8-K filed on July 20, 2010).

10.72*

   Conversion Shares Agreement, dated as of January 5, 2011, by and between Realogy Corporation and Domus Holdings Corp.

21.1*

   Subsidiaries of Realogy Corporation.

24.1*

   Power of Attorney of Directors and Officers of the registrants (included on signature pages to this Form 10-K).

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.

 

* Filed herewith.
** Compensatory plan or arrangement.
+ Confidential treatment has been granted for certain portions of this Exhibit, which was filed as Exhibit 10.2 to Realogy Corporation’s Form 10-Q for the three months ended September 30, 2009. This Exhibit was re-filed with fewer redactions as Exhibit 10.9 to Realogy Corporation’s Form 10-K for the year ended December 31, 2009. The redacted portions of this Exhibit have been filed separately with the Securities and Exchange Commission.
++ Confidential treatment has been granted for certain portions of this Exhibit, which was filed as Exhibit 10.9 to Realogy Corporation’s Form 10-Q for the three months ended June 30, 2009. This Exhibit was re-filed with fewer redactions as Exhibit 10.26 to Realogy Corporation’s Form 10-K for the year ended December 31, 2009. The redacted portions of this Exhibit have been filed separately with the Securities and Exchange Commission.
+++ Confidential treatment has been granted for certain portions of this Exhibit, which was filed as Exhibit 10.10 to Realogy Corporation’s Form 10-Q for the three months ended June 30, 2009. This Exhibit was re-filed with fewer redactions as Exhibit 10.29 to Realogy Corporation’s Form 10-K for the year ended December 31, 2009. The redacted portions of this Exhibit have been filed separately with the Securities and Exchange Commission.
++++ Confidential treatment has been granted for certain portions of this Exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended, which portions have been omitted and filed separately with the Securities and Exchange Commission.

 

G-12


Table of Contents

REALOGY CORPORATION

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 2010, DECEMBER 31, 2009

AND DECEMBER 31, 2008

(in millions)

 

          Additions              

Description

  Balance at
Beginning of
Period
    Charged to
Costs and
Expenses
    Charged to
Other
Accounts
    Deductions     Balance at
End of
Period
 

Allowance for doubtful accounts (a)

         

Year ended December 31, 2010

  $ 63      $ 13      $ 4      $ (15   $ 65   

Year ended December 31, 2009

  $ 43      $ 21      $ 5      $ (6   $ 63   

Year ended December 31, 2008

  $ 14      $ 24      $ 10      $ (5   $ 43   

Reserve for development advance notes,
short term (b)

         

Year ended December 31, 2010

  $ 3      $ —        $ —        $ (1   $ 2   

Year ended December 31, 2009

  $ 3      $ —        $ —        $ —        $ 3   

Year ended December 31, 2008

  $ 2      $ 1      $ —        $ —        $ 3   

Reserve for development advance notes, long term (b)

         

Year ended December 31, 2010

  $ 17      $ (5   $ —        $ (3   $ 9   

Year ended December 31, 2009

  $ 21      $ 2      $ —        $ (6   $ 17   

Year ended December 31, 2008

  $ 11      $ 10      $ —        $ —        $ 21   

Deferred tax asset valuation allowance

         

Year ended December 31, 2010

  $ 124      $ —        $ —        $ (6   $ 118   

Year ended December 31, 2009

  $ 61      $ 63      $ —        $ —        $ 124   

Year ended December 31, 2008

  $ 10      $ 51      $ —        $ —        $ 61   

 

(a) The deduction column represents uncollectible accounts written off, net of recoveries from Trade Receivables in the Consolidated Balance Sheets.
(b)

Short-term development advance notes are included in Trade Receivables in the Consolidated Balance Sheets.

Exhibit 4.60

 

 

 

INDENTURE

Dated as of January 5, 2011

Among

REALOGY CORPORATION,

DOMUS HOLDINGS CORP.,

THE NOTE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Trustee

11.50% SENIOR NOTES DUE 2017

 

 

 


CROSS-REFERENCE TABLE*

 

TIA Section

   Indenture Section

310(a)(1)

   7.10

      (a)(2)

   7.10

      (a)(3)

   N.A.

      (a)(4)

   N.A.

      (a)(5)

   7.10

      (b)

   7.10

      (c)

   N.A.

311(a)

   7.11

      (b)

   7.11

      (c)

   N.A.

312(a)

   2.05

      (b)

   14.03

      (c)

   14.03

313(a)

   7.06

      (b)(1)

   N.A.

      (b)(2)

   7.06;7.07

      (c)

   7.06;14.02

      (d)

   7.06

314(a)

   4.03; 4.04; 14.02; 14.05

      (b)

   N.A.

      (c)(1)

   14.04

      (c)(2)

   14.04

      (c)(3)

   N.A.

      (d)

   N.A.

      (e)

   14.05

      (f)

   N.A.

315(a)

   7.01

      (b)

   7.05;14.02

      (c)

   7.01

      (d)

   7.01

      (e)

   6.14

316(a)(last sentence)

   2.09

      (a)(1)(A)

   6.05

      (a)(1)(B)

   6.04

      (a)(2)

   N.A.

      (b)

   6.07

      (c)

   2.12;9.04

317(a)(1)

   6.08

      (a)(2)

   6.12

      (b)

   2.04

318(a)

   14.01

      (b)

   N.A.

      (c)

   14.01

N.A. means not applicable.

* This Cross-Reference Table is not part of the Indenture.

 


TABLE OF CONTENTS

 

          Page  

ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE

     1   

Section 1.01.

   Definitions      1   

Section 1.02.

   Other Definitions      44   

Section 1.03.

   Incorporation by Reference of TIA      46   

Section 1.04.

   Rules of Construction      47   

Section 1.05.

   Acts of Holders      48   

ARTICLE 2 THE NOTES

     49   

Section 2.01.

   Form and Dating; Terms      49   

Section 2.02.

   Execution and Authentication      50   

Section 2.03.

   Registrar and Paying Agent      50   

Section 2.04.

   Paying Agent to Hold Money in Trust      50   

Section 2.05.

   Holder Lists      51   

Section 2.06.

   Transfer and Exchange      51   

Section 2.07.

   Replacement Notes      52   

Section 2.08.

   Outstanding Notes      52   

Section 2.09.

   Treasury Notes      53   

Section 2.10.

   Temporary Notes      53   

Section 2.11.

   Cancellation      53   

Section 2.12.

   Defaulted Interest      53   

Section 2.13.

   CUSIP Numbers      54   

Section 2.14.

   Calculation of Principal Amount of Notes      54   

ARTICLE 3 REDEMPTION

     54   

Section 3.01.

   Notices to Trustee      54   

Section 3.02.

   Selection of Notes to Be Redeemed or Purchased      54   

Section 3.03.

   Notice of Redemption      55   

Section 3.04.

   Effect of Notice of Redemption      56   

Section 3.05.

   Deposit of Redemption or Purchase Price      56   

Section 3.06.

   Notes Redeemed or Purchased in Part      56   

Section 3.07.

   Optional Redemption      57   

Section 3.08.

   Mandatory Redemption      58   

Section 3.09.

   Offers to Repurchase by Application of Excess Proceeds      58   

ARTICLE 4 COVENANTS

     60   

Section 4.01.

   Payment of Notes      60   

Section 4.02.

   Maintenance of Office or Agency      60   

Section 4.03.

   Reports and Other Information      60   

Section 4.04.

   Compliance Certificate      62   

Section 4.05.

   Taxes      62   

Section 4.06.

   Stay, Extension and Usury Laws      62   

Section 4.07.

   Limitation on Restricted Payments      62   

Section 4.08.

   Dividend and Other Payment Restrictions Affecting Subsidiaries      68   

 

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          Page  

Section 4.09.

   Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock      70   

Section 4.10.

   Asset Sales      76   

Section 4.11.

   Transactions with Affiliates      78   

Section 4.12.

   Liens      81   

Section 4.13.

   Corporate Existence      81   

Section 4.14.

   Offer to Repurchase Upon Change of Control      81   

Section 4.15.

   Future Note Guarantor      84   

Section 4.16.

   Limitation on Repayments of Existing Notes      84   

Section 4.17.

   Suspension of Certain Covenants      84   

ARTICLE 5 SUCCESSORS

     85   

Section 5.01.

   Merger, Amalgamation Consolidation or Sale of All or Substantially All Assets      85   

Section 5.02.

   Successor Entity Substituted      88   

ARTICLE 6 DEFAULTS AND REMEDIES

     88   

Section 6.01.

   Events of Default      88   

Section 6.02.

   Acceleration      90   

Section 6.03.

   Other Remedies      90   

Section 6.04.

   Waiver of Past Defaults      91   

Section 6.05.

   Control by Majority      91   

Section 6.06.

   Limitation on Suits      91   

Section 6.07.

   Rights of Holders of Notes to Receive Payment      91   

Section 6.08.

   Collection Suit by Trustee      92   

Section 6.09.

   Restoration of Rights and Remedies      92   

Section 6.10.

   Rights and Remedies Cumulative      92   

Section 6.11.

   Delay or Omission Not Waiver      92   

Section 6.12.

   Trustee May File Proofs of Claim      92   

Section 6.13.

   Priorities      93   

Section 6.14.

   Undertaking for Costs      93   

ARTICLE 7 TRUSTEE

     93   

Section 7.01.

   Duties of Trustee      93   

Section 7.02.

   Rights of Trustee      94   

Section 7.03.

   Individual Rights of Trustee      96   

Section 7.04.

   Trustee’s Disclaimer      96   

Section 7.05.

   Notice of Defaults      96   

Section 7.06.

   Reports by Trustee to Holders of the Notes      96   

Section 7.07.

   Compensation and Indemnity      97   

Section 7.08.

   Replacement of Trustee      97   

Section 7.09.

   Successor Trustee by Merger, etc.      98   

Section 7.10.

   Eligibility; Disqualification      98   

Section 7.11.

   Preferential Collection of Claims Against the Issuer      98   

ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE

     99   

Section 8.01.

   Option to Effect Legal Defeasance or Covenant Defeasance      99   

 

-ii-


          Page  

Section 8.02.

   Legal Defeasance and Discharge      99   

Section 8.03.

   Covenant Defeasance      99   

Section 8.04.

   Conditions to Legal or Covenant Defeasance      100   

Section 8.05.

   Deposited Money and Government Obligations to Be Held in Trust; Other Miscellaneous Provisions      101   

Section 8.06.

   Repayment to the Issuer      102   

Section 8.07.

   Reinstatement      102   

ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER

     102   

Section 9.01.

   Without Consent of Holders of Notes      102   

Section 9.02.

   With Consent of Holders of Notes      103   

Section 9.03.

   Compliance with TIA      105   

Section 9.04.

   Revocation and Effect of Consents      105   

Section 9.05.

   Notation on or Exchange of Notes      105   

Section 9.06.

   Trustee to Sign Amendments, etc.      106   

ARTICLE 10 NOTE GUARANTEES

     106   

Section 10.01.

   Note Guarantee      106   

Section 10.02.

   Limitation on Note Guarantor Liability      108   

Section 10.03.

   Execution and Delivery      108   

Section 10.04.

   Subrogation      108   

Section 10.05.

   Benefits Acknowledged      109   

Section 10.06.

   Release of Note Guarantees      109   

Section 10.07.

   Securitization Acknowledgement      110   

ARTICLE 11 HOLDINGS GUARANTEE

     111   

Section 11.01.

   Holdings Guarantee      111   

Section 11.02.

   Limitation on Holdings Liability      113   

Section 11.03.

   Execution and Delivery      113   

Section 11.04.

   Subrogation      113   

Section 11.05.

   Benefits Acknowledged      114   

Section 11.06.

   Release of Holdings Guarantee      114   

ARTICLE 12 SUBORDINATION OF Holdings GUARANTEE

     114   

Section 12.01.

   Agreement To Subordinate      114   

Section 12.02.

   Liquidation, Dissolution, Bankruptcy      114   

Section 12.03.

   Default on Holdings Senior Indebtedness      115   

Section 12.04.

   Demand for Payment      116   

Section 12.05.

   When Distribution Must Be Paid Over      116   

Section 12.06.

   Subrogation      116   

Section 12.07.

   Relative Rights      116   

Section 12.08.

   Subordination May Not Be Impaired by Holdings      117   

Section 12.09.

   Rights of Trustee and Paying Agent      117   

Section 12.10.

   Distribution or Notice to Holdings Representative      118   

Section 12.11.

   Article 12 Not To Prevent Events of Default or Limit Right To Demand Payment      118   

Section 12.12.

   Trust Moneys Not Subordinated      118   

 

-iii-


          Page  

Section 12.13.

   Trustee Entitled To Rely      118   

Section 12.14.

   Trustee To Effectuate Subordination      118   

Section 12.15.

   Trustee Not Fiduciary for Holders of Holdings Senior Indebtedness      119   

Section 12.16.

   Reliance by Holders of Holdings Senior Indebtedness on Subordination Provisions      119   

ARTICLE 13 SATISFACTION AND DISCHARGE

     119   

Section 13.01.

   Satisfaction and Discharge      119   

Section 13.02.

   Application of Trust Money      120   

ARTICLE 14 MISCELLANEOUS

     120   

Section 14.01.

   TIA Controls      120   

Section 14.02.

   Notices      120   

Section 14.03.

   Communication by Holders of Notes with Other Holders of Notes      122   

Section 14.04.

   Certificate and Opinion as to Conditions Precedent      122   

Section 14.05.

   Statements Required in Certificate or Opinion      122   

Section 14.06.

   Rules by Trustee and Agents      122   

Section 14.07.

   No Personal Liability of Directors, Officers, Employees and Stockholders      123   

Section 14.08.

   Governing Law      123   

Section 14.09.

   Waiver of Jury Trial      123   

Section 14.10.

   Force Majeure      123   

Section 14.11.

   No Adverse Interpretation of Other Agreements      123   

Section 14.12.

   Successors      123   

Section 14.13.

   Severability      123   

Section 14.14.

   Counterpart Originals      124   

Section 14.15.

   Table of Contents, Headings, etc.      124   

Section 14.16.

   Qualification of Indenture      124   

Section 14.17.

   Designated Senior Indebtedness      124   

 

Appendix A    Provisions Relating to Initial Notes, Additional Notes and Exchange Notes
Exhibit A    Form of Initial Note
Exhibit B    Form of Exchange Note
Exhibit C    Form of Transferee Letter of Representation
Exhibit D    Form of Supplemental Indenture to Be Delivered by Future Note Guarantors

 

-iv-


INDENTURE, dated as of January 5, 2011, among Realogy Corporation, a Delaware corporation (the “ Issuer ”), Domus Holdings Corp., a Delaware corporation and the indirect parent of the Issuer (“ Holdings ”), the Note Guarantors (as defined herein) listed on the signature pages hereto and The Bank of New York Mellon Trust Company, N.A., as Trustee.

W I T N E S S E T H

WHEREAS, in connection with the Existing Notes Exchange Offer (as defined herein), the Issuer has duly authorized the creation of and issue of $491,824,000 aggregate principal amount of 11.50% Senior Notes due 2017 (the “ Initial Notes ”); and

WHEREAS, the Issuer, Holdings and each of the Note Guarantors has duly authorized the execution and delivery of this Indenture.

NOW, THEREFORE, the Issuer, Holdings, the Note Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Notes.

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01.  Definitions .

Acquired Indebtedness ” means, with respect to any specified Person:

(1) Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging, consolidating or amalgamating with or into or becoming a Restricted Subsidiary of such specified Person, and

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

Additional Interest ” means all additional interest then owing pursuant to the Registration Rights Agreement.

Additional Notes ” means additional Notes (other than the Initial Notes and other than Exchange Notes for such Initial Notes) issued from time to time under this Indenture in accordance with Sections 2.01 and 4.09 hereof.

Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

Agent ” means any Registrar and Paying Agent.

Apple Ridge Documents ” means the Transfer and Servicing Agreement, dated as of April 25, 2000, as amended, by and among Apple Ridge Services Corporation, Cartus Corporation,

 


Cartus Financial Corporation, Apple Ridge Funding LLC and The Bank of New York Mellon (formerly known as The Bank of New York) (the “ Transfer and Servicing Agreement ”), the Receivables Purchase Agreement, dated as of April 25, 2000, as amended, by and between Cartus Financial Corporation and Apple Ridge Services Corporation (the “ Receivables Purchase Agreement ”), the Purchase Agreement, dated as of April 25, 2000, as amended, by and between Cartus Corporation and Cartus Financial Corporation (the “ Purchase Agreement ”), the Amended and Restated Note Purchase Agreement, dated as of April 10, 2007, as amended and restated as of July 6, 2007, by and among Apple Ridge Funding LLC, Cartus Corporation, Credit Agricole Corporate and Investment Bank, New York Branch (formerly known as Calyon New York Branch) and the Conduit Purchasers, Committed Purchasers and Managing Agents from time to time parties thereto, the Master Indenture, April 25, 2000, as amended, by and between Apple Ridge Funding LLC and The Bank of New York Mellon, the Amended and Restated Series 2007-1 Indenture Supplement, dated as of April 10, 2007, as amended and restated as of July 6, 2007, by and between Apple Ridge Funding LLC and The Bank of New York Mellon, the Performance Guaranty, dated as of May 12, 2006, as amended by the Fifth Omnibus Amendment dated as of April 10, 2007, by Realogy Corporation in favor of Apple Ridge Funding, LLC and Cartus Financial Corporation, and each other agreement or other document contemplated by or entered into in connection with and/or in replacement of the foregoing, each as amended, restated, refinanced, modified or supplemented on or prior to the Issue Date.

Applicable Insurance Regulatory Authority ” means, when used with respect to any Insurance Subsidiary, the insurance department or similar administrative authority or agency located in (x) the state or other jurisdiction in which such Insurance Subsidiary is domiciled or (y) to the extent asserting regulatory jurisdiction over such Insurance Subsidiary, the insurance department, authority or agency in each state or other jurisdiction in which such Insurance Subsidiary is licensed, and shall include any Federal insurance regulatory department, authority or agency that may be created in the future and that asserts regulatory jurisdiction over such Insurance Subsidiary.

Applicable Premium ” means, with respect to any Note on any applicable redemption date, the greater of:

(1) 1% of the then outstanding principal amount of the Note; and

(2) the excess of:

(a) the present value at such redemption date of (i) the redemption price of the Note, at April 15, 2013 (such redemption price being set forth in Section 3.07) plus (ii) all required interest payments due on the Note through April 15, 2013 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over

(b) the then outstanding principal amount of the Note.

Arbitrage Programs ” means Indebtedness and Investments relating to operational escrow accounts of NRT or Title Resource Group or any of their Restricted Subsidiaries.

Asset Sale ” means:

(1) the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of a Sale/Leaseback Transaction) of the Issuer or any Restricted Subsidiary (each referred to in this definition as a “disposition”) or

 

-8-


(2) the issuance or sale of Equity Interests (other than directors’ qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any Restricted Subsidiary (other than to the Issuer or another Restricted Subsidiary and other than the issuance of Preferred Stock of a Non-Guarantor Subsidiary issued in compliance with Section 4.09) (whether in a single transaction or a series of related transactions),

in each case other than:

(a) a disposition of Cash Equivalents or Investment Grade Securities or damaged, obsolete or worn out property or equipment in the ordinary course of business;

(b) the disposition of all or substantially all of the assets of the Issuer in a manner permitted pursuant to the provisions described under Section 5.01 hereof or any disposition that constitutes a Change of Control;

(c) any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 4.07;

(d) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary, which assets or Equity Interests so disposed or issued have an aggregate Fair Market Value of less than $25.0 million in any one transaction or series of related transactions;

(e) any disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary to the Issuer or by the Issuer or a Restricted Subsidiary to a Restricted Subsidiary;

(f) any exchange of assets (including a combination of assets and Cash Equivalents) for assets related to a Similar Business of comparable or greater market value or usefulness to the business of the Issuer and the Restricted Subsidiaries as a whole, as determined in good faith by the senior management or the Board of Directors of the Issuer;

(g) foreclosure on assets of the Issuer or any of the Restricted Subsidiaries;

(h) any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(i) the lease, assignment or sublease of any real or personal property in the ordinary course of business;

(j) any sale of inventory or other assets in the ordinary course of business;

(k) grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property or franchise rights;

(l) in the ordinary course of business, any swap of assets, or any lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing arrangements) of comparable or greater value or usefulness to the business of the Issuer and the Restricted Subsidiaries taken as a whole, as determined in good faith by senior management or the Board of Directors of the Issuer; provided , that any cash or Cash Equivalents received must be applied in accordance with Section 4.10;

 

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(m) any financing transaction with respect to property built or acquired by the Issuer or any Restricted Subsidiary after the Issue Date, including any Sale/Leaseback Transaction or asset securitization permitted by this Indenture;

(n) any surrender or waiver of contract rights or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;

(o) a sale or other transfer of Securitization Assets or interests therein pursuant to a Permitted Securitization Financing;

(p) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and not as part of a Permitted Securitization Financing;

(q) dispositions in connection with Permitted Liens or Liens to secure the Notes in accordance with the terms of this Indenture;

(r) sales or other dispositions of Equity Interests in Existing Joint Ventures; and

(s) any disposition of Investments in connection with the Arbitrage Programs.

Bank Indebtedness ” means any and all amounts payable under or in respect of the Credit Agreement and the other Credit Agreement Documents as amended, restated, supplemented, waived, replaced, restructured, repaid, refunded, refinanced or otherwise modified from time to time (including after termination of the Credit Agreement), including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Issuer whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof.

Bankruptcy Law ” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

beneficial ownership ” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as such term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire, whether such right is currently exercisable or is exercisable only after the passage of time.

Board of Directors ” means, as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.

Business Day ” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or the city in which the Trustee’s principal office is located.

Capital Stock ” means:

(1) in the case of a corporation or a company, corporate stock or shares;

 

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(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

Capitalized Lease Obligation ” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

Cash Equivalents ” means:

(1) U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business;

(2) securities issued or directly and fully guaranteed or insured by the U.S. government or any country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;

(3) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250.0 million and whose long-term debt is rated “A” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);

(4) repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5) commercial paper issued by a corporation (other than an Affiliate of the Issuer) rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency if both of the two named rating agencies cease publishing ratings of investments) and in each case maturing within one year after the date of acquisition;

(6) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency if both of the two named rating agencies cease publishing ratings of investments) in each case with maturities not exceeding two years from the date of acquisition;

(7) Indebtedness issued by Persons (other than the Permitted Holders or any of their Affiliates) with a rating of “A” or higher from S&P or “A-2” or higher from Moody’s (or

 

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reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;

(8) investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above; and

(9) instruments equivalent to those referred to in clauses (1) through (8) above denominated in euros or any other foreign currency comparable in credit quality and tenor to those referred to above and commonly used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business conducted by any Subsidiary organized in such jurisdiction.

Cendant ” means Cendant Corporation, a Delaware corporation (now known as Avis Budget Group, Inc.).

Cendant Contingent Assets ” has the meaning assigned to “Cendant Contingent Asset” in the Separation and Distribution Agreement and shall also include any tax benefits and attributes allocated or inuring to the Issuer and its Subsidiaries under the Cendant Tax Sharing Agreement.

Cendant Contingent Liabilities ” has the meaning assigned to “Assumed Cendant Contingent Liabilities” in the Separation and Distribution Agreement and shall also include any liabilities that are related or attributable to or arising in connection with Taxes or Tax Returns (as each term is defined in the Cendant Tax Sharing Agreement).

Cendant Spin-Off ” means the distribution of all of the capital stock of the Issuer by Cendant to its stockholders and the transactions related thereto as described in that certain Information Statement of the Issuer dated July 13, 2006, as filed with the SEC.

Cendant Tax Sharing Agreement ” means the Tax Sharing Agreement, dated as of July 28, 2006, by and among Cendant, the Issuer, Wyndham Worldwide Corporation and Travelport Inc., as amended on or prior to the date of the Offering Memorandum.

Change of Control ” means the occurrence of any of the following:

(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of the Issuer and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or

(2) the Issuer becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of the Issuer or any direct or indirect parent of the Issuer. Notwithstanding the foregoing, a Specified Merger/Transfer Transaction shall not constitute a Change of Control.

Code ” means the Internal Revenue Code of 1986, as amended.

 

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Consolidated Interest Expense ” means, with respect to any Person for any period, the sum, without duplication, of:

(1) consolidated interest expense of such Person and the Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount and bond premium, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations ( provided, however , that if interest rate Hedging Obligations result in net benefits rather than costs, such benefits shall be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such net benefits are otherwise reflected in Consolidated Net Income) and excluding additional interest in respect of the Notes, amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and expensing of any bridge commitment or other financing fees); plus

(2) consolidated capitalized interest of such Person and the Restricted Subsidiaries for such period, whether paid or accrued; plus

(3) commissions, discounts, yield and other fees and charges Incurred in connection with any Permitted Securitization Financing to the extent such amounts have not been deducted in the presentation of consolidated revenues of such Person; minus

(4) interest income for such period.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

Consolidated Leverage Ratio ” means, with respect to any Person at any date, the ratio of (i) the aggregate amount of all outstanding Indebtedness and Disqualified Stock of such Person and its Restricted Subsidiaries and Preferred Stock of Non-Guarantor Subsidiaries of such Person as of such date (determined on a consolidated basis in accordance with GAAP) less the amount of cash and Cash Equivalents (other than cash and Cash Equivalents of Special Purpose Securitization Subsidiaries) in excess of any Restricted Cash that would be stated on the balance sheet of such Person and its Restricted Subsidiaries as of such date of determination to (ii) EBITDA of such Person for the four full fiscal quarters for which internal financial statements are available immediately preceding such date. In the event that the Issuer or any of the Restricted Subsidiaries Incurs or redeems any Indebtedness or issues or redeems Disqualified Stock or any Non-Guarantor Subsidiary issues or redeems Preferred Stock subsequent to the commencement of the period for which the Consolidated Leverage Ratio is being calculated but on or prior to or simultaneously with the event for which the calculation of the Consolidated Leverage Ratio is made (the “Consolidated Leverage Calculation Date”), then the Consolidated Leverage Ratio shall be calculated giving pro forma effect to such Incurrence or such issuance or redemption of Disqualified Stock or Preferred Stock or redemption of Indebtedness, as if the same had occurred at the beginning of the applicable four-quarter period; provided that the Issuer may elect, pursuant to an Officer’s Certificate delivered to the Trustee, that all or any portion of the commitment under any Indebtedness as being Incurred at the time such commitment is entered into and any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time. Notwithstanding the foregoing and for purposes of this calculation, the aggregate principal amount of Indebtedness shall be calculated without giving effect to purchase accounting adjustments.

 

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For purposes of making the computation referred to above, Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to a company, operating unit, division, segment, business, group of assets or lines of business, that the Issuer or any of the Restricted Subsidiaries has made after the Issue Date and during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Consolidated Leverage Calculation Date (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation, in each case with respect to an operating unit, division, segment, business, group of assets or lines of business that would have required adjustment pursuant to this definition, then the Consolidated Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period.

For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer.

Consolidated Net Income ” means, with respect to any Person for any period, without duplication, the aggregate of the Net Income of such Person and the Restricted Subsidiaries for such period, on a consolidated basis; provided, however , that:

(1) any net after-tax extraordinary, nonrecurring or unusual gains or losses or income, expenses or charges (less all fees and expenses relating thereto), including, without limitation, (i) severance expenses, relocation or other restructuring expenses, fees, expenses or charges related to plant, facility, store and office closures, consolidations, downsizings and/or shutdowns (including future lease commitments and contract termination costs with respect thereto), (ii) fees, expenses or charges Incurred in connection with the Cendant Spin-Off, (iii) expenses or charges related to curtailments or modifications to pension or other post-employment benefit plans, (iv) any fees, expenses or charges related to any Equity Offering, Permitted Investment, acquisition (including integration costs) or Indebtedness permitted to be Incurred by this Indenture (in each case, whether or not successful), including any such fees, expenses, tender premiums, charges or change in control payments made under the Merger Documents or otherwise related to the Merger Transactions (including any transition-related expenses Incurred prior to, on or after the Original Issue Date) and (v) any fees, expenses or charges related to the Existing Notes Exchange Offers, in each case, shall be excluded;

(2) any increase in amortization or depreciation or any one-time non-cash charges or increases or reductions in Net Income, in each case resulting from purchase accounting in connection with the Merger Transactions or any acquisition that is consummated after the Original Issue Date shall be excluded (including any acquisition by a third party, directly or indirectly, of the Issuer);

(3) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;

 

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(4) any net after-tax income or loss from abandoned, closed or discontinued operations and any net after-tax gains or losses on disposal of abandoned, closed or discontinued operations shall be excluded;

(5) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by senior management or the Board of Directors of the Issuer) shall be excluded;

(6) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of Indebtedness, Hedging Obligations and other derivative instruments shall be excluded;

(7) except with respect to joint ventures related to Title Resource Group and the Issuer’s mortgage origination business (whether conducted through PHH Home Loans, LLC or other joint ventures of the Issuer or its Restricted Subsidiaries), the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;

(8) solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of Cumulative Credit, the Net Income for such period of any Restricted Subsidiary (other than any Note Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;

(9) an amount equal to the amount of Tax Distributions actually made to any parent of such Person in respect of such period in accordance with Section 4.07(b)(12) shall be included as though such amounts had been paid as income taxes directly by such Person for such period;

(10) any non-cash impairment charges or asset write-offs and amortization of intangibles in each case arising pursuant to the application of GAAP shall be excluded;

(11) any (a) severance or relocation costs or expenses, (b) one-time non-cash compensation charges, (c) costs and expenses related to employment of terminated employees, (d) costs or expenses realized in connection with, resulting from or in anticipation of the Merger Transactions or (e) non-cash costs or expenses realized in connection with or resulting from employee benefit plans or post-employment benefit plans (including long-term incentive plans), stock appreciation or similar rights, stock options or other rights of officers, directors and employees, in each case of such Person or any of the Restricted Subsidiaries, shall be excluded;

(12) accruals and reserves that are established or adjusted within 12 months of the Original Issue Date, in each case, related to or as a result of the Merger Transactions and that are

 

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so required to be established or adjusted in accordance with GAAP, and changes in accruals and reserves as a result of the adoption or modification of accounting policies in connection with the Merger Transactions, shall be excluded;

(13) (a)(i) the non-cash portion of “straight-line” rent expense shall be excluded and (ii) the cash portion of “straight-line” rent expense which exceeds the amount expensed in respect of such rent expense shall be included and (b) non-cash gains, losses, income and expenses resulting from fair value accounting required by Accounting Standards Codification 815 (or successor rule) shall be excluded;

(14) unrealized gains and losses relating to hedging transactions and mark-to-market of Indebtedness denominated in foreign currencies resulting from the applications of Accounting Standards Codification 830 (or successor rule) shall be excluded;

(15) any currency translation gains and losses related to currency reimbursements of Indebtedness, and any net loss or gain resulting from Hedging Obligations for currency exchange risk, shall be excluded;

(16) solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of Cumulative Credit, the difference, if positive, of the Consolidated Taxes of the Issuer calculated in accordance with GAAP and the actual Consolidated Taxes paid in cash by the Issuer during any Reference Period shall be included;

(17) any expenses or income (including increases or reversals of reserves) relating to the Cendant Contingent Liabilities shall be excluded; and

(18) any income or other economic benefits accruing to the Issuer and its Subsidiaries pursuant to the Cendant Contingent Assets, whether in the form of cash or tax benefits shall be excluded, provided any economic benefits accruing to the Issuer and its Restricted Subsidiaries pursuant to assets out of or arising from payments to be received under Article III of the Tax Receivable Agreement dated as of February 22, 2005 by and among Cendant Corporation, Cendant Mobility Services Corporation and Wright Express Corporation shall be included.

Notwithstanding the foregoing, for the purpose of Section 4.07 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries or a Restricted Subsidiary to the extent such dividends, repayments, advances or transfers increase the amount of Restricted Payments permitted under Section 4.07 pursuant to clauses (5) and (6) of the definition of Cumulative Credit.

Consolidated Non-cash Charges ” means, with respect to any Person for any period, the aggregate depreciation, amortization and other non-cash expenses, including any deferred financing fees, write-offs or write-downs and amortization of expenses attributable to pending real estate brokerage transactions and property listings of Persons or operations acquired by such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP (provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA to such extent paid, and excluding amortization of a prepaid cash item that was paid in a prior period).

Consolidated Taxes ” means, with respect to any Person for any period, the provision for taxes based on income, profits or capital, including, without limitation, state, franchise and similar taxes,

 

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of such Person for such period on a consolidated basis and any Tax Distributions taken into account in calculating Consolidated Net Income.

Contingent Obligations ” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:

(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor;

(2) to advance or supply funds:

(a) for the purchase or payment of any such primary obligation; or

(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

Convertible Notes ” means, collectively, the Issuer’s 11.00% Series A Convertible Notes due 2018, 11.00% Series B Convertible Notes due 2018 and 11.00% Series C Convertible Notes due 2018.

Convertible Note Guarantee ” means any guarantee of the obligations of the Issuer under the Convertible Notes and the Convertible Note Indenture by any Person in accordance with the provisions of the Convertible Note Indenture.

Convertible Note Indenture ” means the indenture, dated as of the Issue Date, among the Issuer, Holdings, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, governing the Convertible Notes, as amended, supplemented or modified from time to time.

Corporate Trust Office of the Trustee ” means the designated office of the Trustee at which at any time its corporate trust business shall be administered, which office at the dated hereof is located at 525 William Penn Place, 38th Floor, Pittsburgh, PA 15259, Attention: Corporate Trust Administration, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

Credit Agreement ” means, collectively, (i) the credit agreement dated as of April 10, 2007, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof, among the Issuer, Domus Intermediate Holdings Corp., a Delaware limited liability company and the parent of the Issuer, as guarantor, the other guarantors named therein, the financial institutions named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent, and (ii) whether or

 

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not the credit agreement referred to in clause (i) remains outstanding, if designated by the Issuer to be included in the definition of “Credit Agreement,” one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, Permitted Securitization Financings (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers, guarantors or issuers or lenders or group of lenders, and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

Credit Agreement Documents ” means the collective reference to the Credit Agreement, any notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time.

Cumulative Credit ” means the sum of (without duplication):

(1) 50% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period, the “Reference Period”) from April 1, 2007 to the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit); provided, however that, to the extent the Consolidated Leverage Ratio of the Issuer on a pro forma basis as if the Restricted Payment had been made and any Indebtedness Incurred on such date had been Incurred would have been less than 3.0 to 1.0 and the Consolidated Net Income of the Issuer is positive, then 75% of the Consolidated Net Income of the Issuer for the aforementioned period shall be included pursuant to this clause (1), plus

(2) 100% of the aggregate net proceeds, including cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash, received by the Issuer after the Original Issue Date (other than net proceeds to the extent such net proceeds have been used to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 4.09(b)(19)) from the issue or sale of Equity Interests of the Issuer (excluding, without duplication, (i) Refunding Capital Stock, Designated Preferred Stock, Excluded Contributions and Disqualified Stock and (ii) any net cash proceeds of Equity Offerings to the extent used to redeem Notes in compliance with Section 3.07), including Equity Interests issued upon conversion of Indebtedness or Disqualified Stock or upon exercise of warrants or options (other than an issuance or sale to a Restricted Subsidiary of the Issuer), plus

(3) 100% of the aggregate amount of contributions to the capital of the Issuer received in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash received after the Original Issue Date (other than Refunding Capital Stock, Designated Preferred Stock, Excluded Contributions, Disqualified Stock and contributions to the extent such contributions have been used to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 4.09(b)(19)), plus

(4) the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of the Issuer or any Restricted Subsidiary issued after the Original Issue Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged

 

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for Equity Interests in the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer (provided that such Indebtedness or Disqualified Stock is retired or extinguished), plus

(5) 100% of the aggregate amount received by the Issuer or any Restricted Subsidiary in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash received by the Issuer or any Restricted Subsidiary from:

(A) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of Restricted Investments made by the Issuer and the Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from the Issuer and the Restricted Subsidiaries by any Person (other than the Issuer or any of the Restricted Subsidiaries) and from repayments of loans or advances (including the release of any guarantee that constituted a Restricted Investment when made) that constituted Restricted Investments (other than, in each case, to the extent that the Restricted Investment was made pursuant to clause (7) or (10) of Section 4.07(b)),

(B) the sale (other than to the Issuer or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary (other than an Unrestricted Subsidiary to the extent the investments in such Unrestricted Subsidiary was made by the Issuer or a Restricted Subsidiary pursuant to clause (7) or (10) of Section 4.07(b) or to the extent such Investment constituted a Permitted Investment), or

(C) a distribution or dividend from an Unrestricted Subsidiary, plus

(6) in the event any Unrestricted Subsidiary has been re-designated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary, the Fair Market Value (as determined in accordance with the next succeeding sentence) of the Investment of the Issuer in such Unrestricted Subsidiary at the time of such re-designation, combination or transfer (or of the assets transferred or conveyed, as applicable), after taking into account any Indebtedness associated with the Unrestricted Subsidiary so designated or combined or any Indebtedness associated with the assets so transferred or conveyed (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to clause (7) or (10) of Section 4.07(b) or constituted a Permitted Investment).

The Fair Market Value of property, other than cash, covered by clauses (2), (3), (5) and (6) of this definition of “Cumulative Credit” shall be determined in good faith by the Issuer, and

(1) in the case of property with a Fair Market Value in excess of $30.0 million, shall be set forth in an Officer’s Certificate or

(2) in the case of property with a Fair Market Value in excess of $60.0 million, shall be set forth in a resolution approved by at least a majority of the Board of Directors of the Issuer.

Custodian ” means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.

Dealer Managers ” means J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC and Goldman, Sachs & Co.

 

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Default ” means any event which is, or after notice or passage of time or both would be, an Event of Default.

Definitive Note ” means a certificated Initial Note, Additional Note or Exchange Note (bearing the Restricted Notes Legend if the transfer of such Note is restricted by applicable law) that does not include the Global Notes Legend.

Delayed Draw Term Lender ” shall mean a lender under the Credit Agreement with a Delayed Draw Term Loan Commitment or an outstanding Delayed Draw Term Loan.

Delayed Draw Term Loan ” shall mean the term loan made by one or more Delayed Draw Term Lenders pursuant to the terms of the Credit Agreement if and only to the extent that (i) such term loan was permitted under the Existing Indentures as in effect immediately prior to the Issue Date as “Refinancing Indebtedness” (as defined therein) in respect of Secured Indebtedness of the Issuer and its Restricted Subsidiaries that was existing on the Original Issue Date, (ii) such refinanced Secured Indebtedness was permitted under the Existing Indentures on the Original Issue Date under clause 4.09(b)(3) of each of the Existing Indentures and was not outstanding under the Credit Agreement as of the Original Issue Date and (iii) the aggregate principal amount of all such Delayed Draw Term Loans does not exceed $1.2 billion.

Delayed Draw Term Loan Commitment ” shall mean, with respect to each Delayed Draw Term Lender, the commitment of such lender to make Delayed Draw Term Loans to the Issuer after the closing date of the Credit Agreement in accordance with the terms thereof.

Depositary ” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

Designated Non-cash Consideration ” means the Fair Market Value of non-cash consideration received by the Issuer or one of the Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate, setting forth the basis of such valuation, executed by the principal financial officer of the Issuer, less the amount of Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.

Designated Preferred Stock ” means Preferred Stock of the Issuer or any direct or indirect parent of the Issuer (in each case other than Disqualified Stock), that is issued for cash (other than to the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in the definition of “Cumulative Credit”.

Disqualified Stock ” means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable, putable or exchangeable), or upon the happening of any event:

(1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale; provided that the relevant asset sale or change of control provisions, taken as a whole, are no more favorable in any material respect to holders of such Capital Stock than the asset sale and change of control provisions applicable to the Notes and any purchase requirement triggered thereby may not become

 

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operative until compliance with the asset sale and change of control provisions applicable to the Notes (including the purchase of any Notes tendered pursuant thereto)),

(2) is convertible or exchangeable at the option of the holder thereof for Indebtedness or Disqualified Stock of such Person, or

(3) is redeemable at the option of the holder thereof, in whole or in part,

in each case prior to 91 days after the maturity date of the Notes; provided, however, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable at the option of the holder thereof or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided , further, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the Issuer or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Issuer in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; provided , further, that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

Domestic Subsidiary ” means a Restricted Subsidiary that is not a Foreign Subsidiary.

EBITDA ” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication, to the extent the same was deducted in calculating Consolidated Net Income:

(1) Consolidated Taxes; plus

(2) Consolidated Interest Expense; plus

(3) Consolidated Non-cash Charges; plus

(4) business optimization expenses and other restructuring charges, expenses or reserves (which, for the avoidance of doubt, shall include, without limitation, the effect of retention, systems establishment costs, curtailments or modifications to pension and post retirement employee benefit plans that result in pension settlement charges); provided that with respect to each business optimization expense or other restructuring charge or reserve, the Issuer shall have delivered to the Trustee an Officer’s Certificate specifying and quantifying such expense, charge or reserve and stating that such expense, charge or reserve is a business optimization expense or other restructuring charge or reserve, as the case may be; plus

(5) the amount of management, monitoring, consulting, transaction and advisory fees and related expenses paid to the Sponsors (or any accruals relating to such fees and related expenses) during such period pursuant to the terms of the agreements between the Sponsors and the Issuer and its Subsidiaries as in effect on the Original Issue Date; provided that such amount shall not exceed the amount permitted to be paid to the Sponsors pursuant to Section 4.11(b)(3); plus

(6) all add backs reflected in the financial presentation of “Adjusted EBITDA” in the amounts set forth in and as further described in the Offering Memorandum, but only to the extent such add backs occurred in the consecutive four quarter period used in the calculations of Fixed Charge Coverage Ratio, Consolidated Leverage Ratio and Secured Indebtedness Leverage Ratio, as the case may be; plus

 

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(7) the amount of net cost savings projected by the Issuer in good faith to be realized as a result of specified actions taken or to be taken (calculated on a pro forma basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that (w) such cost savings are reasonably identifiable and factually supportable, (x) such actions have been taken or are to be taken and must be expected to be achieved on a run-rate basis within 90 days after the date of determination to take such action, (y) no cost savings shall be added pursuant to this clause (7) to the extent duplicative of any expenses or charges relating to such cost savings that are included in the calculations of Consolidated Net Income or EBITDA with respect to such period and (z) the aggregate amount of cost savings added pursuant to this clause (7) shall not exceed $75.0 million for any four consecutive quarter period (which adjustments may be incremental to pro forma adjustments made pursuant to the second paragraph of the definitions of “Fixed Charge Coverage Ratio”, “Consolidated Leverage Ratio” or “Secured Indebtedness Leverage Ratio”, as applicable); plus

(8) the amount of loss on any sale of Securitization Assets to a Special Purpose Securitization Subsidiary in connection with any Permitted Securitization Financing that is not shown as a liability on a consolidated balance sheet prepared in accordance with GAAP; plus

(9) storefront conversion costs relating to acquired stores by the Issuer or any Restricted Subsidiary; plus

(10) any costs or expenses incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or stockholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of the Issuer or a Note Guarantor solely to the extent that such net cash proceeds are excluded from the calculation of the Cumulative Credit;

less , without duplication,

(11) non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items for which cash was received in a prior period); less

(12) all deductions reflected in the financial presentation of “Adjusted EBITDA” in the amounts set forth in and as further described in the Offering Memorandum, but only to the extent such deductions occurred in the consecutive four quarter period used in the calculations of Fixed Charge Coverage Ratio, Consolidated Leverage Ratio and Secured Indebtedness Leverage Ratio, as the case may be.

Equity Interests ” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

Equity Offering ” means any public or private sale after the Issue Date of common stock or Preferred Stock of the Issuer or any direct or indirect parent of the Issuer, as applicable (other than Disqualified Stock), other than:

(1) public offerings with respect to the Issuer’s or such direct or indirect parent’s common stock registered on Form S-4 or Form S-8;

 

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(2) issuances to any Subsidiary of the Issuer; and

(3) any such public or private sale that constitutes an Excluded Contribution.

Event of Default ” has the meaning set forth under Section 6.01 hereof.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

Exchange Notes ” means the Notes issued in exchange for the Notes pursuant to the Registration Rights Agreement or similar agreement.

Exchange Offer ” has the meaning set forth in the Registration Rights Agreement.

Exchange Offer Registration Statement ” has the meaning set forth in the Registration Rights Agreement.

Excluded Contributions ” means the Cash Equivalents or other assets (valued at their Fair Market Value as determined in good faith by senior management or the Board of Directors of the Issuer) received by the Issuer after the Issue Date from:

(1) contributions to its common Capital Stock, and

(2) the sale (other than to a Subsidiary of the Issuer or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Issuer or any Subsidiary, to the extent such sale to such equity, stock option or other plan is financed by loans from or guaranteed by, the Issuer or any Restricted Subsidiary) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Issuer,

in each case designated as Excluded Contributions pursuant to an Officer’s Certificate executed by an Officer of the Issuer on or promptly after the date such capital contributions are made or the date such Capital Stock is sold, as the case may be, which are excluded from the calculation set forth in the definition of the term “Cumulative Credit”.

Existing Indentures ” means, collectively, the Existing Senior Note Indentures and the Existing Senior Subordinated Note Indenture.

Existing Joint Ventures ” means joint ventures in existence on the Issue Date.

Existing Note Guarantee ” means an Existing Senior Note Guarantee or an Existing Senior Subordinated Note Guarantee.

Existing Notes ” means the aggregate principal amount of the Existing Senior Cash Notes, Existing Senior Toggle Notes and Existing Senior Subordinated Notes in existence on the Issue Date (after giving effect to the Existing Notes Exchange Offers) less the aggregate principal amount of Existing Senior Notes and Existing Senior Subordinated Notes that are thereafter repurchased, redeemed, discharged or otherwise repaid.

Existing Notes Exchange Offers ” means the transactions contemplated by the Offering Memorandum, including those described therein under the caption “Certain Relationships and Related Transactions”.

 

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Existing Notes Offering Memorandum ” means the offering memorandum, dated April 5, 2007, relating to the sale of the Existing Notes.

Existing Securitization Documents ” means the Apple Ridge Documents and the U.K. Documents.

Existing Securitization Financings ” means the financing programs pursuant to the Apple Ridge Documents and the U.K. Documents, each as amended, restated, refinanced, modified or supplemented on or prior to the Issue Date.

Existing Senior Cash Notes ” means the 10.50% Senior Notes due 2014, issued by the Issuer pursuant to the Existing Senior Cash Note Indenture.

Existing Senior Cash Note Indenture ” means the Indenture dated as of April 10, 2007 among the Issuer, the guarantors named therein and The Bank of New York Mellon, as successor Trustee, governing the Existing Senior Cash Notes, as amended, supplemented or modified from time to time.

Existing Senior Note Guarantee ” means any guarantee of the obligations of the Issuer under the Existing Senior Notes and the Existing Senior Note Indentures by any Restricted Subsidiary in accordance with the provisions of the Existing Senior Note Indentures.

Existing Senior Notes ” means the Existing Senior Cash Notes and the Existing Senior Toggle Notes.

Existing Senior Note Indentures ” means, collectively, the Existing Senior Cash Note Indenture and the Existing Senior Toggle Note Indenture.

Existing Senior Subordinated Notes ” means the 12.375% Senior Subordinated Notes due 2015, issued by the Issuer pursuant to the Existing Senior Subordinated Note Indenture.

Existing Senior Subordinated Note Guarantee ” means any guarantee of the obligations of the Issuer under the Existing Senior Subordinated Notes and the Existing Senior Subordinated Note Indenture by any Restricted Subsidiary in accordance with the provisions of the Existing Senior Subordinated Note Indenture.

Existing Senior Subordinated Note Indenture ” means the Indenture dated as of April 10, 2007 among the Issuer, the guarantors named therein and The Bank of New York Mellon, as successor Trustee, governing the Existing Senior Subordinated Notes, as amended, supplemented or modified from time to time.

Existing Senior Toggle Notes ” means the 11.00%/11.75% Senior Toggle Notes due 2014, issued by the Issuer pursuant to the Existing Senior Toggle Note Indenture.

Existing Senior Toggle Note Indenture ” means the Indenture dated as of April 10, 2007 among the Issuer, the guarantors named therein and The Bank of New York Mellon, as successor Trustee, governing the Existing Senior Toggle Notes, as amended, supplemented or modified from time to time.

Extended Maturity Note Indentures ” means, collectively, the Indentures governing the Extended Maturity Notes.

Extended Maturity Notes ” means, collectively, the Notes, the New 12.00% Senior Notes and the New Senior Subordinated Notes.

 

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Extended Maturity Notes Guarantees ” means any guarantee of the obligations of the Issuer under the Extended Maturity Notes and the Extended Maturity Note Indentures by any Person in accordance with the provisions of the Extended Maturity Note Indentures.

Fair Market Value ” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.

Fixed Charge Coverage Ratio ” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Issuer or any of the Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other than in the case of revolving credit borrowings in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but on or prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.

For purposes of making the computation referred to above, Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to a company, operating unit, division, segment, business, group of assets or lines of business, that the Issuer or any of the Restricted Subsidiaries has made after the Issue Date and during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation, in each case with respect to an operating unit, division, segment, business, group of assets or lines of business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period. For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting Officer of the Issuer.

If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of twelve months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable

 

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period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate.

Fixed Charges ” means, with respect to any Person for any period, the sum, without duplication, of:

(1) Consolidated Interest Expense of such Person for such period, and

(2) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and the Restricted Subsidiaries.

Foreign Subsidiary ” means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state or territory thereof or the District of Columbia and any Restricted Subsidiary of such Foreign Subsidiary.

GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date. For the purposes of this Indenture, the term “consolidated” with respect to any Person shall mean such Person consolidated with the Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as an Investment.

Global Notes Legend ” means the legend set forth under that caption in Exhibit A to this Indenture.

Government Obligations ” means securities that are:

(1) direct obligations of the United States of America, for the timely payment of which its full faith and credit is pledged, or

(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such Government Obligations or a specific payment of principal of or interest on any such Government Obligations held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Obligations or the specific payment of principal of or interest on the Government Obligations evidenced by such depository receipt.

guarantee ” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

 

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Hedging Obligations ” means, with respect to any Person, the obligations of such Person under:

(1) currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and

(2) other similar agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

Holder ” means the Person in whose name a Note is registered on the Registrar’s books.

Holdings ” means the party named as such in the preamble to this Indenture and its successors.

Holdings Guarantee ” means the guarantee of the obligations of the Issuer under this Indenture and the Notes by Holdings in accordance with the provisions of this Indenture.

Holdings Pari Passu Indebtedness ” means with respect to Holdings, (i) the guarantee by Holdings of the obligations of the Issuer under the New 12.00% Senior Notes Indenture in accordance with the provisions of the New 12.00% Senior Notes Indenture, (ii) the guarantee by Holdings of the obligations of the Issuer under the Existing Senior Note Indentures and (iii) any Indebtedness that is not Holdings Senior Indebtedness or Holdings Subordinated Indebtedness.

Holdings Representative ” means the trustee, agent or representative (if any) for an issue of Holdings Senior Indebtedness; provided that if, and for so long as, such Holdings Senior Indebtedness lacks such a Holdings Representative, then the Holdings Representative for such Holdings Senior Indebtedness shall at all times constitute the holder or holders of a majority in outstanding principal amount of obligations under such Holdings Senior Indebtedness.

Holdings Senior Indebtedness ” means with respect to Holdings means any future Indebtedness of Holdings that is designated by Holdings as Holdings Senior Indebtedness.

Holdings Subordinated Indebtedness ” means with respect to Holdings, (i) any guarantee by Holdings of the obligations of the Issuer under the New Senior Subordinated Notes Indenture and the Existing Senior Subordinated Note Indenture, (ii) any guarantee by Holdings of the obligations of the Issuer under the Convertible Note Indenture and (iii) any Indebtedness of Holdings, guarantee of Holdings or obligation of Holdings that specifically provides that such Indebtedness of Holdings, guarantee of Holdings or obligation of Holdings is to rank junior in right of payment to the Holdings Guarantee.

Incur ” means issue, assume, guarantee, incur or otherwise become liable for; provided , however , that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.

Indebtedness ” means, with respect to any Person:

(1) the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase

 

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price of any property (except (i) any such balance that constitutes a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP), (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

(2) to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and

(3) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however , that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person;

provided, however , that notwithstanding the foregoing, Indebtedness shall be deemed to exclude (1) Contingent Obligations incurred in the ordinary course of business and the Cendant Contingent Liabilities (including the Contingent Obligations described in note 13 to the Issuer’s consolidated financial statements for the year ended December 31, 2009, incorporated by reference in the Offering Memorandum) (not in respect of borrowed money); (2) deferred or prepaid revenues or marketing fees; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) obligations under or in respect of a Permitted Securitization Financing (but including the excess, if any, of the amount of the obligations thereunder or in respect thereof over the aggregate receivables balances securing or otherwise supporting such obligations but only to the extent that the Issuer or any Subsidiary of the Issuer other than a Special Purpose Securitization Subsidiary is directly or indirectly liable for such excess); (5) obligations under or in respect of Arbitrage Programs except in connection with the calculation of the Consolidated Leverage Ratio and the Secured Indebtedness Leverage Ratio; (6) obligations to make payments in respect of funds held under escrow arrangements in the ordinary course of business; (7) obligations to make payments to third party insurance underwriters in respect of premiums collected by the Issuer and the Restricted Subsidiaries in the ordinary course of business; or (8) obligations under the Merger Documents.

Notwithstanding anything in this Indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Accounting Standards Codification 815 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture.

Indenture ” means this Indenture, as amended or supplemented from time to time.

Independent Financial Advisor ” means an accounting, appraisal, investment banking firm or consultant in each case of nationally recognized standing, that is, in the good faith determination of the Issuer, qualified to perform the task for which it has been engaged.

Initial Notes ” has the meaning set forth in the recitals hereto.

 

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Insurance Business ” means one or more aspects of the business of soliciting, administering, selling, issuing or underwriting insurance or reinsurance.

Insurance Subsidiary ” means any Subsidiary that is licensed by any Applicable Insurance Regulatory Authority to conduct, and conducts, an Insurance Business.

Interest Payment Date ” means April 15 and October 15 of each year to Stated Maturity.

Investment Grade Rating ” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

Investment Grade Securities ” means:

(1) securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents);

(2) securities that have a rating equal to or higher than Baa3 (or equivalent) by Moody’s or BBB- (or equivalent) by S&P, or an equivalent rating by any other Rating Agency, but excluding any debt securities or loans or advances between and among the Issuer and its Subsidiaries;

(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution; and

(4) corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.

Investments ” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit, security deposits and advances to customers or suppliers, advances or loans to franchisees in the ordinary course of business (whether evidenced by a note or otherwise) and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of the Issuer in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section 4.07:

(1) “Investments” shall include the portion (proportionate to the Issuer’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of the Issuer at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a re-designation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to:

(a) the Issuer’s “Investment” in such Subsidiary at the time of such re-designation, less

 

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(b) the portion (proportionate to the Issuer’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and

(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by the senior management or the Board of Directors of the Issuer.

Issue Date ” means January 5, 2011, the date on which the Notes are originally issued.

Issuer ” means the party named as such in the preamble to this Indenture and its successors and not any of its Subsidiaries.

Issuer Order ” means a written request or order signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of such Issuer, and delivered to the Trustee.

Lien ” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest, preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement), any lease in the nature thereof, any agreement to give a mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest or encumbrance of any kind and, except in connection with any Permitted Securitization Financing, any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction (other than a filing for informational purposes); provided that in no event shall an operating lease or an option or an agreement to sell be deemed to constitute a Lien.

Management Fee Agreement ” means the Management Fee Agreement, dated as of April 10, 2007, by and among the Issuer, Apollo Management VI, L.P. and Apollo Alternative Assets, L.P., as in existence on the Original Issue Date.

Management Group ” means the group consisting of the directors, executive officers and other management personnel of the Issuer or any direct or indirect parent of the Issuer, as the case may be, on the Issue Date.

Merger ” means the acquisition by Affiliates of the Sponsors of the Issuer pursuant to the Merger Documents.

Merger Documents ” means the Agreement and Plan of Merger by and among Holdings, Domus Acquisition Corp. and the Issuer, dated as of December 15, 2006, and any other document entered into in connection therewith, in each case as amended, supplemented or modified from time to time on or prior to the Original Issue Date.

Merger Transactions ” means the Merger and the transactions contemplated by the Merger Documents, the offerings of the Existing Notes, and borrowings made pursuant to the Credit Agreement on the Original Issue Date and the refinancing of the then Existing Securitization Financings (which may have occurred prior to the Original Issue Date) and, in each case, the application of the proceeds therefrom.

Moody’s ” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

 

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Net Income ” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

Net Proceeds ” means the aggregate cash proceeds received by the Issuer or any of the Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements related thereto), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to clause (1) of Section 4.10(b)) to be paid as a result of such transaction, and any deduction of appropriate amounts to be provided by the Issuer as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Issuer after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction and any distributions and payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Sale.

New Notes ” means, collectively, the Extended Maturity Notes and the Convertible Notes issued on the Issue Date.

New Senior Subordinated Notes ” means the Issuer’s 13.375% Senior Subordinated Notes due 2018 issued pursuant to the New Subordinated Notes Indenture.

New Senior Subordinated Notes Indenture ” means the Indenture governing the New Senior Subordinated Notes.

New 12.00% Senior Notes ” means the Issuer’s 12.00% Senior Notes due 2017 issued pursuant to the New 12.00% Senior Notes Indenture.

New 12.00% Senior Note Indenture ” means the indenture governing the New 12.00% Senior Notes.

Non-Guarantor Subsidiary ” means a Restricted Subsidiary that is not a Note Guarantor.

Note Guarantee ” means any guarantee of the obligations of the Issuer under this Indenture and the Notes by any Note Guarantor in accordance with the provisions of this Indenture.

Note Guarantor ” means any Restricted Subsidiary that Incurs a Note Guarantee and its successors; provided that upon the release or discharge of such Person from its Note Guarantee in accordance with this Indenture, such Person ceases to be a Note Guarantor.

Notes ” means the Initial Notes and more particularly means any Note authenticated and delivered under this Indenture. For all purposes of this Indenture, the term “Notes” shall also include Exchange Notes and any Additional Notes that may be issued under a supplemental indenture. The Initial Notes issued on the Issue Date, Additional Notes and Exchange Notes shall be treated as a single class for all purposes under this Indenture.

 

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NRT ” means NRT Incorporated, a Delaware corporation, and any successors thereto.

Obligations ” means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness; provided that Obligations with respect to the Notes shall not include fees or indemnifications in favor of the Trustee and other third parties other than the Holders of the Notes.

Offering Memorandum ” means the offering memorandum, dated November 30, 2010, relating to the exchange of the Existing Notes for the New Notes, as supplemented by Supplement No. 1 dated December 6, 2010, Supplement No. 2 dated December 10, 2010, Supplement No. 3 dated December 13, 2010 and Supplement No. 4 dated December 15, 2010.

Officer ” means the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Issuer. “Officer” of any Note Guarantor or Holdings has a correlative meaning.

Officer’s Certificate ” means a certificate signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer that meets the requirements set forth in this Indenture. “Officer’s Certificate” of Holdings or any Note Guarantor has a correlative meaning.

OID Legend ” means the legend set forth in Section 2.3(e)(i) of Appendix A to this Indenture.

Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer, Holdings, a Note Guarantor or the Trustee.

Original Issue Date ” means April 10, 2007.

Permitted Holders ” means, at any time, each of the Sponsors and members of the Management Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

Permitted Investments ” means:

(1) any Investment in the Issuer or any Restricted Subsidiary;

(2) any Investment in Cash Equivalents or Investment Grade Securities;

(3) any Investment by the Issuer or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary;

 

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(4) any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of Section 4.10 or any other disposition of assets not constituting an Asset Sale;

(5) any Investment existing on, or made pursuant to binding commitments existing on, the Original Issue Date; provided , that the amount of any such Investment may only be increased as required by the terms of such Investment as in existence on the Original Issue Date;

(6) advances after the Original Issue Date to directors, officers or employees not in excess of $50.0 million outstanding at any one time;

(7) any Investment acquired by the Issuer or any of the Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Issuer or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable; (b) as a result of a foreclosure by the Issuer or any of the Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default; or (c) as a result of the settlement, compromise or resolution of litigation, arbitration or other disputes with Persons who are not Affiliates;

(8) Hedging Obligations permitted under clause (10) of Section 4.09(b);

(9) any Investment by the Issuer or any of the Restricted Subsidiaries in a Similar Business having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (9) after the Original Issue Date that are at that time outstanding (after giving effect to the sale or other transfer of an Unrestricted Subsidiary to the extent the proceeds of such sale received by the Issuer and its Restricted Subsidiaries consists of cash and Cash Equivalents), not to exceed the greater of (x) $325.0 million and (y) 2.75% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however , that if any Investment pursuant to this clause (9) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be a Restricted Subsidiary;

(10) additional Investments by the Issuer or any of the Restricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (10) after the Original Issue Date that are at that time outstanding (after giving effect to the sale or other transfer of an Unrestricted Subsidiary to the extent the proceeds of such sale received by the Issuer and its Restricted Subsidiaries consists of cash and Cash Equivalents), not to exceed the greater of (x) $400.0 million and (y) 3.25% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(11) loans and advances to officers, directors and employees for business-related travel expenses, moving expenses and other similar expenses, in each case Incurred in the ordinary course of business;

(12) Investments the payment for which consists of Equity Interests of the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer, as applicable;

 

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provided, however , that such Equity Interests will not increase the amount available for Restricted Payments under clauses (2) and (3) of the definition of Cumulative Credit;

(13) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 4.11(b) (except transactions described in clauses (2), (6), (7), (17) and (18) of such Section);

(14) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

(15) guarantees issued in accordance with Section 4.09 and Section 4.15;

(16) Investments consisting of purchases and acquisitions of inventory, supplies, materials, services and equipment or purchases of contract rights or licenses or leases of intellectual property, in each case in the ordinary course of business;

(17) Investments arising as a result of Permitted Securitization Financings;

(18) additional Investments after the Original Issue Date in joint ventures of the Issuer or any of the Restricted Subsidiaries not to exceed the greater of $100.0 million at any one time outstanding and 0.75% of Total Assets at the time of Incurrence (plus an amount (without duplication of amounts reflected in Consolidated Net Income) equal to any return of capital actually received in respect of Investments theretofore made pursuant to this clause (18) in the aggregate, as valued at the Fair Market Value of such Investment at the time such Investment is made); provided, however, that if any Investment pursuant to this clause (18) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (18) for so long as such Person continues to be a Restricted Subsidiary;

(19) Investments of a Restricted Subsidiary of the Issuer acquired after the Original Issue Date or of an entity merged into, amalgamated with, or consolidated with the Issuer or a Restricted Subsidiary in a transaction that is not prohibited by Section 5.01 after the Original Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;

(20) any Investments in connection with the Arbitrage Programs;

(21) Investments in connection with the defeasance or discharge of the Existing Notes or the New Notes (which Investments would otherwise constitute Permitted Investments);

(22) advances or loans to relocating employees of a customer in the relocation services business of the Issuer and its Restricted Subsidiaries made in the ordinary course of business; and

(23) guarantees by the Issuer or any of its Restricted Subsidiaries of operating leases (other than Capitalized Lease Obligations), trademarks, licenses, purchase agreements or of other obligations that do not constitute Indebtedness, in each case entered into by the Issuer or any Restricted Subsidiary in the ordinary course of business.

 

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All Permitted Investments outstanding on the Issue Date and made on or after the after the Original Issue Date that were permitted under the Existing Indentures prior to the Issue Date pursuant to a clause corresponding to any of clauses (6), (9), (10) or (18) above shall be deemed to have been made on the Issue Date pursuant to the corresponding clause above in an amount equal to the amount of such Permitted Investment when actually made.

Permitted Lien ” means, with respect to any Person:

(1) pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory or regulatory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

(2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(3) Liens for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(4) Liens in favor of issuers of performance and surety bonds or bid bonds or similar liabilities or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

(5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties incurred in the ordinary course of business and title defects or irregularities that are of a minor nature and which do not in the aggregate interfere in any material respect with the ordinary course of business of such Person;

(6) (A) Liens on assets of a Restricted Subsidiary that is not a Note Guarantor securing Indebtedness of such Restricted Subsidiary permitted to be Incurred pursuant to Section 4.09 (provided that such Lien does not extend to the property or assets of the Issuer or any Subsidiary of the Issuer other than a Restricted Subsidiary that is not a Note Guarantor), (B) Liens securing an aggregate principal amount of Senior Pari Passu Indebtedness not to exceed the aggregate amount of Senior Pari Passu Indebtedness permitted to be Incurred pursuant to clauses (1) and (24) of Section 4.09(b) and (C) Liens securing Indebtedness permitted to be Incurred pursuant to clause (4) (provided that such Liens do not extend to any property or assets that are not property being purchased, leased, constructed or improved with the proceeds of such Indebtedness being Incurred pursuant to clause (4)), (12), (20) (provided that such Lien does not

 

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extend to the property or assets of any Subsidiary of the Issuer other than a Foreign Subsidiary) or (21) of Section 4.09(b);

(7) Liens existing on the Issue Date (other than with respect to Obligations in respect of the Credit Agreement, but including with respect to Obligations in respect of the Delayed Draw Term Loans);

(8) Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided , further, however, that such Liens may not extend to any other property owned by the Issuer or any Restricted Subsidiary;

(9) Liens on assets or property at the time the Issuer or a Restricted Subsidiary acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into the Issuer or any Restricted Subsidiary; provided, however , that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided , further, however, that the Liens may not extend to any other property owned by the Issuer or any Restricted Subsidiary;

(10) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary permitted to be Incurred in accordance with Section 4.09;

(11) Liens securing Hedging Obligations not incurred in violation of this Indenture; provided that with respect to Hedging Obligations relating to Indebtedness, such Lien extends only to the property securing such Indebtedness;

(12) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(13) leases and subleases of real property granted to others in the normal course of business which do not materially interfere with the ordinary conduct of the business of the Issuer or any of the Restricted Subsidiaries;

(14) Liens arising from precautionary Uniform Commercial Code financing statements or consignments entered into in connection with any transaction otherwise permitted under this Indenture;

(15) Liens in favor of the Issuer or any Note Guarantor;

(16) Liens in respect of Permitted Securitization Financings on all or a portion of the assets of Special Purpose Securitization Subsidiaries (including without limitation, pursuant to UCC filings covering sales of accounts, chattel paper, payment intangibles, promissory notes with respect to Permitted Securitization Financings and beneficial interests therein);

(17) deposits made in the ordinary course of business to secure liability to insurance carriers;

 

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(18) Liens on the Equity Interests of Unrestricted Subsidiaries;

(19) grants of software and other technology licenses in the ordinary course of business;

(20) [Reserved];

(21) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6)(B), (7), (8), (9), (15) and (20); provided, however , that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property) and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6)(B), (7), (8), (9), (15) and (20) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

(22) Liens on equipment of the Issuer or any Restricted Subsidiary granted in the ordinary course of business to the Issuer’s or such Restricted Subsidiary’s client at which such equipment is located;

(23) judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

(24) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

(25) Liens incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business;

(26) liens arising by virtue of any statutory or common law provisions relating to banker’s liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution or as to purchase orders and other agreements entered into with customers in the ordinary course of business;

(27) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

(28) [Reserved];

(29) Liens securing the Arbitrage Programs and related segregated deposit and securities accounts;

(30) Liens on any property or assets of the Issuer or any Restricted Subsidiary securing Indebtedness permitted by clause (27) of Section 4.09; provided , that such Lien (i) does not apply to any other property or asset of the Issuer or any Restricted Subsidiary not securing such Indebtedness at the date of the acquisition of such property or asset and (ii) is not created in contemplation of or in connection with such acquisition;

 

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(31) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(32) Liens solely on any cash earnest money deposits made by the Issuer or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement in respect of any Investment permitted hereunder;

(33) Liens on securities that are the subject of repurchase agreements constituting Cash Equivalents;

(34) Liens securing insurance premiums financing arrangements; provided , that such Liens are limited to the applicable unearned insurance premiums;

(35) other Liens securing obligations not to exceed $75.0 million at any one time outstanding; and

(36) Liens on proceeds from Cendant Contingent Assets received by the Issuer and held in trust (or otherwise segregated or pledged) for the benefit of the other parties to the Separation and Distribution Agreement (other than Travelport Inc.) to secure the Issuer’s obligations under Section 7.9 thereof.

Permitted Securitization Documents ” means all documents and agreements evidencing, relating to or otherwise governing a Permitted Securitization Financing.

Permitted Securitization Financing ” means one or more transactions pursuant to which Securitization Assets are sold, conveyed or otherwise transferred to (x) a Special Purpose Securitization Subsidiary (in the case of the Issuer or a Restricted Subsidiary of the Issuer) or (y) any other Person (in the case of a transfer by a Special Purpose Securitization Subsidiary), or Liens are granted in Securitization Assets (whether existing on the Issue Date or arising in the future); provided , that (1) recourse to the Issuer or any Restricted Subsidiary (other than the Special Purpose Securitization Subsidiaries) in connection with such transactions shall be limited to Standard Securitization Undertakings; (2) no property or assets of the Issuer or any other Restricted Subsidiary of the Issuer (other than a Special Purpose Securitization Subsidiary) shall be subject to such Permitted Securitization Financing other than pursuant to Standard Securitization Undertakings; (3) any material contract, agreement, arrangement or understanding with the Issuer or any Restricted Subsidiary of the Issuer included in the Permitted Securitization Documents with respect to such Permitted Securitization Financing shall be on terms which the Issuer reasonably believes to be not materially less favorable to the Issuer or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Issuer; and (4) with respect to any Permitted Securitization Financing entered into after the Issue Date, the Board of Directors of the Issuer shall have determined in good faith that such Permitted Securitization Financing (including financing terms, advance rates, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to the Issuer and the Special Purpose Securitization Subsidiaries involved in such Permitted Securitization Financing. For the avoidance of doubt, the Existing Securitization Financings as in effect on the Issue Date shall be Permitted Securitization Financings.

Person ” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

 

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Preferred Stock ” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.

Qualified CFC Holding Company ” shall mean a Wholly Owned Subsidiary of the Issuer that is a Delaware limited liability company that is treated as a disregarded entity for U.S. federal income tax purposes, the primary asset of which consists of Equity Interests in either (i) one or more Foreign Subsidiaries or (ii) a Delaware limited liability company the primary asset of which consists of Equity Interests in one or more Foreign Subsidiaries.

Rating Agency ” means (1) each of Moody’s and S&P and (2) if Moody’s or S&P ceases to rate the Notes for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(f) under the Exchange Act selected by the Issuer or any direct or indirect parent of the Issuer as a replacement agency for Moody’s or S&P, as the case may be.

Record Date ” for the interest or Additional Interest, if any, payable on any applicable Interest Payment Date means April 1 or October 1 (whether or not a Business Day) next preceding such Interest Payment Date.

Registration Rights Agreement ” means the Registration Rights Agreement in respect of the Notes, dated as of the Issue Date, among the Dealer Managers, the Issuer, Holdings and the Note Guarantors.

Restricted Cash ” means cash and Cash Equivalents held by Restricted Subsidiaries that is contractually restricted from being distributed to the Issuer or not available for general corporate purposes, except for such restrictions that are contained in agreements governing Indebtedness permitted under this Indenture and that is secured by such cash or Cash Equivalents.

Restricted Investment ” means an Investment other than a Permitted Investment.

Restricted Notes Legend ” means the legend set forth in Section 2.3(e)(i) of Appendix A to this Indenture.

Restricted Subsidiary ” means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person; provided that upon an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of “Restricted Subsidiary” (provided it continues to be a Subsidiary of such Person). Unless otherwise indicated in this Indenture, all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of the Issuer.

S&P ” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., or any successor to the rating agency business thereof.

Sale/Leaseback Transaction ” means an arrangement relating to property now owned or hereafter acquired by the Issuer or a Restricted Subsidiary whereby the Issuer or a Restricted Subsidiary transfers such property to a Person and the Issuer or such Restricted Subsidiary leases it from such Person, other than leases between the Issuer and a Restricted Subsidiary or between Restricted Subsidiaries.

SEC ” means the Securities and Exchange Commission.

Secured Indebtedness ” means any Indebtedness secured by a Lien.

 

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Secured Indebtedness Leverage Ratio ” means, with respect to any Person at any date, the ratio of (i) Secured Indebtedness and Disqualified Stock of such Person and its Restricted Subsidiaries and Preferred Stock of Non-Guarantor Subsidiaries as of such date (determined on a consolidated basis in accordance with GAAP) less the amount of cash and Cash Equivalents in excess of any Restricted Cash that would be stated on the balance sheet of such Person and its Restricted Subsidiaries (other than Special Purpose Securitization Subsidiaries) and held by such Person and its Restricted Subsidiaries (other than Special Purpose Securitization Subsidiaries) as of such date of determination to (ii) EBITDA of such Person for the four full fiscal quarters for which internal financial statements are available immediately preceding such date. In the event that the Issuer or any of the Restricted Subsidiaries Incurs or redeems any Indebtedness or issues or redeems Disqualified Stock or Non-Guarantor Subsidiaries Incur or redeem Preferred Stock subsequent to the commencement of the period for which the Secured Indebtedness Leverage Ratio is being calculated but on or prior to or simultaneously with the event for which the calculation of the Secured Indebtedness Leverage Ratio is made (the “Secured Leverage Calculation Date”), then the Secured Indebtedness Leverage Ratio shall be calculated giving pro forma effect to such Incurrence or redemption of Indebtedness or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period; provided that the Issuer may elect, pursuant to an Officer’s Certificate delivered to the Trustee, that all or any portion of the commitment under any Secured Indebtedness as being Incurred at the time such commitment is entered into and any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be the creation or Incurrence of Indebtedness or a Lien at such subsequent time. Notwithstanding the foregoing and for purposes of this calculation, the aggregate principal amount of Indebtedness shall be calculated without giving effect to purchase accounting adjustments.

For purposes of making the computation referred to above, Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP) in each case with respect to a company, operating unit, division, segment, business, group of assets or lines of business, that the Issuer or any of the Restricted Subsidiaries has made after the Issue Date and during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Secured Leverage Calculation Date (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation, in each case with respect to an operating unit, division, segment, business, group of assets or lines of business, that would have required adjustment pursuant to this definition, then the Secured Indebtedness Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period. For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting Officer of the Issuer.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Securitization Assets ” means rights to receive payments and funds under relocation contracts and related contracts, homes held for resale, receivables relating to mortgage payments, equity payments and mortgage payoffs, other related receivables, beneficial interests in such assets and assets

 

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relating thereto and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving receivables and similar assets, made subject to a Permitted Securitization Financing, in each case related to the relocation services business.

Securitization Fees ” means distributions or payments made directly or by means of discounts with respect to any participation interests issued or sold in connection with, and all other fees paid to a Person other than the Issuer or any Restricted Subsidiary in connection with any Permitted Securitization Financing.

Securitization Repurchase Obligation ” means any obligation of a seller of Securitization Assets in a Permitted Securitization Financing to repurchase Securitization Assets as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a Securitization Asset or portion thereof becoming subject to any asserted defense, dispute, off set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

Senior Pari Passu Indebtedness ” means:

(1) with respect to the Issuer, the Notes and any Indebtedness that ranks pari passu in right of payment to the Notes; and

(2) with respect to any Note Guarantor, its Note Guarantee and any Indebtedness that ranks pari passu in right of payment to such Note Guarantor’s Note Guarantee.

Separation and Distribution Agreement ” means the Separation and Distribution Agreement by and among Cendant, the Issuer, Travelport Inc. and Wyndham Worldwide Corporation, dated as of July 27, 2006.

Shelf Registration Statement ” means the Shelf Registration Statement as defined in the Registration Rights Agreement.

Significant Subsidiary ” means any Restricted Subsidiary that would be a “Significant Subsidiary” of the Issuer within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC, as such Regulation is in effect on the Issue Date.

Similar Business ” means a business, the majority of whose revenues are derived from the activities of the Issuer and its Restricted Subsidiaries as of the Issue Date or any business or activity that is reasonably similar or complementary to any business conducted or proposed to be conducted by the Issuer and the Restricted Subsidiaries as of the Issue Date or a reasonable extension, development or expansion thereof or ancillary thereto.

Special Purpose Securitization Subsidiary ” means any Restricted Subsidiary (x) party as of the Issue Date to any Existing Securitization Document or (y) (1) to which the Issuer or a Subsidiary of the Issuer transfers or otherwise conveys Securitization Assets, (2) which engages in no activities other than in connection with the receipt, management, transfer and financing of those Securitization Assets and activities incidental or related thereto, (3) none of the obligations of which are guaranteed by the Issuer or any Subsidiary of the Issuer (other than another Special Purpose Securitization Subsidiary) other than pursuant to Standard Securitization Undertakings, and (4) with respect to which neither the Issuer nor any Subsidiary of the Issuer has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.

 

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Sponsors ” means (i) (x) one or more investment funds controlled by Apollo Management, L.P. and (y) Apollo Management, L.P. and its Affiliates (collectively, the “Apollo Sponsors”) and (ii) any Person that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) with any Apollo Sponsors; provided that in the case of clause (ii), any Apollo Sponsor (x) owns a majority of the voting power of such group and (y) controls a majority of the Board of Directors of the Issuer.

Standard Securitization Undertakings ” means representations, warranties (and any related repurchase obligations), servicer obligations, obligations to transfer Securitization Assets, guarantees of performance and payments (other than payments of the obligations backed by the Securitization Assets or obligations of Special Purpose Securitization Subsidiaries), and covenants and indemnities entered into by the Issuer or any Subsidiary of the Issuer of a type that the Board of Directors of the Issuer has determined in good faith to be reasonably customary in securitizations and/or are reasonably similar to those in the Existing Securitization Financings.

Stated Maturity ” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

Subordinated Indebtedness ” means (a) with respect to the Issuer, any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the Notes and (b) with respect to any Note Guarantor, any Indebtedness of such Note Guarantor which is by its terms subordinated in right of payment to its Note Guarantee.

Subsidiary ” means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total ordinary voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof (or persons performing similar functions) is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company or similar entity of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

Tax Distributions ” means any distributions described in clause (12) of Section 4.07(b).

TIA ” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of this Indenture.

Title Resource Group ” means Title Resource Group LLC (formerly known as Cendant Settlement Services Group LLC), a Delaware limited liability company, and any successor thereto.

Total Assets ” means the total consolidated assets of the Issuer and the Restricted Subsidiaries, as shown on the most recent balance sheet of the Issuer.

 

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Transfer Restricted Notes ” means Definitive Notes and any other Notes that bear or are required to bear the Restricted Notes Legend.

Treasury Rate ” means, as of the applicable redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to such redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to April 15, 2013; provided , however, that if the period from such redemption date to April 15, 2013 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

Trust Officer ” means:

(1) any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject, and

(2) who shall have direct responsibility for the administration of this Indenture.

Trustee ” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

U.K. Documents ” means the letter agreement, dated August 12, 2010, by and between Cartus Financing Limited and Lloyds TSB Bank plc and the letter agreement, dated August 13, 2010, by and between Cartus Financing Limited and Lloyds TSB Bank plc, and each other agreement or other document contemplated by or entered into in connection with and/or in replacement of the foregoing, each as amended, restated, refinanced, modified or supplemented on or prior to the Issue Date.

Unrestricted Subsidiary ” means:

(1) any Subsidiary of the Issuer that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of such Person in the manner provided below; and

(2) any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors of the Issuer may designate any Subsidiary of the Issuer (including any newly acquired or newly formed Subsidiary of the Issuer) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, the Issuer or any other Subsidiary of the Issuer that is not a Subsidiary of the Subsidiary to be so designated; provided, however , that the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of the Issuer or any of the Restricted Subsidiaries; provided , further, however, that either:

(a) the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or

 

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(b) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.07

The Board of Directors of the Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however , that immediately after giving effect to such designation:

(x)(1) the Issuer could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described under Section 4.09 or (2) the Fixed Charge Coverage Ratio for the Issuer and the Restricted Subsidiaries would be greater than such ratio for the Issuer and the Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and

(y) no Event of Default shall have occurred and be continuing.

Any such designation by the Board of Directors of the Issuer shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors of the Issuer giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing provisions.

Voting Stock ” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

Weighted Average Life to Maturity ” means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years (calculated to the nearest one-twelfth) from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.

Wholly Owned Restricted Subsidiary ” is any Wholly Owned Subsidiary that is a Restricted Subsidiary.

Wholly Owned Subsidiary ” of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or shares required to be held by foreign nationals) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.

Section 1.02.  Other Definitions.

 

Term

  

Defined in
Section

“Agent Members”

   2.1(d) of Appendix A

“Affiliate Transaction”

   4.11(a)

“Applicable Procedures”

   1.1(a) of Appendix A

“ARSC”

   10.07(a)

“Asset Sale Offer”

   4.10(b)

“Authentication Order”

   2.02

“Automatic Exchange”

   2.3(i) of Appendix A

 

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Term

  

Defined in

Section

“Automatic Exchange Date”

   2.3(i) of Appendix A

“Automatic Exchange Notice”

   2.3(i) of Appendix A

“Automatic Exchange Notice Date”

   2.3(i) of Appendix A

“Cartus”

   10.07(a)

“CFC”

   10.07(a)

“Change of Control Offer”

   4.14(b)

“Change of Control Payment”

   4.14(a)

“Change of Control Payment Date”

   4.14(b)(3)

“Clearstream”

   1.1(a) of Appendix A

“Commission”

   1.03

“Covenant Defeasance”

   8.03

“DTC”

   2.03

“Euroclear”

   1.1(a) of Appendix A

“Event of Default”

   6.01

“Excess Proceeds”

   4.10

“Global Note”

   2.1(b) of Appendix A

“Holdings Guarantee Blockage Notice”

   12.03

“Holdings Guarantee Payment Blockage Period”

   12.03

“Holdings Non-Payment Default”

   12.03

“Holdings Payment Default”

   12.03

“Holdings Permitted Junior Securities”

   12.02

“IAI”

   1.1(a) of Appendix A

“IAI Global Note”

   2.1(b) of Appendix A

“indenture securities”

   1.03

“indenture security Holder”

   1.03

“indenture to be qualified”

   1.03

“Indenture Trustee”

   10.07(a)(i)

“indenture trustee” or “institutional trustee”

   1.03

“Institutional Accredited Investor Notes”

   1.1(a) of Appendix A

“Legal Defeasance”

   8.02

“Note Register”

   2.03

“obligor”

   1.03

“Offer Amount”

   3.09(b)

“Offer Period”

   3.09(b)

“Paying Agent”

   2.03

“pay its Holdings Guarantee”

   12.03

“Pool Assets”

   10.07(a)(ii)

“Purchase Date”

   3.09(b)

“QIB”

   1.1(a) of Appendix A

 

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Term

  

Defined in

Section

“Refinancing Indebtedness”

   4.09(b)(14)

“Refunding Capital Stock”

   4.07(b)(2)

“Registrar”

   2.03

“Regulation S”

   1.1(a) of Appendix A

“Regulation S Global Note”

   2.1(b) of Appendix A

“Regulation S Notes”

   1.1(a) of Appendix A

“Regulation S Permanent Global Note”

   2.1(b) of Appendix A

“Regulation S Temporary Global Note”

   2.1(b) of Appendix A

“Restricted Note”

   2.3(i) of Appendix A

“Restricted Payments”

   4.07(a)

“Restricted Period”

   1.1(a) of Appendix A

“Retired Capital Stock”

   4.07(b)(2)

“Reversion Date”

   4.17(b)

“Rule 501”

   1.1(a) of Appendix A

“Rule 144”

   1.1(a) of Appendix A

“Rule 144A”

   1.1(a) of Appendix A

“Rule 144A Global Note”

   2.1(b) of Appendix A

“Rule 144A Notes”

   1.1(a) of Appendix A

“Rule 904”

   1.1(a) of Appendix A

“Specified Merger/Transfer Transaction”

   5.01(a)

“Successor Company”

   5.01(a)(1)

“Successor Note Guarantor”

   5.01(b)(1)

“Suspended Covenants”

   4.17(a)(2)

“Suspension Date”

   4.17(a)

“Suspension Period”

   4.17(b)

“Transfer”

   5.01(b)

“Unrestricted Note”

   2.3(i) of Appendix A

Section 1.03.  Incorporation by Reference of TIA.

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.

 

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The following TIA terms used in this Indenture have the following meanings:

“Commission” means the SEC;

“indenture securities” means the Notes;

“indenture security Holder” means a Holder of a Note;

“indenture to be qualified” means this Indenture;

“indenture trustee” or “institutional trustee” means the Trustee; and

“obligor” on the Notes, the Holdings Guarantee and the Note Guarantees means the Issuer, Holdings and the Note Guarantors, respectively, and any successor obligor upon the Notes, the Holdings Guarantee and the Note Guarantees, respectively.

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

Section 1.04.  Rules of Construction.

Unless the context otherwise requires:

(i) a term has the meaning assigned to it;

(ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(iii) “or” is not exclusive;

(iv) words in the singular include the plural, and in the plural include the singular;

(v) “will” shall be interpreted to express a command;

(vi) provisions apply to successive events and transactions;

(vii) references to sections of, or rules under, the Securities Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

(viii) unless the context otherwise requires, any reference to an “Article,” “Section” or “clause” refers to an Article, Section or clause, as the case may be, of this Indenture;

(ix) (1) unsecured Indebtedness shall not be deemed to be subordinated or junior to Secured Indebtedness merely because it is unsecured, (2) Senior Indebtedness shall not be deemed to be subordinated or junior to any other Senior Indebtedness merely because it has a junior priority with respect to the same collateral and (3) Indebtedness that is not guaranteed shall not be deemed to be subordinated or junior to Indebtedness that is guaranteed merely because of such guarantee; and

 

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(x) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not any particular Article, Section, clause or other subdivision.

Section 1.05.  Acts of Holders.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Proof of execution of any such instrument or of a writing appointing any such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section 1.05.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

(c) The ownership of Notes shall be proved by the Note Register.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

(e) The Issuer may, in the circumstances permitted by the TIA, set a record date for purposes of determining the identity of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or take any other act, or to vote or consent to any action by vote or consent authorized or permitted to be given or taken by Holders. Unless otherwise specified, if not set by the Issuer prior to the first solicitation of a Holder made by any Person in respect of any such action, or in the case of any such vote, prior to such vote, any such record date shall be the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee prior to such solicitation.

(f) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each such different part.

(g) Without limiting the generality of the foregoing, a Holder, including DTC that is the Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in writing, any

 

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request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and DTC that is the Holder of a Global Note may provide its proxy or proxies to the beneficial owners of interests in any such Global Note through such depositary’s standing instructions and customary practices.

(h) The Issuer may fix a record date for the purpose of determining the Persons who are beneficial owners of interests in any Global Note held by DTC entitled under the procedures of such depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other action shall be valid or effective if made, given or taken more than 90 days after such record date.

ARTICLE 2

THE NOTES

Section 2.01.  Form and Dating; Terms.

(a) General . Provisions relating to the Notes are set forth in Appendix A , which is hereby incorporated in and expressly made a part of this Indenture. The (a) Initial Notes and the Trustee’s certificate of authentication and (b) any Additional Notes (if issued as Transfer Restricted Notes) and the Trustee’s certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Exchange Notes and any Additional Notes issued other than as Transfer Restricted Notes and the Trustee’s certificate of authentication shall each be substantially in the form of Exhibit B hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuer, Holdings or any Note Guarantor is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Note shall be dated the date of its authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

(b) Terms . The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited.

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Issuer, Holdings, the Note Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

Additional Notes ranking pari passu with the Initial Notes may be created and issued from time to time by the Issuer without notice to or consent of the Holders and shall be consolidated with and form a single class with the Initial Notes and shall have the same terms as to status, redemption or otherwise as the Initial Notes; provided that the Issuer’s ability to issue Additional Notes shall be subject to the Issuer’s compliance with Section 4.09 hereof. Any Additional Notes shall be issued with the benefit of an indenture supplemental to this Indenture.

 

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Section 2.02.  Execution and Authentication.

At least one Officer shall execute the Notes on behalf of the Issuer by manual or facsimile signature.

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid.

A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated substantially in the form of Exhibit A or Exhibit B attached hereto, as the case may be, by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been duly authenticated and delivered under this Indenture.

On the Issue Date, the Trustee shall, upon receipt of an Issuer Order (an “ Authentication Order ”), authenticate and deliver the Initial Notes. In addition, at any time, from time to time, the Trustee shall upon an Authentication Order authenticate and deliver any Additional Notes and Exchange Notes for an aggregate principal amount specified in such Authentication Order for such Additional Notes or Exchange Notes issued hereunder.

The Trustee shall not be required to authenticate any Additional Notes, nor will it be liable for its refusal to authenticate any Additional Notes, if the authentication of such Additional Notes will affect the Trustee’s own rights, duties or immunities under the Notes and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee or if the Trustee, being advised by counsel, determines that such action may not lawfully be taken or may expose the Trustee to personal liability to existing Holders or others.

The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Issuer.

Section 2.03.  Registrar and Paying Agent.

The Issuer shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“ Registrar ”) and an office or agency where Notes may be presented for payment (“ Paying Agent ”). The Registrar shall keep a register of the Notes (“ Note Register ”) and of their transfer and exchange. The Issuer may appoint one or more co-registrars and one or more additional paying agents. The term “ Registrar ” includes any co-registrar, and the term “ Paying Agent ” includes any additional paying agent. The Issuer may change any Paying Agent or Registrar without prior notice to any Holder. The Issuer shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Issuer or any of its Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

The Issuer initially appoints The Depository Trust Company (“ DTC ”) to act as Depositary with respect to the Global Notes.

The Issuer initially appoints the Trustee to act as the Paying Agent and Registrar for the Notes and to act as Custodian with respect to the Global Notes.

Section 2.04.  Paying Agent to Hold Money in Trust.

 

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The Issuer shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, or Additional Interest, if any, or interest on the Notes, and will notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary of the Issuer) shall have no further liability for the money. If the Issuer or a Subsidiary of the Issuer acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee shall serve as Paying Agent for the Notes.

Section 2.05.  Holder Lists.

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least two Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes, and the Issuer shall otherwise comply with TIA Section 312(a).

Section 2.06.  Transfer and Exchange.

(a) The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with Appendix A .

(b) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

(c) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Holders shall be required to pay any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).

(d) Neither the Registrar nor the Issuer shall be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

(e) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

(f) The Issuer shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between a Record Date and the next succeeding Interest Payment Date.

 

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(g) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest (including Additional Interest, if any) on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.

(h) Upon surrender for registration of transfer of any Note at the office or agency of the Issuer designated pursuant to Section 4.02 hereof, the Issuer shall execute, and the Trustee shall authenticate and mail, in the name of the designated transferee or transferees, one or more replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.

(i) At the option of the Holder, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and mail, the replacement Global Notes and Definitive Notes which the Holder making the exchange is entitled to in accordance with the provisions of Section 2.02 hereof.

(j) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

Section 2.07.  Replacement Notes.

If any mutilated Note is surrendered to the Trustee, the Registrar or the Issuer and the Trustee receives evidence to its satisfaction of the ownership and destruction, loss or theft of any Note, the Issuer shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Issuer, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuer and the Trustee may charge for their expenses in replacing a Note.

Every replacement Note is a contractual obligation of the Issuer and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

Section 2.08.  Outstanding Notes.

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Note.

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.

If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

 

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If the Paying Agent (other than the Issuer, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.

Section 2.09.  Treasury Notes.

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer, or by any Affiliate of the Issuer, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Trust Officer of the Trustee actually knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right to deliver any such direction, waiver or consent with respect to the Notes and that the pledgee is not the Issuer or any obligor upon the Notes or any Affiliate of the Issuer or of such other obligor.

Section 2.10.  Temporary Notes.

Until certificates representing Notes are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Issuer considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes.

Holders and beneficial holders, as the case may be, of temporary Notes shall be entitled to all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this Indenture.

Section 2.11.  Cancellation.

The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee or, at the direction of the Trustee, the Registrar or the Paying Agent and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy cancelled Notes in accordance with its customary procedures (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all cancelled Notes shall upon the written request of the Issuer be delivered to the Issuer. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.

Section 2.12.  Defaulted Interest.

If the Issuer defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Issuer shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held

 

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in trust for the benefit of the Persons entitled to such defaulted interest as provided in this Section 2.12. The Trustee shall fix or cause to be fixed each such special record date and payment date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. The Trustee shall promptly notify the Issuer of such special record date. At least 15 days before the special record date, the Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) shall mail or cause to be mailed, first-class postage prepaid, to each Holder a notice at his or her address as it appears in the Note Register that states the special record date, the related payment date and the amount of such interest to be paid.

Subject to the foregoing provisions of this Section 2.12 and for greater certainty, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.

Section 2.13.  CUSIP Numbers.

The Issuer in issuing the Notes may use CUSIP numbers (if then generally in use) and, if so, the Trustee shall use CUSIP numbers in notices of redemption as a convenience to Holders; provided , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will as promptly as practicable notify the Trustee in writing of any change in the CUSIP numbers.

Section 2.14.  Calculation of Principal Amount of Notes.

The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes at such date of determination. With respect to any matter requiring consent, waiver, approval or other action of the Holders of a specified percentage of the principal amount of all the Notes, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes, the Holders of which have so consented, by (b) the aggregate principal amount, as of such date of determination, of the Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.08 and Section 2.09 of this Indenture. Any such calculation made pursuant to this Section 2.14 shall be made by the Issuer and delivered to the Trustee pursuant to an Officer’s Certificate.

ARTICLE 3

REDEMPTION

Section 3.01.  Notices to Trustee.

If the Issuer elects to redeem Notes pursuant to Section 3.07 hereof, it shall furnish to the Trustee, at least 5 Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to Section 3.03 hereof but not more than 70 days before a redemption date, an Officer’s Certificate setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of the Notes to be redeemed and (iv) the redemption price.

Section 3.02.  Selection of Notes to Be Redeemed or Purchased.

 

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If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee shall select the Notes to be redeemed or purchased (a) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed or (b) on a pro rata basis or, to the extent that selection on a pro rata basis is not practicable, by lot or by such other method the Trustee shall deem fair and appropriate in accordance with the procedures of DTC, and in each case, such manner as complies with applicable legal requirements. In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption or purchase.

The Trustee shall promptly notify the Issuer in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected shall be in amounts of $2,000 or whole multiples of $1,000 in excess thereof; no Notes of $2,000 or less shall be redeemed or purchased in part, except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1,000 in excess thereof, shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.

Section 3.03.  Notice of Redemption.

Subject to Section 3.09 hereof, the Issuer shall mail or cause to be mailed by first-class mail, postage prepaid (or electronically transmit), notices of redemption at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at such Holder’s registered address or otherwise in accordance with the procedures of DTC, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 13 hereof. Except as set forth in Section 3.07 hereof, notices of redemption may not be conditional.

The notice shall identify the Notes to be redeemed and shall state:

(i) the redemption date;

(ii) the redemption price;

(iii) if any Note is to be redeemed in part only, the portion of the principal amount of that Note that is to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion of the original Note representing the same indebtedness to the extent not redeemed will be issued in the name of the Holder of the Notes upon cancellation of the original Note;

(iv) the name and address of the Paying Agent;

(v) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(vi) that, unless the Issuer defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;

 

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(vii) the paragraph or subparagraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;

(viii) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes; and

(ix) if in connection with a redemption pursuant to Section 3.07(b) hereof, any condition to such redemption.

At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at the Issuer’s expense; provided that the Issuer shall have delivered to the Trustee, at least 5 Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to this Section 3.03 (unless a shorter notice shall be agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

Section 3.04.  Effect of Notice of Redemption.

Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price (except as provided for in Section 3.07(b)). The notice, if mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note.

Section 3.05.  Deposit of Redemption or Purchase Price.

Prior to 10:00 a.m. (New York City time) on the redemption or purchase date, the Issuer shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued and unpaid interest (including Additional Interest, if any) on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest on, all Notes to be redeemed or purchased.

If the Issuer complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest to the redemption or purchase date shall be paid to the Person in whose name such Note was registered at the close of business on such Record Date. If any Note called for redemption or purchase shall not be so paid upon surrender for redemption or purchase because of the failure of the Issuer to comply with the preceding paragraph, interest (including Additional Interest, if any) shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest accrued to the redemption or purchase date not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

Section 3.06.  Notes Redeemed or Purchased in Part.

Upon surrender of a Note that is redeemed or purchased in part, the Issuer shall issue and the Trustee shall authenticate for the Holder at the expense of the Issuer a new Note equal in principal

 

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amount to the unredeemed or unpurchased portion of the Note surrendered representing the same indebtedness to the extent not redeemed or purchased; provided that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. It is understood that, notwithstanding anything in this Indenture to the contrary, only an Authentication Order and not an Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate such new Note.

Section 3.07.  Optional Redemption.

(a) At any time and from time to time prior to April 15, 2013, the Issuer may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice mailed by first class mail to the registered address of each Holder (or electronically transmitted) or otherwise in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the date of redemption, subject to the rights of Holders of Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(b) At any time and from time to time on or prior to April 15, 2013, the Issuer may redeem in the aggregate up to 100% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent of the Issuer, in each case to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer from it, at a redemption price (expressed as a percentage of the principal amount thereof) of 111.500%, plus accrued and unpaid interest and Additional Interest, if any, to the date of redemption (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided, however, that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed (or electronically transmitted) to each Holder of Notes being redeemed and otherwise in accordance with the procedures set forth in this Indenture. Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

(c) Except pursuant to clauses (a) or (b) of this Section 3.07, the Notes will not be redeemable at the Issuer’s option prior to April 15, 2013.

(d) On or after April 15, 2013, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time, upon notice pursuant to Section 3.03 hereof at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable date of redemption, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on April 15 of each of the years indicated below:

 

Year

   Redemption
Price
 

2013

     105.750

2014

     102.875

2015 and thereafter

     100.000

(e) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

 

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Section 3.08.  Mandatory Redemption.

The Issuer shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes.

Section 3.09.  Offers to Repurchase by Application of Excess Proceeds.

(a) In the event that, pursuant to Section 4.10 hereof, the Issuer shall be required to commence an Asset Sale Offer, it shall follow the procedures specified below.

(b) The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “ Offer Period ”). No later than five Business Days after the termination of the Offer Period (the “ Purchase Date ”), the Issuer shall apply all Excess Proceeds (the “ Offer Amount ”) to the purchase of Notes and, if required, Senior Pari Passu Indebtedness (on a pro rata basis, if applicable), or, if less than the Offer Amount has been tendered, all Notes and Senior Pari Passu Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.

(c) If the Purchase Date is on or after a Record Date and on or before the related Interest Payment Date, any accrued and unpaid interest and Additional Interest, if any, up to but excluding the Purchase Date, shall be paid to the Person in whose name a Note is registered at the close of business on such Record Date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

(d) The Issuer shall send, by first-class mail (or electronic transmission) at least 30 but not more than 60 days before the Purchase Date, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders and holders of Senior Pari Passu Indebtedness. The notice, which shall govern the terms of the Asset Sale Offer, shall state:

(1) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open;

(2) the Offer Amount, the purchase price and the Purchase Date;

(3) that any Note not tendered or accepted for payment shall continue to accrue interest;

(4) that, unless the Issuer defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Purchase Date;

(5) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in amounts of $2,000 or in integral multiples of $1,000 in excess thereof only;

(6) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Note completed, or transfer by book-entry

 

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transfer, to the Issuer, the Depositary, if appointed by the Issuer, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

(7) that Holders shall be entitled to withdraw their election if the Issuer, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

(8) that, if the aggregate principal amount of Notes and Senior Pari Passu Indebtedness surrendered by the holders thereof exceeds the Offer Amount, the Trustee shall select the Notes and such Senior Pari Passu Indebtedness to be purchased in compliance with the requirements of the principal national securities exchange, if any, on which such Notes are listed or, if such Notes are not so listed, on a pro rata basis, by lot or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies with applicable legal requirements) on a pro rata basis based on the accreted value or principal amount of the Notes or such Senior Pari Passu Indebtedness tendered (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $2,000 or in integral multiples of $1,000 in excess thereof, shall be purchased); and

(9) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer) representing the same indebtedness to the extent not repurchased.

(e) On or before the Purchase Date, the Issuer shall, to the extent lawful, (1) accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof validly tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered and (2) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof so tendered.

(f) The Issuer, the Depositary or the Paying Agent, as the case may be, shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes properly tendered by such Holder and accepted by the Issuer for purchase, and the Issuer shall promptly issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and mail or deliver (or cause to be transferred by book-entry) such new Note to such Holder (it being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate and mail or deliver such new Note) in a principal amount equal to any unpurchased portion of the Note surrendered representing the same indebtedness to the extent not repurchased; provided , that each such new Note shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. Any Note not so accepted shall be promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer shall notify the Holders of the results of the Asset Sale Offer on or as soon as practicable after the Purchase Date.

Other than as specifically provided in this Section 3.09 or Section 4.10 hereof, any purchase pursuant to this Section 3.09 shall be made pursuant to the applicable provisions of Sections 3.01 through 3.06 hereof.

 

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ARTICLE 4

COVENANTS

Section 4.01.  Payment of Notes.

The Issuer shall pay or cause to be paid the principal of, premium, if any, Additional Interest, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, Additional Interest, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Issuer or a Wholly Owned Subsidiary, holds as of noon Eastern Time on the due date money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, Additional Interest, if any, and interest then due.

The Issuer shall pay all Additional Interest, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement.

The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest (without regard to any applicable grace period) at the same rate to the extent lawful.

Section 4.02.  Maintenance of Office or Agency.

The Issuer shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

Subject to the preceding paragraph, the Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency for such purposes. The Issuer shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Issuer hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Issuer in accordance with Section 2.03 hereof.

Section 4.03.  Reports and Other Information.

(a) Notwithstanding that the Issuer may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Issuer shall file with the SEC (and provide the Trustee and Holders with copies thereof by posting such information on its primary website),

 

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(1) as soon as available and in any event on or before the date on which such reports would be required to be filed with the SEC (if the Issuer were a non-accelerated filer subject to Section 13 or 15(d) of the Exchange Act), annual reports on Form 10-K (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form),

(2) as soon as available and in any event on or before the date on which such reports would be required to be filed with the SEC (if the Issuer were a non-accelerated filer subject to Section 13 or 15(d) of the Exchange Act), reports on Form 10-Q (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form),

(3) promptly from time to time after the occurrence of an event required to be therein reported (and in any event within the time period specified for filing current reports on Form 8-K by the SEC), reports on Form 8-K (or any successor or comparable form), and

(4) any other information, documents and other reports which the Issuer would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;

in each case in a manner that complies in all material respects with the requirements specified in such form.

Notwithstanding the foregoing, all required reports, information and documents referred to in this Section 4.03(a) shall be deemed to be delivered to the Trustee at the time when (i) the Issuer has filed such reports, information and documents with the SEC via the EDGAR filing system (or any successor system) and (ii) such reports are publicly available.

(b) If at any time any direct or indirect parent of the Issuer (x) becomes a Guarantor (there being no obligation of any parent to do so), (y) holds no material assets other than cash, Cash Equivalents and the Capital Stock of the Issuer or of any direct or indirect parent corporation of the Issuer (and performs the related incidental activities associated with such ownership) and (z) complies with the requirements of Rule 3-10 of Regulation S-X promulgated by the SEC (or any successor provision), the reports, information and other documents required to be filed and furnished to Holders of the Notes pursuant to this Section 4.03 may, at the option of the Issuer, be filed or furnished by and be those of such direct and indirect parent of the Issuer rather than the Issuer.

(c) The Issuer will make such information available to prospective investors upon request. In addition, the Issuer has agreed that, for so long as any Notes remain outstanding during any period when it is not subject to Section 13 or 15(d) of the Exchange Act, it will furnish to the Holders of the Notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(d) If the Issuer has designated any of its Subsidiaries as Unrestricted Subsidiaries and such Unrestricted Subsidiaries, either individually or collectively, would otherwise have been a Significant Subsidiary, then the quarterly and annual financial information required by this Section 4.03 shall include a reasonably detailed unaudited discussion (as determined in good faith by senior management of the Issuer) of the financial condition and results of operations of the Issuer and the Restricted Subsidiaries of the Issuer separate from the financial condition and results of operations of the Unrestricted Subsidiaries.

 

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(e) Notwithstanding anything herein to the contrary, the Issuer will not be deemed to have failed to comply with any of its agreements under this Section 4.03 for purposes of Section 6.01(a)(4) until 120 days after the date any report hereunder is required to be filed with the SEC (or otherwise made available to Holders or the Trustee) pursuant to this Section 4.03.

Section 4.04.  Compliance Certificate.

The Issuer, Holdings and each Note Guarantor (to the extent that Holdings or such Note Guarantor is so required under the TIA) shall deliver to the Trustee, within 120 days after the end of each fiscal year ending after the Issue Date, a certificate from the principal executive officer, principal financial officer or principal accounting officer stating, as to such Officer signing such certificate, that to the best of his or her knowledge, the Issuer has complied with each and every condition and covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions, covenants and conditions of this Indenture (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action the Issuer is taking or proposes to take with respect thereto). The Issuer, Holdings and the Note Guarantors shall also comply with Section 314(a)(4) of the TIA.

Section 4.05.  Taxes.

The Issuer shall pay, and shall cause each of its Restricted Subsidiaries to pay, prior to delinquency, all material taxes, assessments and governmental levies except such as are contested in good faith and by appropriate negotiations or proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.

Section 4.06.  Stay, Extension and Usury Laws.

The Issuer, Holdings and each of the Note Guarantors covenant (to the extent that they may lawfully do so) that they shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer, Holdings and each of the Note Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant that they shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.

Section 4.07.  Limitation on Restricted Payments.

(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly:

(I) declare or pay any dividend or make any distribution on account of the Issuer’s or any of the Restricted Subsidiaries’ Equity Interests, including any payment made in connection with any merger, amalgamation or consolidation involving the Issuer other than:

(A) dividends or distributions by the Issuer payable solely in Equity Interests (other than Disqualified Stock) of the Issuer; or

(B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Restricted

 

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Subsidiary, the Issuer or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities;

(II) purchase or otherwise acquire or retire for value any Equity Interests of the Issuer or any direct or indirect parent of the Issuer, including in connection with any merger or consolidation;

(III) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of the Issuer or any Note Guarantor other than the payment, redemption, repurchase, defeasance, acquisition or retirement of:

(A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement; and

(B) Indebtedness permitted under clauses (7) and (9) of Section 4.09(b); or

(IV) make any Restricted Investment (all such payments and other actions set forth in clauses (I) through (IV) above being collectively referred to as “ Restricted Payments ”), unless, at the time of such Restricted Payment:

(A) no Default shall have occurred and be continuing or would occur as a consequence thereof;

(B) immediately after giving effect to such transaction on a pro forma basis, the Issuer could Incur $1.00 of additional Indebtedness under Section 4.09(a); and

(C) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and the Restricted Subsidiaries after the Original Issue Date (including Restricted Payments permitted by clauses (1), (4) (only to the extent of one-half of the amounts paid pursuant to such clause), (6), (8) and (18) of Section 4.07(b), but excluding all other Restricted Payments permitted by Section 4.07(b), is less than the amount equal to the Cumulative Credit.

(b) The foregoing provisions of Section 4.07(a) hereof shall not prohibit:

(1) the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Indenture;

(2) (a) the redemption, repurchase, retirement or other acquisition of any Equity Interests (“ Retired Capital Stock ”) or Subordinated Indebtedness of the Issuer, any direct or indirect parent of the Issuer or any Note Guarantor in exchange for, or out of the proceeds of, the substantially concurrent sale of Equity Interests of the Issuer or any direct or indirect parent of the Issuer or contributions to the equity capital of the Issuer (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of the Issuer) (collectively, including any such contributions, “ Refunding Capital Stock ”); and (b) the declaration and payment of accrued dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of the Issuer) of Refunding Capital Stock and if immediately prior to the retirement of

 

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Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6) of this Section 4.07(b) and not made pursuant to this clause (2)(b), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent of the Issuer) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Retired Capital Stock immediately prior to such retirement;

(3) the redemption, repurchase, defeasance or other acquisition or retirement of Subordinated Indebtedness of the Issuer or any Note Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale (or as promptly as practicable after giving any requisite notice to the Holders of such Subordinated Indebtedness) of, new Indebtedness of the Issuer or a Note Guarantor that is Incurred in accordance with Section 4.09 so long as:

(a) the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable), plus any accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired plus any tender premiums, defeasance costs or other fees and expenses incurred in connection therewith),

(b) such new Indebtedness is subordinated to the Notes or the related Note Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,

(c) such new Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) 91 days following the maturity date of the Notes, and

(d) such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired that were due on or after the date one year following the maturity date of any Notes then outstanding were instead due on such date one year following the maturity date of such Notes (provided that, in the case of this sub-clause (d)(y), such Indebtedness does not provide for any scheduled principal payments prior to the maturity date of the Notes in excess of, or prior to, the scheduled principal payments due prior to such maturity for the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased);

(4) a Restricted Payment to pay for the redemption, repurchase, retirement or other acquisition for value of Equity Interests of the Issuer or any direct or indirect parent of the Issuer held by any future, present or former employee, director or consultant of the Issuer or any direct or indirect parent of the Issuer or any Subsidiary of the Issuer pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided, however , that the aggregate amounts paid under this clause (4) do not exceed $30.0 million in any calendar year (with unused amounts in any calendar year being permitted to be carried over for the two succeeding calendar years subject to a maximum payment

 

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(without giving effect to the following proviso) of $60.0 million in any calendar year); provided , further, however, that such amount in any calendar year may be increased by an amount not to exceed:

(a) the cash proceeds received by the Issuer or any of the Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of the Issuer or any direct or indirect parent of the Issuer (to the extent contributed to the Issuer) to members of management, directors or consultants of the Issuer and the Restricted Subsidiaries or any direct or indirect parent of the Issuer that occurs after the Original Issue Date; plus

(b) the cash proceeds of key man life insurance policies received by the Issuer or any direct or indirect parent of the Issuer (to the extent contributed to the Issuer) or the Restricted Subsidiaries after the Original Issue Date; less

(c) the amount of any Restricted Payments previously made pursuant to sub-clauses (a) and (b) of this second proviso of clause (4);

provided that the Issuer may elect to apply all or any portion of the aggregate increase contemplated by sub-clauses (a) and (b) above in any calendar year;

(5) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Issuer or any of the Restricted Subsidiaries issued or Incurred in accordance with Section 4.09;

(6) (a) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date, (b) a Restricted Payment to any direct or indirect parent of the Issuer, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent of the Issuer issued after the Issue Date and (c) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (2) of this paragraph; provided, however , that, (x) in the case of sub-clauses (a), (b) and (c) of this clause (6), for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or Refunding Capital Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis, the Issuer would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00 and (y) the aggregate amount of dividends declared and paid pursuant to sub-clauses (a) and (b) of this clause (6) does not exceed the net cash proceeds actually received by the Issuer from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date;

(7) Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (7) that are at that time outstanding, not to exceed the greater of $75.0 million and 0.625% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided , that the dollar amount of Investments made pursuant to this clause (7) may be reduced by the Fair Market Value of the proceeds received by the Issuer and/or its Restricted Subsidiaries from the subsequent sale, disposition or other transfer of such Investments (with such Fair Market Value being measured at the time of such sale, disposition or other transfer without giving effect to subsequent changes in value);

 

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(8) the payment of dividends on the Issuer’s common stock (or a Restricted Payment to any direct or indirect parent of the Issuer to fund the payment by such direct or indirect parent of the Issuer of dividends on such entity’s common stock) of up to 6.0% per annum of the net cash proceeds received (including, without limitation, contributions to the Issuer with the proceeds of sales of common stock of any direct or indirect parent) by the Issuer from any public offering of common stock of the Issuer or any direct or indirect parent of the Issuer;

(9) Restricted Payments that are made with Excluded Contributions;

(10) other Restricted Payments in an aggregate amount taken together with all other Restricted Payments made pursuant to this clause (10) not to exceed the greater of $125.0 million and 1.00% of Total Assets at the time made; provided that the aggregate amount of Restricted Payments made pursuant to this clause (10) for Restricted Payments of the types described in clauses (I) and (II) of the definition of Restricted Payment shall not exceed $25.0 million;

(11) the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Issuer or a Restricted Subsidiary by, Unrestricted Subsidiaries;

(12) the payment of dividends or other distributions to any direct or indirect parent of the Issuer in amounts required for such parent to pay federal, state or local income taxes (as the case may be) imposed directly on such parent to the extent such income taxes are attributable to the income of the Issuer and the Restricted Subsidiaries (including, without limitation, by virtue of such parent being the common parent of a consolidated or combined tax group of which the Issuer and/or the Restricted Subsidiaries are members);

(13) the payment of any Restricted Payment, if applicable:

(a) in amounts required for any direct or indirect parent of the Issuer, if applicable, to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of the Issuer, if applicable, and general corporate overhead expenses of any direct or indirect parent of the Issuer, if applicable, in each case to the extent such fees and expenses are attributable to the ownership or operation of the Issuer, if applicable, and its Restricted Subsidiaries (provided, that for so long as such direct or indirect parent owns no assets other than the Equity Interests in the Issuer or another direct or indirect parent of the Issuer, such fees and expenses shall be deemed for purposes of this clause (13)(a) to be so attributable to such ownership or operation);

(b) in amounts required for any direct or indirect parent of the Issuer, if applicable, to pay interest and/or principal on Indebtedness that satisfies each of the following: (i) the proceeds of which have been contributed to the Issuer or any of the Restricted Subsidiaries and (ii) that has been guaranteed by, or is otherwise considered Indebtedness of, the Issuer Incurred in accordance with Section 4.09; and

(c) in amounts required for any direct or indirect parent of the Issuer to pay fees and expenses, other than to Affiliates of the Issuer, related to any unsuccessful equity or debt offering of such parent;

(14) Restricted Payments used to fund the Merger Transactions and the payment of fees and expenses incurred in connection with the Merger Transactions (including as a result of the cancellation or vesting of outstanding options and other equity-based awards in connection

 

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therewith) as described in the Existing Notes Offering Memorandum (including payments made pursuant to or as contemplated by the Merger Documents, whether payable on the Original Issue Date or thereafter) or owed by the Issuer, any direct or indirect parent of the Issuer or any Restricted Subsidiary to Affiliates, in each case to the extent permitted by Section 4.11; provided that payments to Affiliates due to the termination of the Management Fee Agreement or similar agreements shall be permitted by this clause (14) only to the extent such termination is attributable to an underwritten registered public offering of the common stock of the Issuer or any direct or indirect parent of the Issuer or to a Change of Control;

(15) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(16) purchases of receivables pursuant to a Securitization Repurchase Obligation in connection with a Permitted Securitization Financing and the payment or distribution of Securitization Fees;

(17) Restricted Payments by the Issuer or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock or debt securities that are convertible into, or exchangeable for, Capital Stock of any such Person;

(18) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions described under, or provisions similar to those described under Sections 4.10 and 4.14; provided that a Change of Control Offer or Asset Sale Offer, as applicable, has been made and all Notes tendered by Holders of the Notes in connection with a Change of Control or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value;

(19) cash dividends or other distributions in respect of the Issuer’s Capital Stock used to, or the making of loans to any direct or indirect parent of the Issuer in order to, fund the payment of expenses of the type and in the amount described in clauses (3) and (5) of Section 4.11(b) to the extent that such amounts are not paid directly by the Issuer or any its Subsidiaries;

(20) the redemption, repurchase, defeasance or other acquisition or retirement of the Existing Senior Subordinated Notes and the related Existing Senior Subordinated Note Guarantees; provided that the aggregate amounts paid under this clause (20) do not exceed $50.0 million; and

(21) the redemption of the Convertible Notes and the related Convertible Note Guarantees not owned by the Apollo Sponsors upon a Qualified Public Offering (as defined in the Convertible Note Indenture) or at any time thereafter at a price equal to no greater than 90% of the principal amount thereof in accordance with the terms of the Convertible Note Indenture; provided that to the extent the Issuer uses the proceeds of the substantially concurrent sale of Equity Interests of the Issuer or any direct or indirect parent of the Issuer or contributions to the equity capital of the Issuer to redeem the Convertible Notes not owned by the Apollo Sponsors, such redemption shall be deemed to have been made pursuant to clause 2(a) above.

provided, however , that at the time of, and after giving effect to, any Restricted Payment permitted under clause (6), (7), (10), (11) or (14) (with respect to payments owed to the Sponsors or their Affiliates as

 

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permitted by Section 4.11) of this Section 4.07(b), no Default shall have occurred and be continuing or would occur as a consequence thereof.

(c) For the avoidance of doubt, payments made after the Original Issue Date of the Cendant Contingent Liabilities shall not be deemed Restricted Payments.

(d) The amount of any Restricted Payment (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Issuer or such Subsidiary, as the case may be, pursuant to the Restricted Payment. Except as otherwise provided herein, the Fair Market Value of any assets or securities that are required to be valued by this Section 4.07 will be determined in good faith by senior management or the Board of Directors of the Issuer.

(e) As of the Issue Date, all of the Issuer’s Subsidiaries will be Restricted Subsidiaries. The Issuer will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and the Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of “Investments.” Such designation will only be permitted if a Restricted Payment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

(f) Notwithstanding the foregoing, the Issuer will not, and will not permit any of the Restricted Subsidiaries to, pay any cash dividend or make any cash distribution on account of the Issuer’s Equity Interests or purchase for cash or otherwise redeem, acquire or retire for cash any Equity Interests of the Issuer or any direct or indirect parent of the Issuer or guarantee any Indebtedness of an Affiliate of the Issuer for the purposes of any of the foregoing, in each case for the benefit of the Sponsors, by means of (i) the application of the Cumulative Credit in accordance with the definition thereof and Section 4.07(a), (ii) utilization of clauses (1), (7), (10) or (11) of Section 4.07(b) or (iii) utilization of clauses (9), (10) or (18) of the definition of Permitted Investments, unless in each case at the time of such payment the Consolidated Leverage Ratio of the Issuer would have been equal to or less than 6.0 to 1.0 on a pro forma basis and otherwise in compliance with this Section 4.07.

Section 4.08.  Dividend and Other Payment Restrictions Affecting Subsidiaries.

(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

(1) (A) pay dividends or make any other distributions to the Issuer or any of the Restricted Subsidiaries (i) on its Capital Stock or (ii) with respect to any other interest or participation in, or measured by, its profits or (B) pay any Indebtedness owed to the Issuer or any of the Restricted Subsidiaries;

(2) make loans or advances to the Issuer or any of the Restricted Subsidiaries; or

(3) sell, lease or transfer any of its properties or assets to the Issuer or any of the Restricted Subsidiaries.

 

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(b) Section 4.08(a) hereof shall not apply to encumbrances or restrictions existing under or by reason of:

(1) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Credit Agreement and the other Credit Agreement Documents;

(2) the Extended Maturity Note Indentures and the Extended Maturity Notes and the Extended Maturity Notes Guarantees (and any exchange Extended Maturity Notes and guarantees thereof) and the Existing Indentures and the Existing Notes and the Existing Note Guarantees;

(3) applicable law or any applicable rule, regulation or order;

(4) any agreement or other instrument of a Person acquired by the Issuer or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or its Subsidiaries, or the property or assets of the Person or its Subsidiaries, so acquired;

(5) contracts or agreements for the sale of assets, including restrictions with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition;

(6) Secured Indebtedness otherwise permitted to be Incurred pursuant to Sections 4.09 and 4.12 hereof that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(7) restrictions on cash or other deposits (including escrowed funds) or net worth imposed by customers and franchisees under contracts entered into in the ordinary course of business;

(8) customary provisions in joint venture agreements and other similar agreements relating solely to such joint venture entered into in the ordinary course of business;

(9) purchase money obligations and Capitalized Lease Obligations, in each case for property acquired or leased in the ordinary course of business that impose restrictions of the nature discussed in clause (3) of Section 4.08(a) above on the property so acquired or leased;

(10) customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business that impose restrictions of the type described in clause (3) of Section 4.08(a) above on the property subject to such lease;

(11) any encumbrance or restriction on a Special Purpose Securitization Subsidiary that, in the good faith judgment of senior management or the Board of Directors of the Issuer, is reasonably required in connection therewith; provided, however , that such restrictions apply only to Special Purpose Securitization Subsidiaries;

(12) other Indebtedness or Disqualified Stock of the Issuer or any of its Restricted Subsidiaries or Preferred Stock of any Non-Guarantor Subsidiary that is Incurred subsequent to the Issue Date and permitted pursuant to Section 4.09; provided that such encumbrances and

 

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restrictions contained in any agreement or instrument will not materially affect the Issuer’s ability to make anticipated principal or interest payments on the Notes (as determined in good faith by senior management or the Board of Directors of the Issuer); or

(13) any encumbrances or restrictions of the type referred to in clauses (1), (2) and (3) of Section 4.08(a) imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (12) of this Section 4.08(b); provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of senior management or the Board of Directors of the Issuer, no more restrictive with respect to such encumbrances and other restrictions taken as a whole than those contained in the encumbrances or other restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

(c) For purposes of determining compliance with this Section 4.08, (1) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (2) the subordination of loans or advances made to the Issuer or a Restricted Subsidiary to other Indebtedness Incurred by the Issuer or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

Section 4.09.  Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.

(a) (1) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (2) the Issuer shall not permit any of the Non-Guarantor Subsidiaries to issue any shares of Preferred Stock; provided, however , that the Issuer and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Non-Guarantor Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Issuer for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided, further, that the amount of Indebtedness that may be Incurred and Disqualified Stock or Preferred Stock that may be issued in each case pursuant to the foregoing by Non-Guarantor Subsidiaries shall not exceed $300.0 million at any one time outstanding.

(b) The limitations set forth in Section 4.09(a) hereof shall not apply to:

(1) the Incurrence by the Issuer or the Restricted Subsidiaries of Indebtedness under the Credit Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $3,300.0 million at any one time outstanding, less all principal repayments of Indebtedness Incurred under this clause (1) with the Net Proceeds of Asset Sales utilized in accordance with Section 4.10(b)(1)(a) that permanently reduces the commitments thereunder;

 

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(2) the Incurrence by the Issuer and the Note Guarantors of Indebtedness represented by the New Notes (not including any additional Extended Maturity Notes), the Extended Maturity Notes Guarantees and the Convertible Note Guarantees (including exchange Extended Maturity Notes and related guarantees thereof);

(3) Indebtedness of the Issuer and its Restricted Subsidiaries existing on the Original Issue Date (other than Indebtedness described in clause (1) of this Section 4.09(b) but including the Existing Notes and Existing Note Guarantees);

(4) (A) Indebtedness (including Capitalized Lease Obligations) Incurred by the Issuer or any of the Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of the Restricted Subsidiaries and Preferred Stock issued by any Non-Guarantor Subsidiaries to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) (whether through the direct purchase of property or the Capital Stock of any Person owning such property) and (B) Acquired Indebtedness, in an aggregate principal amount that, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (4), does not exceed $325.0 million;

(5) Indebtedness Incurred by the Issuer or any of the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;

(6) Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or acquisition price or similar obligations, in each case Incurred in connection with the Merger Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;

(7) Indebtedness of the Issuer to a Restricted Subsidiary; provided that, other than in the case of intercompany current liabilities Incurred in the ordinary course of business in connection with the cash management operations of the Issuer and its Subsidiaries to finance working capital needs of the Subsidiaries, any such Indebtedness owed to a Restricted Subsidiary that is not a Note Guarantor is expressly subordinated (if legally permissible) in right of payment to the obligations of the Issuer under the Notes; provided, further , that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (7);

(8) shares of Preferred Stock of a Non-Guarantor Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Non-Guarantor Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any

 

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other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (8);

(9) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that, other than in the case of intercompany current liabilities Incurred in the ordinary course of business in connection with the cash management operations of the Issuer and its Subsidiaries to finance working capital needs of its Subsidiaries, if a Note Guarantor incurs such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that is not a Note Guarantor, such Indebtedness is expressly subordinated (if legally permissible) in right of payment to the Note Guarantee of such Note Guarantor; provided, further , that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (9);

(10) Hedging Obligations that are not incurred for speculative purposes and are either (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; (C) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales; or (D) any combination of the foregoing;

(11) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Issuer or any Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice;

(12) Indebtedness or Disqualified Stock of the Issuer or any Restricted Subsidiary and Preferred Stock of any Non-Guarantor Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and deemed Incurred pursuant to this clause (12), does not exceed $325.0 million; provided that the aggregate principal amount or liquidation preference of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued, as the case may be, under this clause (12) by Non-Guarantor Subsidiaries shall not exceed $50.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (12) shall cease to be deemed Incurred or outstanding for purposes of this clause (12) but shall be deemed Incurred for purposes of Section 4.09(a) from and after the first date on which the Issuer, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.09(a) without reliance upon this clause (12));

(13) any guarantee by (x) the Issuer or a Note Guarantor of Indebtedness or other obligations of the Issuer or any of the Restricted Subsidiaries, (y) a Foreign Subsidiary of Indebtedness or other obligations of another Foreign Subsidiary or (z) a Non-Guarantor Subsidiary of Indebtedness or other obligations of another Non-Guarantor Subsidiary, in each case so long as the Incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of the Issuer or such Note Guarantor with respect to

 

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such Indebtedness shall be subordinated in right of payment to the Notes (in the case of a guarantee by the Issuer) or to such Note Guarantor’s Note Guarantee (in the case of a guarantee by a Note Guarantor) substantially to the same extent as such Indebtedness is subordinated to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable;

(14) the Incurrence by the Issuer or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or the Incurrence by a Non-Guarantor Subsidiary of Preferred Stock that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.09(a) and clauses (2), (3), (4), (14), (15), (19) and (20) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “ Refinancing Indebtedness ”) prior to its respective maturity; provided, however , that such Refinancing Indebtedness:

 

  (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the maturity date of any Notes then outstanding were instead due on such date one year following the maturity date of such Notes ( provided that any Refinancing Indebtedness Incurred in reliance on this sub-clause (A)(y) does not provide for any scheduled principal payments prior to the maturity date of the Notes in excess of, or prior to, the scheduled principal payments due prior to such maturity for the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased);

 

  (B) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or defeased or (y) 91 days following the maturity date of the Notes;

 

  (C) to the extent such Refinancing Indebtedness refinances (i) Indebtedness junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock, as the case may be;

 

  (D) is Incurred in an aggregate amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premiums (including tender premiums), expenses, defeasance costs and fees Incurred in connection with such refinancing;

 

  (E)

shall not include (x) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that is not a Note Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary that

 

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is a Note Guarantor, or (y) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and

 

  (F) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (4), (19) or (20), shall be deemed to have been Incurred and to be outstanding under such clause (4), (19) or (20), as applicable, and not this clause (14) for purposes of determining amounts outstanding under such clauses (4), (19) and (20);

and provided, further , that sub-clauses (A) and (B) of this clause (14) shall not apply to any refunding, refinancing or defeasance of any Bank Indebtedness or the Existing Senior Notes to the extent refinanced or defeased with the proceeds of Bank Indebtedness.

(15) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Issuer or any of the Restricted Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any of the Restricted Subsidiaries or merged or amalgamated with or into the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however , that after giving effect to such acquisition, merger or amalgamation and the Incurrence of such Indebtedness either:

 

  (1) the Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a); or

 

  (2) the Fixed Charge Coverage Ratio of the Issuer would be equal to or greater than immediately prior to such acquisition, merger or amalgamation;

(16) [Reserved];

(17) Indebtedness (x) arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business or other cash management services in the ordinary course of business; provided , that (i) such Indebtedness (other than credit or purchase cards) is extinguished within ten Business Days of notification to the Issuer of its incurrence and (ii) such Indebtedness in respect of credit or purchase cards is extinguished within 60 days from its Incurrence and (y) in respect of cash management lines or facilities so long as the Indebtedness deemed Incurred pursuant to this clause (17)(y) does not exceed $50.0 million at any one time outstanding;

(18) Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit or bank guarantee;

(19) Indebtedness or Disqualified Stock of the Issuer or any Restricted Subsidiary and Preferred Stock of any Non-Guarantor Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference not exceeding at any time outstanding 200% of the net cash proceeds received by the Issuer and the Restricted Subsidiaries since immediately after the Original Issue Date from the issue or sale of Equity Interests of the Issuer or any direct or indirect parent entity of the Issuer (which proceeds are contributed to the Issuer or a Restricted Subsidiary) or cash contributed to the capital of the Issuer (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, the Issuer or any of its Subsidiaries), as determined in accordance with clauses (2) and (3) of the definition of

 

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Cumulative Credit, to the extent such net cash proceeds or cash have not been applied to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);

(20) Indebtedness of Foreign Subsidiaries; provided, however , that the aggregate principal amount of Indebtedness Incurred under this clause (20), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (20), does not exceed the greater of $100.0 million at any one time outstanding and 0.75% of Total Assets at the time of Incurrence (it being understood that any Indebtedness Incurred under this clause (20) shall cease to be deemed Incurred or outstanding for purposes of this clause (20) but shall be deemed Incurred for purposes of Section 4.09(a) from and after the first date on which the Foreign Subsidiary could have Incurred such Indebtedness under Section 4.09(a), and the other provisions of this Indenture, without reliance upon this clause (20));

(21) Indebtedness of the Issuer or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;

(22) Indebtedness Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Issuer or any Restricted Subsidiary not in excess of the greater of $50.0 million at any one time outstanding and 0.5% of Total Assets at the time of Incurrence;

(23) Indebtedness issued by the Issuer or a Restricted Subsidiary to current or former officers, directors and employees thereof or any direct or indirect parent thereof, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer or any of its direct or indirect parent companies to the extent permitted under Section 4.07(b)(4);

(24) Indebtedness in respect of letters of credit issued under the Credit Agreement to support Contingent Obligations of the Issuer and the Restricted Subsidiaries arising under the Separation and Distribution Agreement not to exceed $300.0 million (including any refinancing thereof under the Credit Agreement);

(25) Indebtedness representing deferred compensation or other similar arrangements to employees and directors of the Issuer or any Subsidiary Incurred in the ordinary course of business or in connection with the Merger Transactions, an acquisition or any other Permitted Investment;

(26) Indebtedness of the Issuer or any Restricted Subsidiary in respect of Arbitrage Programs in an aggregate principal amount not to exceed the sum of (i) $10 million and (ii) the aggregate amount of Permitted Investments related thereto from time to time made after the Original Issue Date; and

(27) Indebtedness of the Issuer or any Restricted Subsidiary assumed in connection with the acquisition of homes and related assets in the ordinary course of its relocation services business, which Indebtedness in each case exists at the time of such acquisition and is not created in contemplation of such event.

For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the

 

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categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (1) through (27) above or is entitled to be Incurred pursuant to Section 4.09(a), the Issuer shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section 4.09 and the other provisions of this Indenture; provided that (A) all Indebtedness under the Credit Agreement outstanding on the Issue Date (except for Indebtedness outstanding under the Delayed Draw Term Loan, which Delayed Draw Term Loan shall be deemed to have been Incurred on the Issue Date pursuant to clause (14) above as Refinancing Indebtedness in respect of Secured Indebtedness existing on the Original Issue Date and permitted under clause (3) above) shall be deemed to have been Incurred on the Issue Date pursuant to clause (1) above and the Issuer shall not be permitted to later reclassify all or any portion of such Indebtedness under the Credit Agreement outstanding on the Issue Date, (B) the Issuer shall not be permitted to later reclassify or divide all or any portion of the Indebtedness Incurred pursuant to clause (24) above and (C) all Indebtedness outstanding on the Issue Date and Incurred on or after the Original Issue Date that was permitted under the Existing Indentures prior to the Issue Date pursuant to a clause corresponding to any of clauses (4), (12), (17)(y), (19), (20), (22), (24) or (26) above shall be deemed to have been Incurred and outstanding on the Issue Date pursuant to the corresponding clause above. Accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness with the same terms (including pay-in-kind payments with respect to the Existing Senior Toggle Notes), the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.09. Note Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.09.

For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.

The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

Section 4.10.  Asset Sales.

(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, cause or make an Asset Sale, unless:

 

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(1) the Issuer or any of the Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by senior management or the Board of Directors of the Issuer) of the assets sold or otherwise disposed of; and

(2) at least 75% of the consideration therefor received by the Issuer or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided that the amount of:

(A) any liabilities (as shown on the Issuer’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of the Issuer or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Note Guarantee) (x) that are assumed by the transferee of any such assets and from which the Issuer and all of its Restricted Subsidiaries have been validly released by all creditors in writing or (y) in respect of which neither the Issuer nor any Restricted Subsidiary following such Asset Sale has any obligation,

(B) any notes or other obligations or other securities or assets received by the Issuer or such Restricted Subsidiary from such transferee that are converted by the Issuer or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received), and

(C) any Designated Non-cash Consideration received by the Issuer or any of the Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by senior management or the Board of Directors of the Issuer), taken together with all other Designated Non-cash Consideration received pursuant to this clause (C) that is at that time outstanding, not to exceed the greater of (x) 1.50% of Total Assets and (y) $175 million at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value), shall be deemed to be Cash Equivalents for purposes of this Section 4.10(a).

(b) Within 450 days after the Issuer’s or any Restricted Subsidiary’s receipt of the Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary may apply the Net Proceeds from such Asset Sale, at its option:

(1) to repay (other than obligations in respect of a Permitted Securitization Financing) (a) Secured Indebtedness, including Indebtedness under the Credit Agreement (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), (b) Indebtedness of a Non-Guarantor Subsidiary, or (c) Senior Pari Passu Indebtedness (provided that if the Issuer or any Note Guarantor shall so reduce Obligations under unsecured Senior Pari Passu Indebtedness, the Issuer will equally and ratably reduce Obligations under the Notes as provided in Section 3.07, through open market purchases (provided that such purchases are at or above 100% of the principal amount thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders of Notes to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, the pro rata principal amount of Notes), in each case other than Indebtedness owed to the Issuer or an Affiliate of the Issuer, or

 

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(2) to make an investment in any one or more businesses ( provided that if such investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary), assets, or property or capital expenditures, in each case (a) used or useful in a Similar Business or (b) that replace the properties and assets that are the subject of such Asset Sale.

In the case of clause (2) of this Section 4.10(b), a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment; provided that in the event such binding commitment is later canceled or terminated for any reason before such Net Proceeds are so applied, the Issuer or such Restricted Subsidiary may satisfy its obligation as to any Net Proceeds by entering into another binding commitment within nine months of such cancellation or termination of the prior binding commitment; provided , further that the Issuer or such Restricted Subsidiary may only enter into such a commitment under the foregoing provision one time with respect to each Asset Sale. Pending the final application of any such Net Proceeds, the Issuer or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Proceeds in any manner not otherwise prohibited by this Indenture. Any Net Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in the first sentence of this Section 4.10(b) (it being understood that any portion of such Net Proceeds used to make an offer to purchase Notes, as described in clause (1) of this Section 4.10(b), shall be deemed to have been invested within the meaning of the prior sentence whether or not such offer is accepted) will be deemed to constitute “ Excess Proceeds .” When the aggregate amount of Excess Proceeds exceeds $30.0 million, the Issuer shall make an offer to all Holders of Notes (and, at the option of the Issuer, to holders of any Senior Pari Passu Indebtedness) (an “ Asset Sale Offer ”) to purchase the maximum principal amount of Notes (and such Senior Pari Passu Indebtedness), that is at least $2,000 and an integral multiple of $1,000 that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Senior Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and Additional Interest, if any (or, in respect of such Senior Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture. The Issuer will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceeds $30.0 million by mailing or electronically transmitting the notice required pursuant to the terms of this Indenture, with a copy to the Trustee. To the extent that the aggregate amount of Notes (and such Senior Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes or any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes (and such Senior Pari Passu Indebtedness) surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes (and such Senior Pari Passu Indebtedness) to be purchased in the manner described in Section 3.09. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. For purposes of this clause (b) and the preceding clause (a), the terms “Asset Sale” and “Net Proceeds” shall include any “Asset Sale” and “Net Proceeds”, respectively, as defined in the Existing Senior Cash Note Indenture as in effect immediately prior to the Issue Date.

(c) The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

Section 4.11.  Transactions with Affiliates.

 

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(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an “ Affiliate Transaction ”) involving aggregate consideration in excess of $20.0 million, unless:

(1) such Affiliate Transaction is on terms that are not materially less favorable to the Issuer or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person; and

(2) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $60.0 million, the Issuer delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of the Issuer approving such Affiliate Transaction and set forth in an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (1) of this Section 4.11(a).

(b) The provisions of Section 4.11(a) hereof shall not apply to the following:

(1) transactions between or among the Issuer and/or any of the Restricted Subsidiaries and any merger of the Issuer and any direct parent of the Issuer; provided that at the time of such merger such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of the Issuer and such merger is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose;

(2) Restricted Payments permitted by Section 4.07 hereof and the definition of “Permitted Investments”;

(3) (x) the entering into of the Management Fee Agreement (and any amendment or modification of such agreement) and the payment (whether before or after the Issue Date) of, annual management, consulting, monitoring and advisory fees to the Sponsors (A) in an aggregate amount in any fiscal year not to exceed the sum of (1) the greater of $15.0 million and 2.0% of EBITDA (as defined in the relevant agreement) for the immediately preceding year, plus out of pocket costs and expenses in connection therewith and unpaid amounts accrued for prior periods; plus (2) any deferred fees (to the extent such fees were within such amount in clause (A) (1) above originally), plus (B) 1.0% of the aggregate transaction value or enterprise value with respect to transactions in which the Sponsors provide any transaction, advisory or other services and (y) the payment of the present value of all future amounts payable pursuant to any agreement referred to in clause (3)(x) above in connection with the termination of such agreement;

(4) the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Issuer or any Restricted Subsidiary or any direct or indirect parent of the Issuer;

(5) payments by the Issuer or any of the Restricted Subsidiaries to the Sponsors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, which payments are (x) made pursuant to the Management Fee Agreement or (y) approved by a majority of the Board of Directors (or a majority of the disinterested directors serving on the Board of Directors) of the Issuer in good faith;

 

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(6) transactions in which the Issuer or any of the Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (1) of the preceding paragraph;

(7) payments or loans (or cancellation of loans) to directors, officers, employees or consultants that are approved by a majority of the Board of Directors of the Issuer in good faith;

(8) any agreement as in effect as of the Issue Date or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the Holders of the Notes in any material respect than the original agreement as in effect on the Issue Date) or any transaction contemplated thereby as determined in good faith by senior management or the Board of Directors of the Issuer;

(9) the existence of, or the performance by the Issuer or any of the Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, and any agreement described in the Offering Memorandum under the heading “Certain Relationships and Related Transactions”, and, in each case, any amendment thereto or similar agreements that it may enter into thereafter; provided, however , that the existence of, or the performance by the Issuer or any of the Restricted Subsidiaries of its obligations under, any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (9) to the extent that the terms of any such existing agreement together with all amendments thereto, taken as a whole, or any such new agreement are not otherwise more disadvantageous to the Holders of the Notes in any material respect than the original agreement as in effect on the Issue Date;

(10) the execution of the Existing Notes Exchange Offers and the issuance of the Extended Maturity Notes pursuant to the Extended Maturity Note Indentures (and any amendment or modification thereto) and Convertible Notes pursuant to the Convertible Note Indenture (and any amendment or modification thereto) and the payment of any amounts pursuant to each of the Extended Maturity Note Indentures and the Convertible Note Indenture;

(11) transactions with joint ventures, customers, clients, suppliers or purchasers or sellers of goods or services or equipment, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture, which are fair to the Issuer and the Restricted Subsidiaries in the reasonable determination of the Board of Directors or the senior management of the Issuer, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(12) transactions pursuant to any Permitted Securitization Financing;

(13) the issuance of Equity Interests (other than Disqualified Stock) of the Issuer to any Person;

(14) the issuances of securities or the making of other payments, loans (or cancellation of loans), awards or grants in cash, securities or otherwise pursuant to, or the funding of or the entering into of, employment agreements or arrangements (including severance or termination provisions), stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of the Issuer or any direct or indirect parent of the Issuer or of a Restricted Subsidiary, as appropriate, in good faith;

 

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(15) the entering into of any tax sharing agreement or arrangement and any payments permitted by clause (12) of Section 4.07(b);

(16) any contribution to the capital of the Issuer;

(17) transactions permitted by, and complying with, the provisions of Section 5.01;

(18) transactions between the Issuer or any of the Restricted Subsidiaries and any Person, a director of which is also a director of the Issuer or any direct or indirect parent of the Issuer; provided, however , that such director abstains from voting as a director of the Issuer or such direct or indirect parent, as the case may be, on any matter involving such other Person;

(19) pledges of Equity Interests of Unrestricted Subsidiaries; and

(20) intercompany transactions undertaken in good faith (as certified by a responsible financial or accounting officer of the Issuer in an Officer’s Certificate) for the purpose of improving the consolidated tax efficiency of the Issuer and its Subsidiaries and not for the purpose of circumventing any covenant set forth in this Indenture.

Section 4.12.  Liens .

The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer to exist any Lien on any asset or property of the Issuer or such Restricted Subsidiary securing Indebtedness unless the Notes or, in respect of Liens on any asset or property of a Restricted Subsidiary, any Note Guarantee of such Restricted Subsidiary, are equally and ratably secured with (or on a senior basis to, in the case of obligations subordinated in right of payment to the Notes or the Note Guarantees, as the case may be) the obligations so secured until such time as such obligations are no longer secured by a Lien. The preceding sentence shall not require the Issuer or any Restricted Subsidiary to secure the Notes if the Lien consists of a Permitted Lien. Any Lien that is granted to secure the Notes or such Note Guarantee under this Section 4.12 shall be automatically released and discharged at the same time as the release of the Lien that gave rise to the obligation to secure the Notes or such Note Guarantee under Section 4.12.

Section 4.13.  Corporate Existence.

Subject to Article 5 hereof, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence and the corporate, partnership, limited liability company or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Issuer or any such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Issuer and its Restricted Subsidiaries; provided that the Issuer shall not be required to preserve any such right, license or franchise, or the corporate, partnership, limited liability company or other existence of any of its Restricted Subsidiaries, if the Issuer in good faith shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer and its Restricted Subsidiaries, taken as a whole.

Section 4.14.  Offer to Repurchase Upon Change of Control.

(a) Upon a Change of Control, each Holder shall have the right to require the Issuer to repurchase all or any part of such Holder’s Notes at a purchase price in cash (the “ Change of Control Payment ”) equal to 101% of the principal amount thereof, plus accrued and unpaid interest and

 

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Additional Interest, if any, to the date of repurchase (subject to the right of the Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), in accordance with the terms contemplated in this Section 4.14; provided , however , that notwithstanding the occurrence of a Change of Control, the Issuer shall not be obligated to purchase any Notes pursuant to this Section 4.14 in the event that the Issuer has exercised its right to redeem such Notes in accordance with Section 3.07 of this Indenture. In the event that at the time of such Change of Control the terms of the Bank Indebtedness restrict or prohibit the repurchase of Notes pursuant to this Section 4.14, then prior to the mailing or transmission of the notice to the Holders provided for in Section 4.14(b) but in any event within 30 days following any Change of Control, the Issuer shall (i) repay in full all Bank Indebtedness or, if doing so will allow the purchase of Notes, offer to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each lender who has accepted such offer, or (ii) obtain the requisite consent under the agreements governing the Bank Indebtedness to permit the repurchase of the Notes as provided for in Section 4.14(b).

(b) Within 30 days following any Change of Control, except to the extent that the Issuer has exercised its right to redeem the Notes in accordance with Section 3.07 of this Indenture, the Issuer shall mail or electronically transmit a notice (a “ Change of Control Offer ”) to each Holder to the address of such Holder appearing in the Note Register with a copy to the Trustee, or otherwise in accordance with the procedures of DTC, with the following information:

(1) that a Change of Control has occurred and that such Holder has the right to require the Issuer to repurchase such Holder’s Notes at a repurchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase (subject to the right of Holders of record on a Record Date to receive interest on the relevant Interest Payment Date);

(2) the circumstances and relevant facts and financial information regarding such Change of Control;

(3) the repurchase price and the repurchase date, (which shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed or electronically transmitted) (the “ Change of Control Payment Date ”);

(4) that any Note not properly tendered will remain outstanding and continue to accrue interest;

(5) that unless the Issuer defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;

(6) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, to the Paying Agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(7) that Holders shall be entitled to withdraw their tendered Notes and their election to require the Issuer to purchase such Notes; provided that the Paying Agent receives, not later than the close of business on the 30th day following the date of the Change of Control notice, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder of the Notes,

 

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the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;

(8) that if the Issuer is redeeming less than all of the Notes, the Holders of the remaining Notes will be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered; the unpurchased portion of the Notes must be equal to $2,000 or an integral multiple of $1,000 in excess thereof; and

(9) the other instructions, as determined by the Issuer, consistent with this Section 4.14, that a Holder must follow in order to have its Notes purchased.

The notice, if mailed or electronically transmitted in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. If (a) the notice is mailed or electronically transmitted in a manner herein provided and (b) any Holder fails to receive such notice or a Holder receives such notice but it is defective, such Holder’s failure to receive such notice or such defect shall not affect the validity of the proceedings for the purchase of the Notes as to all other Holders that properly received such notice without defect. The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Indenture by virtue thereof.

(c) On the Change of Control Payment Date, the Issuer shall, to the extent permitted by law,

(1) accept for payment all Notes issued by it or portions thereof properly tendered pursuant to the Change of Control Offer;

(2) deposit with the Paying Agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered; and

(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Issuer.

(d) The Issuer shall not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.14 applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

(e) Notes repurchased by the Issuer pursuant to a Change of Control Offer will have the status of Notes issued but not outstanding or will be retired and canceled at the option of the Issuer. Notes purchased by a third party pursuant to the preceding clause (d) will have the status of Notes issued and outstanding.

 

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(f) Other than as specifically provided in this Section 4.14, any purchase pursuant to this Section 4.14 shall be made pursuant to the provisions of Sections 3.02, 3.05 and 3.06 hereof.

Section 4.15.  Future Note Guarantors .

The Issuer shall cause each Restricted Subsidiary that is a Domestic Subsidiary (unless such Subsidiary is already a Note Guarantor, or is a Special Purpose Securitization Subsidiary, an Insurance Subsidiary, a Qualified CFC Holding Company or a Domestic Subsidiary that is Wholly Owned by one or more Foreign Subsidiaries and created to enhance the tax efficiency of the Issuer and its Subsidiaries) that:

(a) guarantees any Indebtedness of the Issuer or any of the Note Guarantors on the Issue Date or at any time thereafter, or

(b) Incurs any Indebtedness or issues any shares of Disqualified Stock permitted to be Incurred or issued pursuant to clause (1) of Section 4.09(b), to execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit D pursuant to which such Restricted Subsidiary will become a Note Guarantor. In addition, if requested by the Trustee, such Restricted Subsidiary shall deliver to the Trustee an Opinion of Counsel to the effect that:

(1) such Note Guarantee has been duly executed and authorized; and

(2) such Note Guarantee constitutes a valid, binding and enforceable obligation of such Restricted Subsidiary, except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without limitation, all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principles of equity.

Section 4.16. Limitation on Repayments of Existing Notes .

Notwithstanding anything to the contrary herein, the Issuer shall not, and shall not permit any of its Restricted Subsidiaries to make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case, any Existing Notes of the Issuer prior to April 15, 2012, in the case of the Existing Senior Notes, and April 15, 2013, in the case of the Existing Senior Subordinated Notes; provided that the repurchase, redemption or other acquisition or retirement for value of any Existing Notes pursuant to Sections 4.10 and 4.14 of each of the Existing Senior Note Indentures and the Existing Senior Subordinated Note Indenture shall be permitted, so long as a Change of Control Offer or Asset Sale Offer, as applicable, has been made and the Notes tendered by Holders in connection with a Change of Control or Asset Sale Offer, as applicable, have been repurchased in accordance with the terms of this Indenture.

Section 4.17.  Suspension of Certain Covenants .

(a) Following the first day (the “Suspension Date”) that:

(1) the Notes have Investment Grade Ratings from both Rating Agencies, and the Issuer has delivered written notice of such Investment Grade Ratings to the Trustee, and

(2) no Default has occurred and is continuing under this Indenture,

then, beginning on that date, the Issuer and the Restricted Subsidiaries will not be subject to Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.14 and 4.15 and Section 5.01(a)(4) (collectively, the “ Suspended Covenants ”).

 

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(b) In the event that the Issuer and the Restricted Subsidiaries are not subject to the Suspended Covenants for any period of time as a result of the foregoing, and on any subsequent date (the “ Reversion Date ”) (1) one or both of the Rating Agencies withdraws their Investment Grade Rating or downgrades the rating assigned to the Notes below an Investment Grade Rating and/or (2) the Issuer or any of its Affiliates enters into an agreement to effect a transaction that would result in a Change of Control and one or more of the Rating Agencies indicate that if consummated, such transaction (alone or together with any related recapitalization or refinancing transactions) would cause such Rating Agency to withdraw its Investment Grade Rating or downgrade the ratings assigned to the Notes below an Investment Grade Rating, then the Issuer and the Restricted Subsidiaries shall thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events, including, without limitation, a proposed transaction described in clause (b)(2) above. The period of time between the Suspension Date and the Reversion Date is referred to herein as the “ Suspension Period .”

(c) Notwithstanding that the Suspended Covenants may be reinstated, no Default shall be deemed to have occurred as a result of a failure to comply with the Suspended Covenants during the Suspension Period. During any Suspension Period, the Issuer may not designate any Subsidiary as an Unrestricted Subsidiary unless the Issuer would have been permitted to designate such Subsidiary to be an Unrestricted Subsidiary if a Suspension Period had not been in effect for any period.

(d) On the Reversion Date, all Indebtedness Incurred during the Suspension Period shall be classified to have been Incurred pursuant to Section 4.09(a) or one of the clauses set forth in Section 4.09(b) (in each case, to the extent such Indebtedness would be permitted to be Incurred thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred prior to the Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness would not be so permitted to be Incurred pursuant to Section 4.09(a) or Section 4.09(b), such Indebtedness shall be deemed to have been outstanding on the Original Issue Date, so that it is classified as permitted under Section 4.09(b)(3). For purposes of Section 4.15, all Indebtedness Incurred during the Suspension Period and outstanding on the Reversion Date by any Restricted Subsidiary that is not a Note Guarantor will be deemed to have been Incurred on the Reversion Date. Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 4.07 shall be made as though Section 4.07 had been in effect since the Original Issue Date and throughout the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period shall reduce the amount available to be made as Restricted Payments under Section 4.07(a) and the items specified in clauses (1) through (6) of the definition of “Cumulative Credit” shall increase the amount available to be made as Restricted Payments under Section 4.07(a). For purposes of determining compliance with Section 4.10, on the Reversion Date, the Net Proceeds from all Asset Sales not applied in accordance with Section 4.10 shall be deemed to be reset to zero.

ARTICLE 5

SUCCESSORS

Section 5.01.  Merger, Amalgamation Consolidation or Sale of All or Substantially All Assets.

(a) The Issuer shall not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up or convert into (whether or not the Issuer is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless:

 

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(1) the Issuer is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than the Issuer) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Issuer or such Person, as the case may be, being herein called the “ Successor Company ”); provided that in the case where the surviving Person is not a corporation, a co-obligor of the Notes is a corporation;

(2) the Successor Company (if other than the Issuer) expressly assumes all the obligations of the Issuer under this Indenture and the Notes pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(3) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Company or any of the Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing;

(4) immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period (and treating any Indebtedness that becomes an obligation of the Successor Company or any of the Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), either

(A) the Successor Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a), or

(B) the Fixed Charge Coverage Ratio for the Successor Company and the Restricted Subsidiaries would be greater than or equal to such ratio for the Issuer and the Restricted Subsidiaries immediately prior to such transaction;

(5) if the Successor Company is not the Issuer, each Note Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Note Guarantee shall apply to such Person’s obligations under this Indenture and the Notes; and

(6) the Successor Company (if other than the Issuer) shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation merger or transfer and such supplemental indentures (if any) comply with this Indenture.

Notwithstanding the foregoing clauses (3) and (4) of this Section 5.01(a), (a) subject to the restrictions on Note Guarantors described in Section 5.01(b), any Restricted Subsidiary may merge, consolidate or amalgamate with or transfer all or part of its properties and assets to the Issuer or to another Restricted Subsidiary, and (b) the Issuer may merge, consolidate or amalgamate with an Affiliate incorporated solely for the purpose of reincorporating the Issuer in another state of the United States, the District of Columbia or any territory of the United States or may convert into a limited liability company (provided that a co-obligor of the Notes is a corporation), so long as the amount of Indebtedness, Disqualified Stock and Preferred Stock of the Issuer and the Restricted Subsidiaries is not increased thereby (any transaction

 

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described in this sentence a “ Specified Merger/Transfer Transaction ”). This Section 5.01 will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among the Issuer and the Restricted Subsidiaries.

(b) Subject to the provisions of Section 10.06, each Note Guarantor will not, and the Issuer will not permit any Note Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Note Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(1) either (a) such Note Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Note Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Note Guarantor or such Person, as the case may be, being herein called the “ Successor Note Guarantor ”) and the Successor Note Guarantor (if other than such Note Guarantor) expressly assumes all the obligations of such Note Guarantor under this Indenture and such Note Guarantor’s applicable Note Guarantee pursuant to a supplemental indenture or other documents or instruments in form reasonably satisfactory to the Trustee, or (b) such sale or disposition or consolidation, amalgamation or merger is not in violation of Section 4.10;

(2) the Successor Note Guarantor (if other than such Note Guarantor) shall have delivered or caused to be delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with this Indenture; and

(3) immediately after such transaction, no Default or Event of Default exists.

Notwithstanding the foregoing, (1) a Note Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating such Note Guarantor in another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness, Preferred Stock and Disqualified Stock of the Note Guarantor is not increased thereby and (2) a Note Guarantor may merge, amalgamate or consolidate with another Note Guarantor or the Issuer.

In addition, notwithstanding the foregoing, any Note Guarantor may consolidate, amalgamate or merge with or into or wind up into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a “ Transfer ”) to (x) the Issuer or any Note Guarantor or (y) any Restricted Subsidiary that is not a Note Guarantor; provided that at the time of each such Transfer pursuant to clause (y) the aggregate amount of all such Transfers since the Original Issue Date shall not exceed the greater of $625.0 million and 5.0% of Total Assets after giving effect to each such Transfer and including all Transfers occurring from and after the Original Issue Date (excluding Transfers in connection with the Merger Transactions).

(c) For purposes of this Section 5.01, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Issuer, which properties and assets, if held by the Issuer instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Issuer on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Issuer.

 

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Section 5.02.  Successor Entity Substituted.

Upon any consolidation, amalgamation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Issuer in accordance with Section 5.01(a), the Successor Company (if other than the Issuer) will succeed to, and be substituted for, the Issuer under this Indenture and the Notes, and in such event the Issuer will automatically be released and discharged from its obligations under this Indenture and the Notes, but in the case of a lease of all or substantially all of its assets, the Issuer will not be released from the obligations to pay the principal of, interest and Additional Interest, if any, on the Notes. Upon any consolidation, amalgamation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of a Note Guarantor in accordance with Section 5.01(b), the Successor Note Guarantor (if other than such Note Guarantor) will succeed to, and be substituted for, such Note Guarantor under this Indenture and such Note Guarantor’s applicable Note Guarantee, and such Note Guarantor will automatically be released and discharged from its obligations under this Indenture and such Note Guarantor’s applicable Note Guarantee, but in the case of a lease of all or substantially all of its assets, the Note Guarantor will not be released from its obligations under the Note Guarantee.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01.  Events of Default.

An “ Event of Default ” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1) a default in any payment of interest (including any Additional Interest) on any Note when the same becomes due and payable, and such default continues for a period of 30 days,

(2) there is a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise,

(3) the Issuer or any of the Restricted Subsidiaries fails to comply with its obligations under Section 5.01,

(4) the Issuer or any of the Restricted Subsidiaries fails to comply with any of its agreements in the Notes or this Indenture (other than those referred to in clause (1), (2) or (3) of this Section 6.01(a)) and such failure continues for 60 days after the notice specified below,

(5) the Issuer or any Significant Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to the Issuer or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $100.0 million or its foreign currency equivalent,

(6) the Issuer, any Restricted Subsidiary that is a Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

 

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(i) commences proceedings to be adjudicated bankrupt or insolvent;

(ii) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under applicable Bankruptcy law;

(iii) consents to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;

(iv) makes a general assignment for the benefit of its creditors; or

(v) generally is not paying its debts as they become due;

(7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief against the Issuer or any Restricted Subsidiary that is a Significant Subsidiary, in a proceeding in which the Issuer, any such Restricted Subsidiary that is a Significant Subsidiary, is to be adjudicated bankrupt or insolvent;

(ii) appoints a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or any Restricted Subsidiary that is a Significant Subsidiary, or for all or substantially all of the property of the Issuer or any Restricted Subsidiary that is a Significant Subsidiary; or

(iii) orders the liquidation of the Issuer or any Restricted Subsidiary that is a Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days; or

(8) the Issuer or any Significant Subsidiary fails to pay final judgments aggregating in excess of $100.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days following the entry thereof, or

(9) any Note Guarantee of a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms thereof) or any Note Guarantor that qualifies as a Significant Subsidiary (or one or more Note Guarantors that, taken together as of the date of the most recent audited financial statements of the Issuer, would constitute a Significant Subsidiary) denies or disaffirms its obligations under this Indenture or any Note Guarantee and such Default continues for 10 days after the notice specified below.

A Default under clause (4) above shall not constitute an Event of Default until the Trustee notifies the Issuer or the Holders of at least 25% in principal amount of the outstanding Notes notify the Issuer and the Trustee of the Default and the Issuer does not cure such Default within the time specified in clause (4) above after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a “Notice of Default.”

The Issuer shall deliver to the Trustee, within thirty (30) days after the occurrence thereof, written notice in the form of an Officer’s Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

 

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Section 6.02.  Acceleration.

(a) If an Event of Default (other than an Event of Default specified in clauses (6) or (7) of Section 6.01(a) with respect to the Issuer) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Notes, by notice to the Issuer may declare the principal of, premium, if any, and accrued but unpaid interest (including Additional Interest, if any) on all the Notes to be due and payable. Upon such a declaration, such principal and interest (including Additional Interest, if any) shall be due and payable immediately. If an Event of Default specified in clauses (6) or (7) of Section 6.01(a) with respect to the Issuer occurs, the principal of, premium, if any, and interest (including Additional Interest, if any) on all the Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

In the event of any Event of Default specified in clause (5) of Section 6.01(a), such Event of Default and all consequences thereof (excluding, however, any resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders of the Notes, if within 20 days after such Event of Default arose the Issuer delivers an Officer’s Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of the Notes as described above be annulled, waived or rescinded upon the happening of any such events.

(b) Subject to Section 6.02(a), at any time after a declaration of acceleration with respect to the Notes, the Holders of a majority in principal amount of Notes may rescind and cancel such declaration and its consequences:

(1) if the rescission would not conflict with any judgment or decree;

(2) if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration;

(3) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid; and

(4) if the Issuer has paid the Trustee its reasonable compensation and reimbursed the Trustee for its expenses, disbursements and advances.

No such rescission shall affect any subsequent Default or impair any right consequent thereto.

Section 6.03.  Other Remedies.

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

 

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Section 6.04.  Waiver of Past Defaults.

Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences hereunder, except a continuing Default in the payment of the principal of, premium, if any, Additional Interest, if any, or interest on, any Note held by a non-consenting Holder (including in connection with an Asset Sale Offer or a Change of Control Offer); provided , subject to Section 6.02 hereof, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

Section 6.05.  Control by Majority.

Subject to Sections 7.01(e), 7.02(f), 7.02(k) and 7.07, Holders of a majority in principal amount of the then total outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or that would involve the Trustee in personal liability.

Section 6.06.  Limitation on Suits.

Subject to Section 6.07 hereof, no Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:

(1) such Holder has previously given the Trustee notice that an Event of Default is continuing;

(2) Holders of at least 25% in principal amount of the total outstanding Notes have requested the Trustee to pursue the remedy;

(3) Holders of the Notes have offered the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(5) Holders of a majority in principal amount of the total outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

Section 6.07.  Rights of Holders of Notes to Receive Payment.

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, and Additional Interest, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an Asset Sale Offer or a Change of Control Offer), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 

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Section 6.08.  Collection Suit by Trustee.

If an Event of Default specified in Section 6.01(a)(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount of principal of, premium, if any, and Additional Interest, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.09.  Restoration of Rights and Remedies.

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceedings, the Issuer, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding has been instituted.

Section 6.10.  Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07 hereof, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 6.11.  Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

Section 6.12.  Trustee May File Proofs of Claim.

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Notes including Holdings and the Note Guarantors), their creditors or their property and shall be entitled and empowered to participate as a member in any official committee of creditors appointed in such matter and to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any

 

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other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.13.  Priorities.

If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:

(i) to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

(ii) to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, and Additional Interest, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and Additional Interest, if any, and interest, respectively; and

(iii) to the Issuer or to such party as a court of competent jurisdiction shall direct including Holdings or a Note Guarantor, if applicable.

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.13.

Section 6.14.  Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.14 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

ARTICLE 7

TRUSTEE

Section 7.01.  Duties of Trustee.

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of an Event of Default:

 

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(1) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

(2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved in a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and

(3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

(e) The Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of the Holders of the Notes unless the Holders have offered to the Trustee indemnity or security satisfactory to the Trustee against any loss, liability or expense.

(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

Section 7.02.  Rights of Trustee.

(a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation. Any permissive right or authority granted to the Trustee shall not be construed as a mandatory duty.

 

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(b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both subject to the other provisions of this Indenture. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer shall be sufficient if signed by an Officer of the Issuer. The Trustee shall have no duty to inquire as to the performance of the Issuer’s, Holdings’ or any Note Guarantor’s covenants herein.

(f) None of the provisions of this Indenture shall require the Trustee to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.

(g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the existence of a Default or Event of Default, the Notes and this Indenture.

(h) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

(j) In the event the Issuer is required to pay Additional Interest, the Issuer will provide written notice to the Trustee of the Issuer’s obligation to pay Additional Interest no later than 15 days prior to the next Interest Payment Date, which notice shall set forth the amount of the Additional Interest to be paid by the Issuer. The Trustee shall not at any time be under any duty or responsibility to any Holders to determine whether the Additional Interest is payable and the amount thereof.

(k) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers or duties.

(l) The Trustee may request that the Issuer deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officer’s Certificate may be signed by any person authorized to sign an Officer’s

 

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Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.

(m) The permissive rights of the Trustee enumerated herein shall not be construed as duties.

Section 7.03.  Individual Rights of Trustee.

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

Section 7.04.  Trustee’s Disclaimer.

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuer’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

Section 7.05.  Notice of Defaults.

If a Default occurs and is continuing and if it is actually known to a Trust Officer of the Trustee, the Trustee shall mail or electronically transmit to Holders of Notes a notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default relating to the payment of principal, premium, if any, or interest on any Note, the Trustee may withhold from the Holders notice of any continuing Default if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. The Trustee shall not be deemed to know of any Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee and references a Default or Event of Default.

Section 7.06.  Reports by Trustee to Holders of the Notes.

Within 60 days after each December 31, beginning with the December 31 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c).

A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Issuer and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA Section 313(d). The Issuer shall promptly notify the Trustee when the Notes are listed on any stock exchange and of any delisting thereof.

 

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Section 7.07.  Compensation and Indemnity.

The Issuer and the Note Guarantors, jointly and severally, shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as the parties shall agree in writing from time to time. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

The Issuer and the Note Guarantors, jointly and severally, shall indemnify the Trustee and any predecessor Trustee and their agents for, and hold the Trustee harmless against, any and all loss, damage, claims, liability or expense (including attorneys’ fees and including taxes (other than taxes based upon, measured by or determined by the income of the Trustee)) incurred by it in connection with the acceptance or administration of this trust and the performance of its duties hereunder (including the costs and expenses of enforcing this Indenture against the Issuer, Holdings or any of the Note Guarantors (including this Section 7.07) or defending itself against any claim whether asserted by any Holder, the Issuer, Holdings, any Note Guarantor or any other Person, or liability in connective with the acceptance, exercise or performance of any of its powers or duties hereunder). The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Trustee may have separate counsel and the Issuer shall pay the fees and expenses of such counsel. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee’s own willful misconduct, negligence or bad faith.

The obligations of the Issuer under this Section 7.07 shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee.

To secure the payment obligations of the Issuer and the Note Guarantors in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(a)(6) or (7) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

The Trustee shall comply with the provisions of TIA Section 313(b)(2) to the extent applicable.

Section 7.08.  Replacement of Trustee.

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Holders of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuer in writing. The Issuer may remove the Trustee if:

(i) the Trustee fails to comply with Section 7.10 hereof;

 

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(ii) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

(iii) a custodian or public officer takes charge of the Trustee or its property; or

(iv) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the Issuer’s expense), the Issuer or the Holders of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

Section 7.09.  Successor Trustee by Merger, etc.

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee.

Section 7.10.  Eligibility; Disqualification.

There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.

This Indenture shall always have a Trustee who satisfies the requirements of TIA Sections 310(a)(1), (2) and (5). The Trustee is subject to TIA Section 310(b); provided , however , that there shall be excluded from the operation of TIA Section 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met.

Section 7.11.  Preferential Collection of Claims Against the Issuer.

 

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The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein.

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01.  Option to Effect Legal Defeasance or Covenant Defeasance.

The Issuer may, at its option and at any time, elect to have either Section 8.02 or 8.03 hereof applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.

Section 8.02.  Legal Defeasance and Discharge.

Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Issuer, Holdings and the Note Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes, the Holdings Guarantee and the Note Guarantees on the date the conditions set forth below are satisfied (“ Legal Defeasance ”). For this purpose, Legal Defeasance means that the Issuer shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all of its other obligations under such Notes and this Indenture including that of Holdings and the Note Guarantors (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:

(a) the rights of Holders of Notes to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due, solely out of the trust created pursuant to this Indenture referred to in Section 8.04 hereof;

(b) the Issuer’s obligations with respect to Notes concerning issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(c) the rights, powers, trusts, duties and immunities of the Trustee, and the Issuer’s obligations in connection therewith; and

(d) this Section 8.02.

Subject to compliance with this Article 8, the Issuer may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

Section 8.03. Covenant Defeasance.

Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Issuer and the Note Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants contained in Sections 3.09, 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 (solely with respect to Restricted Subsidiaries), 4.14, 4.15 and 4.16 hereof, and clause (4) of Section 5.01(a), hereof with respect to the outstanding Notes on

 

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and after the date the conditions set forth in Section 8.04 hereof are satisfied (“ Covenant Defeasance ”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(a)(3) (solely with respect to clause (4) of Section 5.01(a)), 6.01(a)(4), 6.01(a)(5), 6.01(a)(6) (solely with respect to Restricted Subsidiaries that are Significant Subsidiaries), 6.01(a)(7) (solely with respect to Restricted Subsidiaries that are Significant Subsidiaries), 6.01(a)(8) and 6.01(a)(9) hereof shall not constitute Events of Default.

Section 8.04.  Conditions to Legal or Covenant Defeasance.

The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes:

In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes:

(1) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, U.S. dollar-denominated Government Obligations, or a combination thereof, in such amounts as shall be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest due on the Notes on the stated maturity date or on the date of redemption, as the case may be, of such principal, premium, if any, or interest on such Notes, and the Issuer must specify whether such Notes are being defeased to maturity or to a particular date of redemption;

(2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions,

(a) the Issuer has received from, or there has been published by, the United States Internal Revenue Service a ruling, or

(b) since the issuance of the Notes, there has been a change in the applicable U.S. federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes, as applicable, as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; provided, however , the Opinion of Counsel required with respect to a Legal Defeasance need not be delivered if all Notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one

 

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year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer;

(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to such tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under the Credit Agreement or any other material agreement or instrument (other than this Indenture) to which the Issuer or any Restricted Subsidiary is a party or by which the Issuer or any Restricted Subsidiary is bound (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith);

(6) the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that, as of the date of such opinion and subject to customary assumptions and exclusions following the deposit, the trust funds will not be subject to the effect of Section 547 of Title 11 of the United States Code;

(7) the Issuer shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Issuer with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuer, Holdings or any Note Guarantor or others; and

(8) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions), each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.

Section 8.05.  Deposited Money and Government Obligations to Be Held in Trust; Other Miscellaneous Provisions.

Subject to Section 8.06 hereof, all money and Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “ Trustee ”) pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer, Holdings or a Note Guarantor acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and Additional Interest, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.

The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or Government Obligations deposited pursuant to Section 8.04

 

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hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon the request of the Issuer any money or Government Obligations held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 8.06.  Repayment to the Issuer .

Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium and Additional Interest, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium and Additional Interest, if any, or interest has become due and payable shall be paid to the Issuer on its request or (if then held by the Issuer) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon cease.

Section 8.07. Reinstatement .

If the Trustee or Paying Agent is unable to apply any United States dollars or Government Obligations in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuer’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided that, if the Issuer makes any payment of principal of, premium and Additional Interest, if any, or interest on any Note following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01. Without Consent of Holders of Notes .

Notwithstanding Section 9.02 hereof, the Issuer, Holdings (with respect to the Holdings Guarantee or this Indenture), any Note Guarantor (with respect to its Note Guarantee or this Indenture) and the Trustee may amend or supplement this Indenture and the Notes, the Holdings Guarantee or any Note Guarantee without the consent of any Holder:

(1) to cure any ambiguity, omission, mistake, defect or inconsistency;

(2) to provide for uncertificated Notes in addition to or in place of certificated Notes; provided , however , that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code;

(3) to comply with Section 5.01 hereof;

 

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(4) to provide for the assumption of the Issuer’s, Holdings’ or any Note Guarantor’s obligations to the Holders;

(5) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under this Indenture of any such Holder;

(6) to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Issuer, Holdings or any Note Guarantor;

(7) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA;

(8) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee thereunder pursuant to the requirements thereof;

(9) to provide for the issuance of Exchange Notes or private exchange notes, which are identical to Exchange Notes except that they are not freely transferable, and for Additional Notes;

(10) to add a Note Guarantor under this Indenture;

(11) to secure the Notes, the Holdings Guarantee or any Note Guarantees;

(12) to conform the text of this Indenture, the Holdings Guarantee, Note Guarantees or the Notes to any provision of the “Description of the Extended Maturity Notes” section of the Offering Memorandum to the extent that such provision in such “Description of the Extended Maturity Notes” section was intended to be a verbatim recitation of a provision of this Indenture, Note Guarantee, the Holdings Guarantee or Notes;

(13) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including, without limitation to facilitate the issuance and administration of the Notes; provided, however , that (i) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of Holders to transfer Notes; or

(14) to make any change that does not adversely affect the rights of any Holder in any material respect.

Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Issuer, Holdings and the Note Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.

Section 9.02. With Consent of Holders of Notes .

Except as provided below in this Section 9.02, the Issuer, Holdings (with respect to the Holdings Guarantee or this Indenture), any Note Guarantor (with respect to its Note Guarantee or this

 

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Indenture) and the Trustee may amend or supplement this Indenture, any Note Guarantee, the Holdings Guarantee and the Notes with the consent of the Holders of at least a majority in principal amount of the Notes (including Additional Notes, if any) then outstanding voting as a single class (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and, subject to Sections 6.02 and 6.04 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium and Additional Interest, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Note Guarantees, the Holdings Guarantee or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) voting as a single class (including consents obtained in connection with the purchase of, or tender offer or exchange offer for, Notes). Sections 2.08 and 2.09 hereof shall determine which Notes are considered to be “outstanding” for the purposes of this Section 9.02.

Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Issuer, the Note Guarantors and Holdings in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer shall mail or electronically transmit to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to mail or electronically transmit such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

Without the consent of each affected Holder of Notes, an amendment or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):

(1) reduce the principal amount of such Notes whose Holders must consent to an amendment, supplement or waiver;

(2) reduce the principal of or change the Stated Maturity of any such Note, reduce the premium payable upon redemption or repurchase of any Note or change the time at which any Note may be redeemed under Section 3.07 hereof (other than the notice periods relating to an optional redemption of the Notes, so long as such notice periods comply with DTC’s procedures);

(3) reduce the rate of or change the time for payment of interest on any Note;

(4) waive a Default in the payment of principal of, premium, if any, or interest on the Notes, except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes with respect to a non payment default and a waiver of the payment default that resulted from such acceleration, or in respect of a covenant or provision contained in this Indenture or any Note Guarantee that cannot be amended or modified without the consent of all Holders;

 

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(5) make any Note payable in money other than that stated therein;

(6) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of, premium, if any, or interest on the Notes;

(7) make any change in these amendment and waiver provisions;

(8) impair the right of any Holder to receive payment of principal of, premium, if any, or interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes;

(9) expressly subordinate the Notes or any Note Guarantees to any other Indebtedness of the Issuer or any Note Guarantor; or

(10) except as expressly permitted by this Indenture, modify the Note Guarantees of any Significant Subsidiary or any group of Restricted Subsidiaries that, taken together as of the date of the amendment or waiver, would constitute a Significant Subsidiary in any manner adverse to the Holders of the Notes.

Section 9.03. Compliance with TIA .

Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies with the TIA as then in effect.

Section 9.04. Revocation and Effect of Consents .

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement, or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date unless the consent of the requisite number of Holders has been obtained.

Section 9.05. Notation on or Exchange of Notes .

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

 

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Section 9.06. Trustee to Sign Amendments, etc.

The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Issuer may not sign an amendment, supplement or waiver until its board of directors approves it. In executing any amendment, supplement or waiver, the Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 14.04 hereof, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer, Holdings and any Note Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03).

ARTICLE 10

NOTE GUARANTEES

Section 10.01. Note Guarantee .

Subject to this Article 10, each of the Note Guarantors hereby, jointly and severally irrevocably and unconditionally guarantees, on an unsecured senior basis, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that: (a) the principal of and interest, premium and Additional Interest, if any, on the Notes shall be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder whether for payment of principal of, premium, if any, or interest and Additional Interest, if any, on the Notes and all other monetary obligations of the Issuer under this Indenture and the Notes shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, each Note Guarantor, together with Holdings as described in Article 11, shall be jointly and severally with each other Note Guarantor and with Holdings, obligated to pay the same immediately. Each Note Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

The Note Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, the Holdings Guarantee, any Note Guarantee or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, Holdings or any Note Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Note Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.

 

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Each Note Guarantor also agrees to pay, in addition to the amount stated above, any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 10.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, Holdings, the Note Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer, Holdings or the Note Guarantors, any amount paid either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Each Note Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Note Guarantor further agrees that, as between the Note Guarantors and Holdings, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Note Guarantors for the purpose of this Note Guarantee. The Note Guarantors shall have the right to seek contribution from any non-paying Note Guarantor or Holdings so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantees.

Each Note Guarantee will be a continuing guarantee and shall:

(1) remain in full force and effect until payment in full of all the applicable guaranteed obligations;

(2) subject to the next succeeding paragraph, be binding upon each such Note Guarantor and its successors; and

(3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

Each Note Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer, Holdings or any Note Guarantor for liquidation or reorganization, should the Issuer, Holdings or any Note Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s, Holdings’ or any other Note Guarantor’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, the Holdings Guarantee or Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

In case any provision of any Note Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

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The Note Guarantee issued by any Note Guarantor shall be a general unsecured senior obligation of such Note Guarantor and shall be pari passu in right of payment with all existing and future Senior Pari Passu Indebtedness of such Note Guarantor, if any.

Each payment to be made by a Note Guarantor in respect of its Note Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

Section 10.02. Limitation on Note Guarantor Liability .

Each Note Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Note Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders, Holdings and the Note Guarantors hereby irrevocably agree that the obligations of each Note Guarantor shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Note Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Note Guarantor or Holdings in respect of the obligations of such other Note Guarantor or Holdings under this Article 10 or Holdings under Article 11, result in the obligations of such Note Guarantor under its Note Guarantee not being voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. Each Note Guarantor that makes a payment under its Note Guarantee shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each other Note Guarantor and Holdings in an amount equal to such other Note Guarantor’s or Holdings’ pro rata portion of such payment based on the respective net assets of all the Note Guarantors and Holdings at the time of such payment determined in accordance with GAAP.

Section 10.03. Execution and Delivery .

To evidence its Note Guarantee set forth in Section 10.01 hereof, each Note Guarantor hereby agrees that this Indenture shall be executed on behalf of such Note Guarantor by its Chairman, President, its Chief Financial Officer, its Treasurer, its Assistant Treasurer, one of its Vice Presidents or one of its Assistant Vice Presidents.

Each Note Guarantor hereby agrees that its Note Guarantee set forth in Section 10.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Note Guarantee on the Notes.

If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Note Guarantee shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Note Guarantors.

If required by Section 4.15 hereof, the Issuer shall cause any newly created or acquired Restricted Subsidiary to comply with the provisions of Section 4.15 hereof and this Article 10, to the extent applicable.

Section 10.04. Subrogation .

 

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Each Note Guarantor shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by such Note Guarantor pursuant to the provisions of Section 10.01 hereof; provided that, if an Event of Default has occurred and is continuing, no Note Guarantor shall be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.

Section 10.05. Benefits Acknowledged .

Each Note Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to its Note Guarantee are knowingly made in contemplation of such benefits.

Section 10.06. Release of Note Guarantees .

A Note Guarantee by a Note Guarantor shall be automatically and unconditionally released and discharged, and no further action by such Note Guarantor, the Issuer or the Trustee is required for the release of such Note Guarantor’s Note Guarantee, upon:

(1) (a) the sale, disposition or other transfer (including through merger or consolidation) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Note Guarantor is no longer a Restricted Subsidiary), of the applicable Note Guarantor if such sale, disposition or other transfer is made in compliance with the applicable provisions of this Indenture;

(b) the Issuer designating such Note Guarantor to be an Unrestricted Subsidiary in accordance with the provisions set forth under Section 4.07 and the definition of “Unrestricted Subsidiary”;

(c) the release or discharge of such Restricted Subsidiary from (x) its guarantee of Indebtedness under the Credit Agreement (including by reason of the termination of the Credit Agreement) and/or (y) the guarantee of Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer or such Restricted Subsidiary or the repayment of the Indebtedness or Disqualified Stock (except in each case a discharge or release by or as a result of payment under such guarantee) that resulted in the obligation to guarantee the Notes, in the case of each of clauses (x) and (y) if such Note Guarantor would not then otherwise be required to guarantee the Notes pursuant to this Indenture; provided, that if such Person has incurred any Indebtedness or issued any Disqualified Stock in reliance on its status as a Note Guarantor under Section 4.09, such Note Guarantor’s obligations under such Indebtedness or Disqualified Stock, as the case may be, so Incurred are satisfied in full and discharged or are otherwise permitted to be Incurred under Section 4.09; or

(d) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 hereof or the Issuer’s obligations under this Indenture being discharged in accordance with the terms of this Indenture; and

(2) in the case of clause (1)(a) above, the release of such Note Guarantor from its guarantee, if any, of, and all pledges and security, if any, granted in connection with, the Credit Agreement and any other Indebtedness of the Issuer or any Restricted Subsidiary.

In addition, a Note Guarantee will be automatically released upon the applicable Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest securing Bank Indebtedness or other exercise of remedies in respect thereof.

 

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Section 10.07. Securitization Acknowledgement .

(a) For purposes of this Section 10.07, capitalized terms used herein and not otherwise defined herein (unless there shall be a conflict between a term used in this Section 10.07(a) and a term used elsewhere in this Indenture, in which case the term as defined in this Section 10.07(a) shall control solely for purposes of this Section 10.07(a)) shall have the meanings assigned to such terms in the Transfer and Servicing Agreement, or, if not defined therein, as assigned to such terms in the Purchase Agreement or the Receivables Purchase Agreement referred to therein. Subsequent references in this Section 10.07(a) to Apple Ridge Services Corporation (“ ARSC ”), Cartus Corporation (“ Cartus ”) and Cartus Financial Corporation (“ CFC ”) below shall mean and be references to such corporations as they existed as of the Original Issue Date but shall also include references to any limited liability companies which succeed to the assets and liabilities of such companies in connection with a conversion of any such corporation into a limited liability company.

Holders by their acceptance of Notes entitled to the benefits of this Indenture acknowledge and agree, as follows (which acknowledgement and agreement are part of the consideration for the issuance of the Notes):

(i) Each Holder hereby acknowledges that (A) CFC is a limited purpose corporation whose primary activities are restricted in its certificate of incorporation to purchasing Cartus Purchased Assets (originally referred to as CMSC Purchased Assets) from Cartus pursuant to the Purchase Agreement, making Equity Payments, Equity Loans, Mortgage Payoffs and Mortgage Payments to or on behalf of employees or otherwise purchasing Homes in connection with the Pool Relocation Management Agreements, funding such activities through the sale of CFC Receivables (originally referred to as CMF Receivables) to ARSC, and such other activities as it deems necessary or appropriate in connection therewith, (B) ARSC is a limited purpose corporation whose primary activities are restricted in its certificate of incorporation to purchasing from CFC all CFC Receivables acquired by CFC from Cartus or otherwise originated by CFC, funding such acquisitions through the sale of the CFC Receivables to Apple Ridge Funding LLC (“ ARF ”) and such other activities as it deems necessary or appropriate to carry out such activities, and (C) ARF is a limited purpose limited liability company whose activities are limited in its limited liability company agreement to purchasing the Pool Receivables from ARSC, funding such acquisitions through the issuance of the Notes, pledging such Pool Receivables to The Bank of New York Mellon (formerly known as The Bank of New York) (the “ Indenture Trustee ”) and such other activities as it deems necessary or appropriate to carry out such activities.

(ii) Each Holder hereby acknowledges and agrees that (A) the foregoing transfers are intended to be true and absolute sales as a result of which Cartus has no right, title and interest in and to any of the Cartus Purchased Assets, any Homes acquired by CFC in connection therewith or any CFC Receivables, including any Related Property relating thereto, any proceeds thereof or earnings thereon (collectively, the “ Pool Assets ”), (B) none of CFC, ARSC or ARF is a Loan Party, (C) such Holder is not a creditor of, and has no recourse to, CFC, ARSC or ARF pursuant to the Credit Agreement or any other Loan Document, and (D) such Holder has no lien on or claim, contractual or otherwise, arising under the Credit Agreement or any other Loan Document to the Pool Assets (whether now existing or hereafter acquired and whether tangible or intangible); provided that nothing herein shall limit any rights the Secured Parties may have to any proceeds or earnings which are transferred from time to time to Cartus by CFC, ARSC or ARF.

(iii) No Holder will institute against or join any other person in instituting against CFC, ARSC or ARF any insolvency proceeding, or solicit, join in soliciting, cooperate with or

 

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encourage any motion in support of, any insolvency proceeding involving CFC, ARSC or ARF until one year and one day after the payment in full of all Notes; provided that the foregoing shall not limit the right of any Holder to file any claim in or otherwise take any action (not inconsistent with the provisions of this Section 10.07(a)) permitted or required by applicable law with respect to any insolvency proceeding instituted against CFC, ARSC or ARF by any other person.

(iv) Without limiting the foregoing, in the event of any voluntary or involuntary bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any Federal or state bankruptcy or similar law involving Cartus, CFC, ARSC, ARF or any other Affiliates of Cartus as debtor, or otherwise, the Secured Parties agree that if, notwithstanding the intent of the parties, Cartus is found to have a property interest in the Pool Assets, then, in such event, CFC and its assigns, including the Indenture Trustee, shall have a first and prior claim to the Pool Assets, and any claim or rights the Secured Parties may have to the Pool Assets, contractual or otherwise, shall be subject to the prior claims of the Indenture Trustee and the Noteholders until all amounts owing under the Indenture shall have been paid in full, and the Secured Parties agree to turn over to the Indenture Trustee any amounts received contrary to the provisions of this clause (iv).

(v) Each Holder hereby covenants and agrees that it will not agree to any amendment, supplement or other modification of this Section 10.07(a) without the prior written consent of the Indenture Trustee. Each Holder further agrees that the provisions of this Section 10.07(a) are made for the benefit of, and may be relied upon and enforced by, the Indenture Trustee and that the Indenture Trustee shall be a third party beneficiary of this Section 10.07(a).

ARTICLE 11

HOLDINGS GUARANTEE

Section 11.01. Holdings Guarantee .

Subject to this Article 11, Holdings hereby, jointly and severally with the Note Guarantors, irrevocably and unconditionally guarantees, on an unsecured senior subordinated basis, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that: (a) the principal of and interest, premium and Additional Interest, if any, on the Notes shall be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder whether for payment of principal of, premium, if any, or interest or Additional Interest, if any, on the Notes and all other monetary obligations of the Issuer under this Indenture and the Notes shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, Holdings, together with the Note Guarantors as described in Article 10, shall be jointly and severally obligated to pay the same immediately. Holdings agrees that this is a guarantee of payment and not a guarantee of collection.

Holdings hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, this Indenture or any Note Guarantee, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any

 

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provisions hereof or thereof, the recovery of any judgment against the Issuer, Holdings or any Note Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Holdings hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Holdings Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.

Holdings also agrees to pay, in addition to the amount stated above, any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 11.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, Holdings, the Note Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer, Holdings or the Note Guarantors, any amount paid either to the Trustee or such Holder, this Holdings Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Holdings agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Holdings further agrees that, as between Holdings and the Note Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Holdings Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by Holdings for the purpose of this Holdings Guarantee. Holdings shall have the right to seek contribution from any non-paying Note Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantees.

This Holdings Guarantee will be a continuing guarantee and shall:

(1) remain in full force and effect until payment in full of all the applicable guaranteed obligations;

(2) subject to the next succeeding paragraph, be binding upon Holdings and its successors; and

(3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

This Holdings Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer, Holdings or any Note Guarantor for liquidation or reorganization, should the Issuer, Holdings or any Note Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s, Holdings’ or any Note Guarantor’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, the Holdings Guarantee or Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be

 

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reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

In case any provision of this Holdings Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

This Holdings Guarantee shall be a general unsecured senior subordinated obligation of Holdings and shall be subordinated in right of payment to all existing and future Holdings Senior Indebtedness, if any.

Each payment to be made by Holdings in respect of its Holdings Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

Section 11.02. Limitation on Holdings Liability .

Holdings, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Holdings Guarantee of Holdings not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to this Holdings Guarantee. To effectuate the foregoing intention, the Trustee, the Holders, the Note Guarantors and Holdings hereby irrevocably agree that the obligations of Holdings shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of Holdings that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of Holdings or any of the Note Guarantors in respect of the obligations of Holdings under this Article 11 or the Note Guarantors under Article 10, result in the obligations of Holdings under this Holdings Guarantee not being voidable under applicable law relating to a fraudulent conveyance or fraudulent transfer or similar law affecting the rights of creditors generally. If Holdings makes a payment under this Holdings Guarantee, then Holdings shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each Note Guarantor in an amount equal to such Note Guarantor’s pro rata portion of such payment based on the respective net assets of Holdings and each of the Note Guarantors at the time of such payment determined in accordance with GAAP.

Section 11.03. Execution and Delivery .

To evidence the Holdings Guarantee set forth in Section 11.01 hereof, Holdings hereby agrees that this Indenture shall be executed on behalf of Holdings by its Chairman, President, its Chief Financial Officer, its Treasurer, its Assistant Treasurer, one of its Vice Presidents or one of its Assistant Vice Presidents.

Holdings hereby agrees that the Holdings Guarantee set forth in Section 11.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Holdings Guarantee on the Notes.

If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Holdings Guarantee shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Holdings Guarantee set forth in this Indenture on behalf of Holdings.

Section 11.04. Subrogation .

 

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Holdings shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by Holdings pursuant to the provisions of Section 11.01 hereof; provided that, if an Event of Default has occurred and is continuing, Holdings shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.

Section 11.05. Benefits Acknowledged .

Holdings acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to this Holdings Guarantee are knowingly made in contemplation of such benefits.

Section 11.06. Release of Holdings Guarantee .

This Holdings Guarantee shall be automatically and unconditionally released and discharged, and no further action by Holdings, the Issuer, the Note Guarantors or the Trustee is required for the release of this Holdings Guarantee, upon:

(a) the Issuer ceasing to be a Subsidiary of Holdings; provided that any such transaction occurs in compliance with the provisions of this Indenture; or

(b) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 hereof or the Issuer’s obligations under this Indenture being discharged in accordance with the terms of this Indenture.

ARTICLE 12

SUBORDINATION OF HOLDINGS GUARANTEE

Section 12.01. Agreement To Subordinate .

Holdings agrees, and each Holder by accepting a Note agrees, that the obligations of Holdings under its Holdings Guarantee are subordinated in all respects, including right of payment, to the extent and in the manner provided in this Article 12, to the prior payment in full of all future Holdings Senior Indebtedness and that the subordination is for the benefit of and enforceable by the holders of such Holdings Senior Indebtedness. Holdings’ obligations under its Holdings Guarantee shall in all respects rank pari passu in right of payment with all existing and future Holdings Pari Passu Indebtedness and will be senior in right of payment to all existing and future Holdings Subordinated Indebtedness; and only Indebtedness of Holdings that is Holdings Senior Indebtedness shall rank senior to the obligations of Holdings under its Holdings Guarantee in accordance with the provisions set forth herein. All provisions of this Article 12 shall be subject to Section 12.12.

Section 12.02. Liquidation, Dissolution, Bankruptcy .

Upon any payment or distribution of the assets of Holdings to creditors upon a total or partial liquidation or a total or partial dissolution of Holdings or in a reorganization of or similar proceeding relating to Holdings or its property:

(1) the holders of Holdings Senior Indebtedness shall be entitled to receive payment in full in cash of such Holdings Senior Indebtedness (including interest accruing after, or which would accrue but for, the commencement of any such proceeding at the rate specified in the applicable Holdings

 

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Senior Indebtedness, whether or not a claim for such interest would be allowed) before Holders of the Notes shall be entitled to receive any payment; and

(2) until the Holdings Senior Indebtedness is paid in full in cash, any payment or distribution to which Holders of the Notes would be entitled but for the subordination provisions of this Article 12 shall be made to holders of such Holdings Senior Indebtedness as their interests may appear, except that Holders of the Notes may receive and retain (x) so long as the Holders are not in the same or a higher class of creditors in such liquidation, dissolution or proceeding as the holders of the Holdings Senior Indebtedness, shares of stock and any debt securities that are subordinated to Holdings Senior Indebtedness to at least the same extent as the Holdings Guarantee (such stock and debt securities referred to herein as “ Holdings Permitted Junior Securities ”) and (y) payments or deposits made pursuant to Article 8 or Article 13 so long as, on the date or dates the respective amounts were paid into the trust, such payments were made with respect to the Notes without violating the subordination provisions described herein; and

(3) if a distribution is made to Holders of the Notes that, due to the subordination provisions, should not have been made to them, such Holders of the Notes are required to hold it in trust for the holders of Holdings Senior Indebtedness and pay it over to them as their interests may appear.

Section 12.03. Default on Holdings Senior Indebtedness .

Holdings shall not make any payment pursuant to its Holdings Guarantee (or pay any other Obligations relating to its Holdings Guarantee, including Additional Interest, fees, costs, expenses, indemnities and rescission or damage claims) and may not purchase, redeem or otherwise retire any Notes (collectively, “ pay its Holdings Guarantee ”) (except that Holders of the Notes may receive and retain (x) Holdings Permitted Junior Securities and (y) payments or deposits made pursuant to Article 8 or Article 13), if either of the following occurs (a “ Holdings Payment Default ”):

(1) a default in the payment of the principal of, premium, if any, or interest on any Holdings Senior Indebtedness occurs and is continuing or any other amount owing in respect of any Holdings Senior Indebtedness is not paid when due, or

(2) any other default on Holdings Senior Indebtedness occurs and the maturity of such Holdings Senior Indebtedness is accelerated in accordance with its terms,

unless, in either case, the Holdings Payment Default has been cured or waived and any such acceleration has been rescinded or such Holdings Senior Indebtedness has been paid in full in cash; provided , however , that Holdings shall be entitled to pay its Holdings Guarantee without regard to the foregoing if Holdings and the Trustee receive written notice approving such payment from the Holdings Representatives of all Holdings Senior Indebtedness with respect to which the Holdings Payment Default has occurred and is continuing.

During the continuance of any default (other than a Holdings Payment Default) (a “ Holdings Non-Payment Default ”) with respect to any Holdings Senior Indebtedness pursuant to which the maturity thereof may be accelerated without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, Holdings shall not pay its Holdings Guarantee (except in the form of Holdings Permitted Junior Securities) for a period (a “ Holdings Guarantee Payment Blockage Period ”) commencing upon the receipt by the Trustee (with a copy to Holdings and the Issuer) of written notice (a “ Holdings Guarantee Blockage Notice ”) of such Holdings Non-Payment Default from the Holdings Representative of such Holdings Senior Indebtedness specifying an election to effect a Holdings Guarantee Payment Blockage Period and ending 179 days thereafter unless earlier terminated as provided below. The Holdings Guarantee Payment Blockage

 

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Period shall end earlier if such Holdings Guarantee Payment Blockage Period is terminated (i) by written notice to the Trustee, Holdings and the Issuer from the Person or Persons who gave such Holdings Guarantee Blockage Notice; (ii) because the default giving rise to such Holdings Guarantee Blockage Notice is cured, waived or otherwise no longer continuing; or (iii) because such Holdings Senior Indebtedness has been repaid in full in cash.

Notwithstanding the provisions described in the immediately preceding paragraph (but subject to the provisions contained in the first paragraph of this Section 12.03 and Section 12.02 hereof), unless the holders of such Holdings Senior Indebtedness or the Holdings Representative of such Holdings Senior Indebtedness shall have accelerated the maturity of such Holdings Senior Indebtedness or a Holdings Payment Default exists, Holdings shall be permitted to resume paying its Holdings Guarantee after the end of such Holdings Guarantee Payment Blockage Period. Holdings shall not be subject to more than one Holdings Guarantee Payment Blockage Period in any consecutive 360-day period, irrespective of the number of defaults with respect to Holdings Senior Indebtedness during such period. However, in no event shall the total number of days during which any Holdings Guarantee Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate during any consecutive 360-day period. Notwithstanding the foregoing, however, no default that existed or was continuing on the date of delivery of any Holdings Guarantee Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Holdings Guarantee Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenants during the period after the date of delivery of a Holdings Guarantee Blockage Notice, that, in either case, would give rise to a Holdings Non-Payment Default pursuant to any provisions of the Holdings Senior Indebtedness under which a Holdings Non-Payment Default previously existed or was continuing shall constitute a new Holdings Non-Payment Default for this purpose).

Section 12.04. Demand for Payment .

If payment of the Notes is accelerated because of an Event of Default and a demand for payment is made on Holdings pursuant to Article 11 hereof, the Issuer, the Trustee or Holdings shall promptly notify the holders of the Holdings Senior Indebtedness or the Holdings Representative of such Holdings Senior Indebtedness of such demand; provided that any failure to give such notice shall have no effect whatsoever on the provisions of this Article 12. If any Holdings Senior Indebtedness is outstanding, Holdings may not pay its Holdings Guarantee until five Business Days after the Holdings Representatives of all such Holdings Senior Indebtedness receive notice of such acceleration and, thereafter, may pay its Holdings Guarantee only if this Indenture otherwise permits payment at that time.

Section 12.05. When Distribution Must Be Paid Over .

If a distribution is made to Holders that, due to the subordination provisions, should not have been made to them, such Holders are required to hold it in trust for the holders of Holdings Senior Indebtedness and pay it over to them as their interests may appear.

Section 12.06. Subrogation .

After all Holdings Senior Indebtedness is paid in full and until the Notes are paid in full, Holders shall be subrogated to the rights of holders of such Holdings Senior Indebtedness to receive distributions applicable to such Holdings Senior Indebtedness. A distribution made under this Article 12 to holders of such Holdings Senior Indebtedness which otherwise would have been made to Holders is not, as between Holdings and Holders, a payment by Holdings on such Holdings Senior Indebtedness.

Section 12.07. Relative Rights .

 

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This Article 12 defines the relative rights of Holders and holders of Holdings Senior Indebtedness. Nothing in this Indenture shall:

(1) impair, as between Holdings and Holders, the obligation of Holdings, which is absolute and unconditional, to make payments under its Holdings Guarantee in accordance with its terms;

(2) prevent the Trustee or any Holder from exercising its available remedies upon a default by Holdings under its obligations with respect to its Holdings Guarantee, subject to the rights of holders of Holdings Senior Indebtedness to receive payments or distributions otherwise payable to Holders and such other rights of such holders of Holdings Senior Indebtedness as set forth herein; or

(3) affect the relative rights of Holders and creditors of Holdings other than their rights in relation to holders of Holdings Senior Indebtedness.

Section 12.08. Subordination May Not Be Impaired by Holdings .

No right of any holder of Holdings Senior Indebtedness to enforce the subordination of the obligations of Holdings under its Holdings Guarantee shall be impaired by any act or failure to act by Holdings or by its failure to comply with this Indenture.

Section 12.09. Rights of Trustee and Paying Agent .

Notwithstanding Section 12.03 hereof, the Trustee or any Paying Agent may continue to make payments on the Notes and shall not be charged with knowledge of the existence of facts that would prohibit the making of any payments unless, not less than three Business Days prior to the date of such payment, a Trust Officer at the Corporate Trust Office of the Trustee receives notice satisfactory to him that payments may not be made under this Article 12; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 7.01, shall be entitled in all respects to assume that no such facts exist; provided , however , that if a Trust Officer of the Trustee shall not have received, at least three Business Days prior to the date upon which by the terms hereof any such money may become payable for any purpose (including, without limitation, the payment of principal, premium, if any, interest, Additional Interest, the redemption price or the Change of Control Payment, as the case may be, in respect of any Note), the notice with respect to such money provided for in this Section 12.09 then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within three Business Days prior to such date. Holdings, a Holdings Representative, a holder of Holdings Senior Indebtedness or any trustee of or agent thereof shall be entitled to give the notice; provided , however , that, if an issue of Holdings Senior Indebtedness has a Holdings Representative, only the Holdings Representative shall be entitled to give the notice.

The Trustee in its individual or any other capacity shall be entitled to hold Holdings Senior Indebtedness with the same rights it would have if it were not Trustee. The Registrar and the Paying Agent shall be entitled to do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article 12 with respect to any Holdings Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of such Holdings Senior Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing in this Article 12 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof or any other Section of this Indenture.

 

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Section 12.10. Distribution or Notice to Holdings Representative .

Whenever a distribution is to be made or a notice given to holders of Holdings Senior Indebtedness the distribution may be made and the notice given to their Holdings Representative (if any).

Section 12.11. Article 12 Not To Prevent Events of Default or Limit Right To Demand Payment .

The failure of Holdings to make a payment pursuant to the Holdings Guarantee by reason of any provision in this Article 12 shall not be construed as preventing a Default. Nothing in this Article 12 shall have any effect on the right of the Holders or the Trustee to accelerate the maturity of the Notes.

Section 12.12. Trust Moneys Not Subordinated .

Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of Government Obligations held in trust by the Trustee for the payment of principal of and interest on the Notes pursuant to Article 8 or Article 13 hereof shall not be subordinated to the prior payment of any Holdings Senior Indebtedness or subject to the restrictions set forth in this Article 12, and none of the Holders shall be obligated to pay over any such amount to Holdings or any holder of Holdings Senior Indebtedness or any other creditor of Holdings, provided that the subordination provisions of this Article 12 were not violated at the time the applicable amounts were deposited in trust pursuant to Article 8 or Article 13 hereof, as the case may be.

Section 12.13. Trustee Entitled To Rely .

Upon any payment or distribution pursuant to this Article 12, the Trustee and the Holders shall be entitled to conclusively rely (a) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 12.02 hereof are pending, (b) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (c) upon the Holdings Representatives of Holdings Senior Indebtedness for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of such Holdings Senior Indebtedness and other Indebtedness of Holdings, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 12. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Holdings Senior Indebtedness to participate in any payment or distribution pursuant to this Article 12, the Trustee shall be entitled to request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Holdings Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article 12, and, if such evidence is not furnished, the Trustee shall be entitled to defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 hereof shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article 12.

Section 12.14. Trustee To Effectuate Subordination .

A Holder by its acceptance of a Note agrees to be bound by this Article 12 and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be necessary or appropriate to effectuate the subordination between the Holders and the holders of Holdings Senior Indebtedness as provided in this Article 12 and appoints the Trustee as attorney-in-fact for any and all such purposes.

 

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Section 12.15. Trustee Not Fiduciary for Holders of Holdings Senior Indebtedness .

The Trustee shall not be deemed to owe any fiduciary duty to the holders of Holdings Senior Indebtedness and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders or Holdings or any other Person, money or assets to which any holders of Holdings Senior Indebtedness shall be entitled by virtue of this Article 12 or otherwise.

Section 12.16. Reliance by Holders of Holdings Senior Indebtedness on Subordination Provisions .

Each Holder by accepting a Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Holdings Senior Indebtedness whether such Holdings Senior Indebtedness was created or acquired before or after the issuance of the Notes, to acquire and continue to hold, or to continue to hold, such Holdings Senior Indebtedness and such holder of such Holdings Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Holdings Senior Indebtedness.

Without in any way limiting the generality of the foregoing paragraph, the holders of Holdings Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Trustee or the Holders and without impairing or releasing the subordination provided in this Article 12 or the obligations hereunder of the Holders to the holders of the Holdings Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Holdings Senior Indebtedness, or otherwise amend or supplement in any manner Holdings Senior Indebtedness, or any instrument evidencing the same or any agreement under which Holdings Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Holdings Senior Indebtedness; (iii) release any Person liable in any manner for the payment or collection of Holdings Senior Indebtedness; and (iv) exercise or refrain from exercising any rights against Holdings and any other Person.

ARTICLE 13

SATISFACTION AND DISCHARGE

Section 13.01. Satisfaction and Discharge .

(a) This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights of transfer or exchange of Notes, as expressly provided for in this Indenture) as to all outstanding Notes when either: (i) all Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust) have been delivered to the Trustee for cancellation; or (ii) all Notes (a) have become due and payable, (b) will become due and payable at their Stated Maturity within one year or (c) if redeemable at the option of the Issuer, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer has irrevocably deposited or caused to be deposited with the Trustee, as trust funds in trust solely for the benefit of the Holders of the Notes, cash in U.S. dollars, U.S. dollar Government Obligations, or a combination thereof, in such amounts as will be sufficient in the written opinion of a firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Dollar-denominated Government Obligations have been so deposited) without

 

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consideration of any reinvestment of interest to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal of, premium, if any, and accrued interest on the Notes to the date of deposit together with irrevocable instructions from the Issuer directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

(b) the Issuer, Holdings and/or the Note Guarantors have paid or caused to be paid all other sums payable under this Indenture; and

(c) the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, if money shall have been deposited with the Trustee pursuant to sub-clause (ii) of clause (a) of this Section 13.01, the provisions of Section 13.02 and Section 8.06 shall survive.

Section 13.02. Application of Trust Money .

Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 13.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium and Additional Interest, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

If the Trustee or Paying Agent is unable to apply any money or Government Obligations in accordance with Section 13.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer’s, Holdings’ and any Note Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 13.01 hereof; provided that if the Issuer has made any payment of principal of, premium and Additional Interest, if any, or interest on any Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Obligations held by the Trustee or Paying Agent.

ARTICLE 14

MISCELLANEOUS

Section 14.01. TIA Controls .

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA Section 318(c), the imposed duties shall control.

Section 14.02. Notices .

Any notice or communication by the Issuer, Holdings, any Note Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), fax or overnight air courier guaranteeing next day delivery, to the others’ addresses:

 

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If to the Issuer and/or Holdings and/or any Note Guarantor:

c/o Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

If to the Trustee:

The Bank of New York Mellon Trust Company, N.A.

525 William Penn Place, 38 th Floor

Pittsburgh, Pennsylvania 15259

Fax No.: (412) 234-7535

Attention: Corporate Trust Administration

The Issuer, Holdings, any Note Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five calendar days after being deposited in the mail, postage prepaid, if mailed by first-class mail; when receipt acknowledged, if faxed; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery; provided that any notice or communication delivered to the Trustee shall be deemed effective upon actual receipt thereof.

Any notice or communication to a Holder shall be mailed by first-class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar or by other electronic means or such other delivery system as the Trustee agrees to accept. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

If the Issuer mails a notice or communication to Holders, they shall mail a copy to the Trustee and each Agent at the same time.

The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods. If the party elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

 

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Notwithstanding anything to the contrary contained herein, as long as the Notes are in the form of a Global Note, notice to the Holders may be made electronically in accordance with procedures of the Depositary.

Section 14.03. Communication by Holders of Notes with Other Holders of Notes .

Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).

Section 14.04. Certificate and Opinion as to Conditions Precedent .

Upon any request or application by the Issuer, Holdings or any of the Note Guarantors to the Trustee to take any action under this Indenture, the Issuer, Holdings or such Note Guarantor, as the case may be, shall furnish to the Trustee:

(i) An Officer’s Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 14.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(ii) An Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 14.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

Section 14.05. Statements Required in Certificate or Opinion .

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to Section 4.04 hereof or TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include:

(i) a statement that the Person making such certificate or opinion has read such covenant or condition;

(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(iii) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may be limited to reliance on an Officer’s Certificate as to matters of fact); and

(iv) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

Section 14.06. Rules by Trustee and Agents .

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

 

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Section 14.07. No Personal Liability of Directors, Officers, Employees and Stockholders .

No director, officer, employee, manager, incorporator or holder of any Equity Interest of the Issuer, Holdings or any Note Guarantor or any direct or indirect parent corporation, as such, shall have any liability for any obligations of the Issuer, Holdings or the Note Guarantors under the Notes, the Holdings Guarantee, the Note Guarantees or this Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

Section 14.08. Governing Law .

THIS INDENTURE, THE NOTES, THE HOLDINGS GUARANTEE AND ANY NOTE GUARANTEE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 14.09. Waiver of Jury Trial .

EACH OF THE ISSUER, HOLDINGS, THE NOTE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES, THE HOLDINGS GUARANTEE, THE NOTE GUARANTEES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 14.10. Force Majeure .

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused by, directly or indirectly, forces beyond its reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services.

Section 14.11. No Adverse Interpretation of Other Agreements .

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuer or its Restricted Subsidiaries, Holdings or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 14.12. Successors .

All agreements of the Issuer in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of Holdings and each Note Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 10.06 and Section 11.06 hereof.

Section 14.13. Severability .

In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

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Section 14.14. Counterpart Originals .

The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

Section 14.15. Table of Contents, Headings, etc.

The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

Section 14.16. Qualification of Indenture.

The Issuer, Holdings and the Note Guarantors shall qualify this Indenture under the TIA in accordance with the terms and conditions of the Registration Rights Agreement and shall pay all reasonable costs and expenses (including attorneys’ fees and expenses for the Issuer, Holdings, the Note Guarantors and the Trustee) incurred in connection therewith, including, but not limited to, costs and expenses of qualification of this Indenture and the Notes and printing this Indenture and the Notes. The Trustee shall be entitled to receive from the Issuer, Holdings and the Note Guarantors any such Officer’s Certificates, Opinions of Counsel or other documentation as it may reasonably request in connection with any such qualification of this Indenture under the TIA.

Section 14.17. Designated Senior Indebtedness.

For purposes of the Existing Senior Subordinated Note Indenture, the obligations of the Issuer and the Note Guarantors under the Notes and this Indenture and the New 12.00% Senior Notes and the New 12.00% Senior Notes Indenture shall be Designated Senior Indebtedness (as defined in the Existing Senior Subordinated Note Indenture) for all purposes under the Existing Senior Subordinated Note Indenture.

[Signatures on following page]

 

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

 

      REALOGY CORPORATION
By    /s/ Anthony E. Hull
  Name:   Anthony E. Hull
  Title:   Chief Financial Officer
      DOMUS HOLDINGS CORP.
By    /s/ Anthony E. Hull
  Name:   Anthony E. Hull
  Title:   Chief Financial Officer

[11.50% Senior Notes Indenture]


CARTUS CORPORATION

CDRE TM LLC

NRT INSURANCE AGENCY, INC.

REALOGY OPERATIONS LLC

REALOGY SERVICES GROUP LLC

REALOGY SERVICES VENTURE PARTNER LLC

SOTHEBY’S INTERNATIONAL REALTY LICENSEE LLC

WREM, INC.

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Chief Financial Officer

[11.50% Senior Notes Indenture]


ASSOCIATES REALTY, INC.

CARTUS ASSET RECOVERY CORPORATION

CARTUS PARTNER CORPORATION

FEDSTATE STRATEGIC CONSULTING, INCORPORATED

J.W. RIKER-NORTHERN R.I., INC.

LAKECREST TITLE, LLC

NRT PHILADELPHIA LLC

REFERRAL NETWORK LLC

THE CORCORAN GROUP EAST SIDE, INC.

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Executive Vice President & Treasurer

[11.50% Senior Notes Indenture]


AMERICAN TITLE COMPANY OF HOUSTON

ATCOH HOLDING COMPANY

BURNET TITLE LLC

BURNET TITLE HOLDING LLC

BURROW ESCROW SERVICES, INC.

CORNERSTONE TITLE COMPANY

EQUITY TITLE COMPANY

EQUITY TITLE MESSENGER SERVICE HOLDING LLC

FIRST CALIFORNIA ESCROW CORPORATION

FRANCHISE SETTLEMENT SERVICES LLC

GUARDIAN HOLDING COMPANY

GUARDIAN TITLE AGENCY, LLC

GUARDIAN TITLE COMPANY

GULF SOUTH SETTLEMENT SERVICES, LLC

KEYSTONE CLOSING SERVICES LLC

MARKET STREET SETTLEMENT GROUP LLC

MID-ATLANTIC SETTLEMENT SERVICES LLC

NATIONAL COORDINATION ALLIANCE LLC

NRT SETTLEMENT SERVICES OF MISSOURI LLC

NRT SETTLEMENT SERVICES OF TEXAS LLC

PROCESSING SOLUTIONS LLC

SECURED LAND TRANSFERS LLC

ST. JOE TITLE SERVICES LLC

TAW HOLDING INC.

TEXAS AMERICAN TITLE COMPANY

TITLE RESOURCE GROUP AFFILIATES HOLDINGS LLC

TITLE RESOURCE GROUP HOLDINGS LLC

TITLE RESOURCE GROUP LLC

TITLE RESOURCE GROUP SERVICES LLC

TITLE RESOURCES INCORPORATED

TRG SERVICES, ESCROW, INC.

TRG SETTLEMENT SERVICES, LLP

WAYDAN TITLE, INC.

WEST COAST ESCROW COMPANY

By:   /s/ Thomas N. Rispoli
Name:   Thomas N. Rispoli
Title:   Chief Financial Officer

[11.50% Senior Notes Indenture]


BETTER HOMES AND GARDENS REAL ESTATE LLC

BETTER HOMES AND GARDENS REAL ESTATE

LICENSEE LLC

CENTURY 21 REAL ESTATE LLC

CGRN, INC.

COLDWELL BANKER LLC

COLDWELL BANKER REAL ESTATE LLC

ERA FRANCHISE SYSTEMS LLC

GLOBAL CLIENT SOLUTIONS LLC

ONCOR INTERNATIONAL LLC

REALOGY FRANCHISE GROUP LLC

REALOGY GLOBAL SERVICES LLC

REALOGY LICENSING LLC

SOTHEBY’S INTERNATIONAL REALTY AFFILIATES LLC

WORLD REAL ESTATE MARKETING LLC

By:   /s/ Andrew G. Napurano
Name:   Andrew G. Napurano
Title:   Chief Financial Officer

[11.50% Senior Notes Indenture]


FSA MEMBERSHIP SERVICES, LLC
By:   /s/ Marilyn J. Wasser
Name:   Marilyn J. Wasser
Title:   Executive Vice President

[11.50% Senior Notes Indenture]


ALPHA REFERRAL NETWORK LLC

ASSOCIATED CLIENT REFERRAL LLC

ASSOCIATES REALTY NETWORK

BURGDORFF LLC

BURGDORFF REFERRAL ASSOCIATES LLC

BURNET REALTY LLC

CAREER DEVELOPMENT CENTER, LLC

COLDWELL BANKER COMMERCIAL PACIFIC PROPERTIES LLC

COLDWELL BANKER PACIFIC PROPERTIES LLC

COLDWELL BANKER REAL ESTATE SERVICES LLC

COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY

COLDWELL BANKER RESIDENTIAL BROKERAGE LLC

COLDWELL BANKER RESIDENTIAL REAL ESTATE LLC

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK, INC.

COLORADO COMMERCIAL, LLC

HOME REFERRAL NETWORK LLC

JACK GAUGHEN LLC

NRT ARIZONA LLC

NRT ARIZONA COMMERCIAL LLC

NRT ARIZONA REFERRAL LLC

NRT COLORADO LLC

NRT COLUMBUS LLC

NRT COMMERCIAL LLC

NRT COMMERCIAL UTAH LLC

NRT DEVELOPMENT ADVISORS LLC

NRT DEVONSHIRE LLC

NRT HAWAII REFERRAL, LLC

NRT LLC

NRT MID-ATLANTIC LLC

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

[11.50% Senior Notes Indenture]


NRT MISSOURI LLC

NRT MISSOURI REFERRAL NETWORK LLC

NRT NEW ENGLAND LLC

NRT NEW YORK LLC

NRT NORTHFORK LLC

NRT PITTSBURGH LLC

NRT REFERRAL NETWORK LLC

NRT RELOCATION LLC

NRT REOEXPERTS LLC

NRT SUNSHINE INC.

NRT TEXAS LLC

NRT UTAH LLC

REAL ESTATE REFERRAL LLC

REAL ESTATE REFERRALS LLC

REAL ESTATE SERVICES LLC

REFERRAL ASSOCIATES OF NEW ENGLAND LLC

REFERRAL NETWORK, LLC

REFERRAL NETWORK PLUS, INC.

SOTHEBY’S INTERNATIONAL REALTY, INC.

SOTHEBY’S INTERNATIONAL REALTY REFERRAL COMPANY, LLC

THE SUNSHINE GROUP (FLORIDA) LTD. CORP.

THE SUNSHINE GROUP, LTD.

VALLEY OF CALIFORNIA, INC.

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

[11.50% Senior Notes Indenture]


THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:   Justin Huff
Name:   Justin Huff
Title:   Senior Associate


Appendix A

PROVISIONS RELATING TO INITIAL NOTES,

ADDITIONAL NOTES AND EXCHANGE NOTES

Section 1.1 Definitions.

(a) Capitalized Terms.

Capitalized terms used but not defined in this Appendix A have the meanings given to them in the Indenture. The following capitalized terms have the following meanings:

Applicable Procedures ” means, with respect to any transfer or transaction involving a Regulation S Global Note or beneficial interest therein, the rules and procedures of the Depositary for such Global Note, Euroclear and Clearstream, in each case to the extent applicable to such transaction and as in effect from time to time.

Clearstream ” means Clearstream Banking, Société Anonyme, or any successor securities clearing agency.

Euroclear ” means the Euroclear Clearance System or any successor securities clearing agency.

IAI ” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

Institutional Accredited Investor Notes ” means all Definitive Notes offered and sold to IAIs in reliance on Regulation D under the Securities Act in connection with the exchange of the Existing Senior Cash Notes for Notes.

QIB ” means a “qualified institutional buyer” as defined in Rule 144A.

Regulation S ” means Regulation S promulgated under the Securities Act.

Regulation S Notes ” means all Notes offered and sold outside the United States in reliance on Regulation S.

Restricted Period ”, with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (a) the day on which such Notes are first offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S, notice of which day shall be promptly given by the Issuer to the Trustee, and (b) the date of issuance with respect to any such Notes (with respect to Initial Notes, only clause (b) shall be applicable).

Rule 501 ” means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

Rule 144 ” means Rule 144 promulgated under the Securities Act.

Rule 144A ” means Rule 144A promulgated under the Securities Act.

Rule 144A Notes ” means all Notes offered and sold to QIBs in reliance on Rule 144A.

Rule 904 ” means Rule 904 promulgated under the Securities Act.


(b) Other Definitions.

 

Term:

   Defined in Section:  

“Agent Members”

     2.1 (c) 

“Automatic Exchange”

     2.3 (i) 

“Automatic Exchange Date”

     2.3 (i) 

“Automatic Exchange Notice”

     2.3 (i) 

“Automatic Exchange Notice Date”

     2.3 (i) 

“Global Note”

     2.1 (b) 

“IAI Global Note”

     2.1 (b) 

“Regulation S Global Note”

     2.1 (b) 

“Regulation S Permanent Global Note”

     2.1 (b) 

“Regulation S Temporary Global Note”

     2.1 (b) 

“Restricted Note”

     2.3 (i) 

“Rule 144A Global Note”

     2.1 (b) 

“Unrestricted Note”

     2.3 (i) 

Section 2.1 Form and Dating

(a) The Initial Notes issued on the date hereof will be offered and sold by the Issuer only to (1) QIBs in reliance on Section 4(2) of the Securities Act and (2) IAIs in reliance on Regulation D under the Securities Act. Such Initial Notes may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and IAIs in accordance with Rule 501. Subsequent to the Issue Date, Additional Notes may be (i) offered and sold by the Issuer to initial purchasers and (ii) resold, initially only to (1) QIBs in reliance on Rule 144A and (2) Persons other than U.S. Persons (as defined in Regulation S). Such Additional Notes may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and IAIs in accordance with Rule 501.

(b)  Global Notes. Rule 144A Notes shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form (collectively, the “ Rule 144A Global Note ”), without interest coupons and bearing the Global Notes Legend, the Restricted Notes Legend and the OID Legend, which shall be registered in the name of the Depositary or a nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture. Regulation S Notes shall be issued initially in the form of one or more global Notes (collectively, the “ Regulation S Temporary Global Note ” and together with the Regulation S Permanent Global Note (identified below) the “ Regulation S Global Note ”), without interest coupons and bearing the Global Notes Legend, the Restricted Notes Legend and the OID Legend, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture to accommodate transfers of beneficial interests in the Notes to non-U.S. Persons subsequent to the initial distribution. One or more global Notes in definitive, fully registered form without interest coupons and bearing the Global Notes Legend, the Restricted Notes Legend and the OID Legend (collectively, the “ IAI Global Note ”) shall also be issued on the Issue Date, deposited with the Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture to accommodate transfers of beneficial interests in the Notes to IAIs subsequent to the initial distribution in the Existing Notes Exchange Offer. Beneficial ownership interests in the Regulation S Global Note shall not be exchangeable for interests in the Rule 144A Global Note, the IAI Global Note or any other Note without a Restricted Notes Legend until the expiration of the

 

Appendix-2


Restricted Period. The Rule 144A Global Note, the IAI Global Note, the Regulation S Temporary Global Note and the Regulation S Permanent Global Note are each referred to herein as a “ Global Note ” and are collectively referred to herein as “ Global Notes ”, provided that the term “Global Note” when used in Sections 2.1(c), 2.3(f), 2.3(g)(i), 2.3(h)(i), 2.3(h)(ii) and 2.4 shall also include any Note in global form issued in connection with an Exchange Offer. The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee and on the schedules thereto as hereinafter provided.

The Restricted Period shall be terminated upon certification in form reasonably satisfactory to the Trustee, if required, that beneficial ownership interests in the Regulation S Temporary Global Note are owned either by non-U.S. Persons or U.S. Persons who purchased such interests in a transaction that did not require registration under the Securities Act (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who shall take delivery of a beneficial ownership interest in a 144A Global Note bearing a Restricted Notes Legend, all as contemplated by this Appendix A).

Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in a Global Note (the “ Regulation S Permanent Global Note ”) pursuant to the applicable procedures of the Depositary. Simultaneously with the authentication of the Regulation S Permanent Global Note, the Trustee shall cancel the Regulation S Temporary Global Note.

The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Security and the Regulation S Permanent Global Security that are held by participants through Euroclear or Clearstream.

(c) Institutional Accredited Investor Notes. Institutional Accredited Investor Notes shall be issued initially in the form of one or more permanent Definitive Notes, without interest coupons and bearing the Restricted Notes Legend, the Definitive Notes Legend and the OID Legend, which shall be registered in the name of the beneficial owner or owners of such Note (or the nominee of such beneficial owner or owners) and delivered to the respective beneficial owner or owners (or the nominee of such beneficial owner or owners). Upon issuance, any such Institutional Accredited Investor Notes shall be duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture.

(d) Book-Entry Provisions. This Section 2.1(d) shall apply only to a Global Note deposited with or on behalf of the Depositary.

The Issuer shall execute and the Trustee shall, in accordance with this Section 2.1(d) and Section 2.2 and pursuant to an order of the Issuer signed by one Officer of the Issuer, authenticate and deliver initially one or more Global Notes that (i) shall be registered in the name of the Depositary for such Global Note or Global Notes or the nominee of such Depositary and (ii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions or held by the Trustee as Custodian.

Members of, or participants in, the Depositary (“ Agent Members ”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary or by the Trustee as Custodian or under such Global Note, and the Depositary may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee

 

Appendix-3


or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Note.

(e) Definitive Notes. Except as provided in Section 2.3 or 2.4, owners of beneficial interests in Global Notes will not be entitled to receive physical delivery of certificated Notes.

Section 2.2 Authentication. The Trustee shall authenticate and make available for delivery upon an Issuer Order (a) Initial Notes for original issue on the date hereof in an aggregate principal amount of $491,824,000, (b) subject to the terms of this Indenture, Additional Notes, (c) the Exchange Notes for issue only in an Exchange Offer and pursuant to the Registration Rights Agreement and for a like principal amount of Initial Notes exchanged pursuant thereto and (d) upon an Automatic Exchange, Unrestricted Notes. Such Issuer Order shall specify the amount of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated and whether the Notes are to be Initial Notes, Additional Notes, Exchange Notes or Unrestricted Notes.

Section 2.3 Transfer and Exchange.

(a)  Transfer and Exchange of Definitive Notes. When Definitive Notes are presented to the Registrar with a request:

(i) to register the transfer of such Definitive Notes; or

(ii) to exchange such Definitive Notes for an equal principal amount of Definitive Notes of other authorized denominations,

the Registrar shall register the transfer or make the exchange as requested if the reasonable requirements for such transaction are met; provided , however , that the Definitive Notes surrendered for transfer or exchange:

(1) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing; and

(2) in the case of Transfer Restricted Notes, are accompanied by the following additional information and documents, as applicable:

(A) if such Definitive Notes are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect (in the form set forth on the reverse side of the Initial Note); or

(B) if such Definitive Notes are being transferred to the Issuer, a certification to that effect (in the form set forth on the reverse side of the Initial Note); or

(C) if such Definitive Notes are being transferred pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or in reliance upon another exemption from the registration requirements of the Securities Act, (x) a certification to that effect (in the form set forth in Exhibit C ) and (y) if the Issuer so requests, an opinion of counsel or other evidence reasonably satisfactory to them as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i).

 

Appendix-4


(b)  Restrictions on Transfer of a Definitive Note for a Beneficial Interest in a Global Note. A Definitive Note may not be exchanged for a beneficial interest in a Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Registrar, together with:

(i) certification (in the form set forth on the reverse side of the Initial Note) that such Definitive Note is being transferred (1) to a QIB in accordance with Rule 144A, (2) to an IAI that has furnished to the Trustee a signed letter substantially in the form of Exhibit C or (3) outside the United States in an offshore transaction within the meaning of Regulation S and in compliance with Rule 904 under the Securities Act; and

(ii) written instructions directing the Trustee to make, or to direct the Custodian to make, an adjustment on its books and records with respect to such Global Note to reflect an increase in the aggregate principal amount of the Notes represented by the Global Note, such instructions to contain information regarding the Depositary account to be credited with such increase, then the Trustee shall cancel such Definitive Note and cause, or direct the Custodian to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Custodian, the aggregate principal amount of Notes represented by the Global Note to be increased by the aggregate principal amount of the Definitive Note to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Note equal to the principal amount of the Definitive Note so canceled. If no Global Notes are then outstanding and the Global Note has not been previously exchanged for certificated securities pursuant to Section 2.4, the Issuer shall issue and the Trustee shall authenticate, upon an Issuer Order, a new Global Note in the appropriate principal amount.

(c)  Transfer and Exchange of Global Notes. (i) The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depositary, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depositary therefor. A transferor of a beneficial interest in a Global Note shall deliver a written order given in accordance with the Depositary’s procedures containing information regarding the participant account of the Depositary to be credited with a beneficial interest in such Global Note or another Global Note and such account shall be credited in accordance with such order with a beneficial interest in the applicable Global Note and the account of the Person making the transfer shall be debited by an amount equal to the beneficial interest in the Global Note being transferred. Transfers by an owner of a beneficial interest in the Rule 144A Global Note or the IAI Global Note to a transferee who takes delivery of such interest through the Regulation S Global Note, whether before or after the expiration of the Restricted Period, shall be made only upon receipt by the Trustee of a certification in the form provided on the reverse of the Initial Notes from the transferor to the effect that such transfer is being made in accordance with Regulation S or (if available) Rule 144 under the Securities Act and that, if such transfer is being made prior to the expiration of the Restricted Period, the interest transferred shall be held immediately thereafter through Euroclear or Clearstream. In the case of a transfer of a beneficial interest in either the Regulation S Global Note or the Rule 144A Global Note for an interest in the IAI Global Note, the transferee must furnish a signed letter substantially in the form of Exhibit C to the Trustee.

(ii) If the proposed transfer is a transfer of a beneficial interest in one Global Note to a beneficial interest in another Global Note, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of Global Note from which such interest is being transferred.

 

Appendix-5


(iii) Notwithstanding any other provisions of this Appendix A (other than the provisions set forth in Section 2.4), a Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

(iv) In the event that a Global Note is exchanged for Definitive Notes pursuant to Section 2.4 prior to the consummation of the Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such Notes, such Notes may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Notes intended to ensure that such transfers comply with Rule 144A, Regulation S or such other applicable exemption from registration under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Issuer.

(d) Restrictions on Transfer of Regulation S Global Note . (i) Prior to the expiration of the Restricted Period, interests in the Regulation S Global Note may only be held through Euroclear or Clearstream. During the Restricted Period, beneficial ownership interests in the Regulation S Global Note may only be sold, pledged or transferred through Euroclear or Clearstream in accordance with the Applicable Procedures and only (1) to the Issuer, (2) so long as such security is eligible for resale pursuant to Rule 144A, to a Person whom the selling holder reasonably believes is a QIB that purchases for its own account or for the account of a QIB to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, (3) in an offshore transaction in accordance with Regulation S, (4) pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if applicable) under the Securities Act or another available exemption, (5) to an IAI purchasing for its own account, or for the account of such an IAI, in a minimum principal amount of Notes of $250,000 or (6) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. Prior to the expiration of the Restricted Period, transfers by an owner of a beneficial interest in the Regulation S Global Note to a transferee who takes delivery of such interest through the Rule 144A Global Note or the IAI Global Note shall be made only in accordance with Applicable Procedures and upon receipt by the Trustee of a written certification from the transferor of the beneficial interest in the form provided on the reverse of the Initial Note to the effect that such transfer is being made to (1) a QIB within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A or (2) an IAI purchasing for its own account, or for the account of such an IAI, in a minimum principal amount of the Notes of $250,000. Such written certification shall no longer be required after the expiration of the Restricted Period. In the case of a transfer of a beneficial interest in the Regulation S Global Note for an interest in the IAI Global Note, the transferee must furnish a signed letter substantially in the form of Exhibit C to the Trustee.

(ii) Upon the expiration of the Restricted Period, beneficial ownership interests in the Regulation S Global Note shall be transferable in accordance with applicable law and the other terms of this Indenture.

(e)  Legend .

(i) Except as permitted by the following paragraphs (ii), (iii) or (iv), each Note certificate evidencing the Global Notes and the Definitive Notes (and all Notes issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only):

 

Appendix-6


“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

(1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “QIB”) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER REGULATION D OF THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”) [ WITH RESPECT TO ADDITIONAL NOTES: OR (C) IT PURCHASED PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT],

(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144 (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN A TRANSACTION EXEMPT FROM THE REQUIREMENTS OF THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION, OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND

(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE.

[ IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S.]

THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED AT ANY TIME

 

Appendix-7


BEGINNING NO LATER THAN 10 DAYS AFTER JANUARY 5, 2011 BY WRITING TO: THE COMPANY AT REALOGY CORPORATION, ONE CAMPUS DRIVE, PARSIPPANY, NJ 07054, ATTENTION: CHIEF FINANCIAL OFFICER.”

Each Definitive Note shall bear the following additional legend:

“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

(ii) Upon any sale or transfer of a Transfer Restricted Note that is a Definitive Note, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Note for a Definitive Note that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Note if the Holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Initial Note).

(iii) After a transfer of any Initial Notes or Additional Notes during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Notes or Additional Notes, as the case may be, all requirements pertaining to the Restricted Notes Legend on such Initial Notes or Additional Notes shall cease to apply and the requirements that any such Initial Notes or Additional Notes be issued in global form shall continue to apply.

(iv) Upon the consummation of an Exchange Offer with respect to the Initial Notes or Additional Notes pursuant to which Holders of such Initial Notes or Additional Notes are offered Exchange Notes in exchange for their Initial Notes or Additional Notes, all requirements pertaining to Initial Notes or Additional Notes that Initial Notes or Additional Notes be issued in global form shall continue to apply, and Exchange Notes in global form without the Restricted Notes Legend shall be available to Holders that exchange such Initial Notes or Additional Notes in such Exchange Offer.

(v) Upon a sale or transfer after the expiration of the Restricted Period of any Initial Note or Additional Note acquired pursuant to Regulation S, all requirements that such Initial Note or Additional Note bear the Restricted Notes Legend shall cease to apply and the requirements requiring any such Initial Note or Additional Note be issued in global form shall continue to apply.

(vi) Any Additional Notes sold in a registered offering shall not be required to bear the Restricted Notes Legend.

(f) Cancelation or Adjustment of Global Note. At such time as all beneficial interests in a Global Note have either been exchanged for Definitive Notes, transferred, redeemed, repurchased or canceled, such Global Note shall be returned by the Depositary to the Trustee for cancelation or retained and canceled by the Trustee. At any time prior to such cancelation, if any beneficial interest in a Global Note is exchanged for Definitive Notes, transferred in exchange for an interest in another Global Note, redeemed, repurchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Custodian, to reflect such reduction.

 

Appendix-8


(g)  Obligations with Respect to Transfers and Exchanges of Notes.

(i) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate, Definitive Notes and Global Notes at the Registrar’s request.

(ii) No service charge shall be made for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 2.07, 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 of this Indenture).

(iii) Prior to the due presentation for registration of transfer of any Note, the Issuer, the Trustee, the Paying Agent or the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuer, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.

(iv) All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.

(h) No Obligation of the Trustee .

(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depositary or any other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to the registered Holders (which shall be the Depositary or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners.

(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

(i) Automatic Exchange from Global Note Bearing Restricted Notes Legend to Global Note Not Bearing Restricted Notes Legend . Upon the Issuer’s satisfaction that the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act, beneficial interests in a Global Note or in a Definitive Note bearing the Restricted Notes Legend (a “ Restricted Note ”) may be automatically exchanged into beneficial interests in a Global Note

 

Appendix-9


or Definitive Note, as applicable, not bearing the Restricted Notes Legend (an “ Unrestricted Note ”) without any action required by or on behalf of the Holder (the “ Automatic Exchange ”) at any time on or after the date that is the 366th calendar day after (A) with respect to the Initial Notes, the Issue Date or (B) with respect to Additional Notes, if any, the issue date of such Additional Notes, or, in each case, if such day is not a business day, on the next succeeding business day (the “ Automatic Exchange Date ”). Upon the Issuer’s satisfaction that the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act, the Issuer may, but shall not be obligated to, pursuant to the Applicable Procedures (i) provide written notice to DTC at least fifteen (15) calendar days prior to the Automatic Exchange Date, instructing DTC to exchange all of the outstanding beneficial interests in a particular Restricted Global Note to the Unrestricted Global Note, which the Issuer shall have previously otherwise made eligible for exchange with the DTC, (ii) provide prior written notice (the “ Automatic Exchange Notice ”) to each Holder at such Holder’s address appearing in the register of Holders at least fifteen (15) calendar days prior to the Automatic Exchange Date (the “ Automatic Exchange Notice Date ”), which notice must include (w) the Automatic Exchange Date, (x) the section of this Indenture pursuant to which the Automatic Exchange shall occur, (y) the CUSIP number of the Restricted Global Note from which such Holder’s beneficial interests will be transferred and (z) the CUSIP number of the Unrestricted Global Note into which such Holder’s beneficial interests will be transferred, and (iii) on or prior to the Automatic Exchange Date, deliver to the Trustee for authentication one or more Unrestricted Global Notes, duly executed by the Issuer, in an aggregate principal amount equal to the aggregate principal amount of Restricted Global Notes to be exchanged. Upon receipt by the Trustee of an Officer’s Certificate of the Issuer setting forth the information to be stated in such Automatic Exchange Notice, which Officer’s Certificate must be received by the Trustee, on no less than five (5) calendar days prior to the Automatic Exchange Notice Date, the Trustee shall deliver, in the Issuer’s name and at the Issuer’s expense, the Automatic Exchange Notice to each Holder at such Holder’s address appearing in the register of Holders. Notwithstanding anything to the contrary in this Section 2.3(i), during the fifteen (15) day period prior to the Automatic Exchange Date, no transfers or exchanges other than pursuant to this Section 2.3(i) shall be permitted without the prior written consent of the Issuer. As a condition to any Automatic Exchange, the Issuer shall provide, and the Trustee shall be entitled to rely upon, an Officer’s Certificate and Opinion of Counsel in form reasonably acceptable to the Trustee , each to the effect that the Automatic Exchange shall be effected in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act and that the aggregate principal amount of the particular Restricted Global Note is to be transferred to the particular Unrestricted Global Note by adjustment made on the records of the Trustee, as custodian for the Depositary to reflect the Automatic Exchange. Upon such exchange of beneficial interests pursuant to this Section 2.3(i), the aggregate principal amount of the Global Notes shall be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, to reflect the relevant increase or decrease in the principal amount of such Global Note resulting from the applicable exchange. The Issuer shall also provide written notice to the Holder of Restricted Notes that are Definitive Notes at least (15) calendar days prior to the Automatic Exchange Date offering to exchange all of such Definitive Notes for Unrestricted Notes which shall include information similar to the notice provided to Holders of Global Notes under clause (ii) above and upon request of such Holder of Definitive Notes shall follow the procedures set forth above for exchanging such Definitive Notes for Definitive Notes that are not Restricted Notes. The Restricted Notes from which beneficial interests are transferred pursuant to an Automatic Exchange shall be canceled following the Automatic Exchange.

 

Appendix-10


Section 2.4 Definitive Notes.

(a) A Global Note deposited with the Depositary or with the Trustee as Custodian pursuant to Section 2.1 or issued in connection with an Exchange Offer shall be transferred to the beneficial owners thereof in the form of Definitive Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 and (i) the Depositary notifies the Issuer that it is unwilling or unable to continue as a Depositary for such Global Note or if at any time the Depositary ceases to be a “clearing agency” registered under the Exchange Act and, in each case, a successor depositary is not appointed by the Issuer within 90 days of such notice or after the Issuer becomes aware of such cessation, or (ii) an Event of Default has occurred and is continuing or (iii) the Issuer, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of certificated Notes under this Indenture; provided that in no event shall the Regulation S Temporary Global Note be exchanged by the Issuer for Definitive Notes prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act.

(b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depositary to the Trustee, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section shall be executed, authenticated and delivered only in denominations of $2,000 and integral multiples of $1,000 in excess thereof and registered in such names as the Depositary shall direct. Any certificated Initial Note or Additional Note in the form of a Definitive Note delivered in exchange for an interest in the Global Note shall, except as otherwise provided by Section 2.3(e), bear the Restricted Notes Legend.

(c) Subject to the provisions of Section 2.4(b), the registered Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

(d) In the event of the occurrence of any of the events specified in Section 2.4(a)(i), (ii) or (iii), the Issuer will promptly make available to the Trustee a reasonable supply of Definitive Notes in fully registered form without interest coupons.

 

Appendix-11


Exhibit A

[FORM OF FACE OF INITIAL NOTE]

[RULE 144A][REGULATION S][IAI][GLOBAL] NOTE

[Global Notes Legend]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[Restricted Notes Legend]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

(1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “QIB”) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER REGULATION D OF THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”) [ WITH RESPECT TO ADDITIONAL NOTES: OR (C) IT PURCHASED PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT],

(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144 (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, FOR INVESTMENT PURPOSES AND NOT WITH


A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN A TRANSACTION EXEMPT FROM THE REQUIREMENTS OF THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND

(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE.

[ IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S.]

[Temporary Regulation S Global Notes Legend]

THIS SECURITY IS A TEMPORARY GLOBAL SECURITY. PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD BY ANY PERSON OTHER THAN (1) A NON-U.S. PERSON OR (2) A U.S. PERSON THAT PURCHASED SUCH INTEREST IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). BENEFICIAL INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR CERTIFICATED NOTES OTHER THAN A PERMANENT GLOBAL NOTE IN ACCORDANCE WITH THE TERMS OF THE INDENTURE. TERMS IN THIS LEGEND ARE USED AS USED IN REGULATION S UNDER THE SECURITIES ACT.

[Definitive Notes Legend]

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

[OID Legend]

THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED AT ANY TIME BEGINNING NO LATER THAN 10 DAYS AFTER JANUARY 5, 2011 BY WRITING TO: THE

 

A-2


COMPANY AT REALOGY CORPORATION, ONE CAMPUS DRIVE, PARSIPPANY, NJ 07054, ATTENTION: CHIEF FINANCIAL OFFICER.

 

A-3


CUSIP [            ]

ISIN [            ]

[RULE 144A][REGULATION S][IAI][GLOBAL] NOTE

11.50% Senior Notes due 2017

January5, 2011

 

No.             

Principal Amount [$                      ][, as

revised by the Schedule of Exchanges of

Interests in Global Security attached hereto] 1

 

REALOGY CORPORATION

promises to pay to [CEDE & CO.] 1 [Name of IAI] 2 or registered assigns, [the principal sum of [            ] United States Dollars, revised by the Schedule of Exchanges of Interests in Global Security attached hereto,] 1 [[            ] United States Dollars] 2 on April 15, 2017.

Interest Payment Dates: April 15 and October 15

Record Dates: April 1 and October 1

 

 

1

Insert in Global Notes

2

Insert in Definitive Notes

 

A-4


IN WITNESS HEREOF, the Issuer has caused this instrument to be duly executed as of the date first set forth above.

 

REALOGY CORPORATION

By:

   
  Name:
  Title

 

A-5


This is one of the Notes referred to in the within-mentioned Indenture:

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

By:

   
  Authorized Signatory

Dated:

 

A-6


[FORM OF BACK OF INITIAL NOTE]

11.50% Senior Notes due 2017

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. Realogy Corporation, a Delaware corporation, promises to pay interest on the principal amount of this Note at 10.50% per annum from October 15, 2010 to, but not including the Issue Date, and 11.50% per annum from the Issue Date until maturity and shall pay the Additional Interest, if any, payable pursuant to the Registration Rights Agreement referred to below. The Issuer will pay interest and Additional Interest, if any, semi-annually in arrears on April 15 and October 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “ Interest Payment Date ”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from October 15, 2010; provided that the first Interest Payment Date shall be April 15, 2011. The Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the interest rate on the Notes; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest, and Additional Interest, if any, (without regard to any applicable grace periods) from time to time on demand at the interest rate on the Notes. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

2. METHOD OF PAYMENT. The Issuer will pay interest on the Notes and Additional Interest, if any, to the Persons who are registered Holders of Notes at the close of business on April 1 or October 1 (whether or not a Business Day), as the case may be, next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Principal of, premium, if any, and interest and Additional Interest, if any, on the Notes will be payable at the office or agency of the Issuer maintained for such purpose or, at the option of the Issuer, payment of interest and Additional Interest, if any, may be made by check mailed to the Holders at their respective addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Additional Interest, if any, on all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Issuer or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York Mellon Trust Company, N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuer may change any Paying Agent or Registrar without notice to the Holders. The Issuer or any of its Wholly Owned Subsidiaries may act in any such capacity.

4. INDENTURE. The Issuer issued the Notes under an Indenture, dated as of January 5, 2011 (the “ Indenture ”), among Realogy Corporation, Domus Holdings Corp., the Note Guarantors named therein and the Trustee. This Note is one of a duly authorized issue of notes of the Issuer designated as its 11.50% Senior Notes due 2017. The Issuer shall be entitled to issue Additional Notes pursuant to Section 2.01 and 4.09 of the Indenture. The Notes (including any Exchange Notes issued in exchange therefor) and Additional Notes shall be treated as a single class of securities for all purposes under the Indenture. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “ TIA ”). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement

 

A-7


of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION.

(a) Except as described under clauses (b) and (c) below, the Notes will not be redeemable at the Issuer’s option before April 15, 2013.

(b) At any time and from time to time prior to April 15, 2013, the Issuer may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice mailed by first class mail to the registered address of each Holder (or electronically transmitted) or otherwise in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the date of redemption, subject to the rights of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(c) At any time and from time to time on or prior to April 15, 2013, the Issuer may redeem in the aggregate up to 100% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent of the Issuer, in each case to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer from it, at a redemption price (expressed as a percentage of the principal amount thereof) of 111.500%, plus accrued and unpaid interest and Additional Interest, if any, to the date of redemption (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided, however, that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed (or electronically transmitted) to each Holder of Notes being redeemed and otherwise in accordance with the procedures set forth in the Indenture.

(d) Notice of any redemption upon any Equity Offering may be given prior to the completion of such Equity Offering, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

(e) On and after April 15, 2013, the Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, upon notice pursuant to Section 3.03 of the Indenture at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable date of redemption, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on April 15 of each of the years indicated below:

 

Year

   Redemption
Price
 

2013

     105.750

2014

     102.875

2015 and thereafter

     100.000

(f) Any redemption pursuant to this paragraph 5 shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.

 

A-8


6. MANDATORY REDEMPTION. The Issuer shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

7. NOTICE OF REDEMPTION. Subject to Section 3.09 of the Indenture, notice of redemption will be mailed by first class mail, postage prepaid (or electronically transmitted), at least 30 days but not more than 60 days before the redemption date (except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 13 of the Indenture) to each Holder whose Notes are to be redeemed at its registered address or otherwise in accordance with the procedures of DTC. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 in excess of $2,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date, interest ceases to accrue on Notes or portions thereof called for redemption.

8. OFFERS TO REPURCHASE.

(a) Upon the occurrence of a Change of Control, each Holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Issuer to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase (subject to the right of the Holders of record on the relevant Record Date to receive interest due of the relevant Interest Payment Date), as provided in, and subject to the terms of, the Indenture. The Change of Control Offer shall be made in accordance with Section 4.14 of the Indenture.

(b) If the Issuer or any of its Restricted Subsidiaries consummates an Asset Sale, within 10 Business Days after the date that Excess Proceeds exceed $30.0 million, the Issuer shall commence an offer to all Holders of the Notes (and at the option of the Issuer to the holders of any Senior Pari Passu Indebtedness) (an “ Asset Sale Offer ”), to purchase the maximum principal amount of Notes (and such Senior Pari Passu Indebtedness) that is a minimum of $2,000 or an integral multiple of $1,000 that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Senior Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and Additional Interest, if any (or, in respect of such Senior Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes (and such Senior Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes or any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes (and such Senior Pari Passu Indebtedness) surrendered by such holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes (and such Senior Pari Passu Indebtedness) to be purchased on a pro rata basis, by lot or by such other method as Trustee shall deem fair and appropriate (and in a manner as complies with applicable legal requirements); provided that no Notes of $2,000 or less shall be purchased in part, except that if all of the Notes of a Holder are to be purchased, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1,000 in excess thereof, shall be purchased. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Issuer prior to any related Purchase Date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” attached to the Notes.

9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The

 

A-9


transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents, and Holders shall be required to pay any taxes and fees required by law or permitted by the Indenture. The Issuer need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuer need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed.

10. SUBORDINATION. The Holdings Guarantee is subordinated to Holdings Senior Indebtedness of Holdings on the terms and subject to the conditions set forth in the Indenture. To the extent provided in the Indenture, Holdings Senior Indebtedness must be paid before the Holdings Guarantee may be paid. The Issuer agrees, and each Holder by accepting a Note agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give effect thereto and appoints the Trustee as attorney-in-fact for such purpose.

11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.

12. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees or the Notes may be amended or supplemented as provided in the Indenture.

13. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes by notice to the Issuer may declare the principal of, premium, if any, interest, Additional Interest, if any, and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture, the Notes or the Guarantees except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default (except a Default relating to the payment of principal, premium, if any, Additional Interest, if any, or interest) if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture except a continuing Default in payment of the principal of, premium, if any, Additional Interest, if any, or interest on, any of the Notes held by a non-consenting Holder (including in connection with an Asset Sale Offer or a Change of Control Offer). The Issuer, Holdings and each Note Guarantor (to the extent that Holdings or such Note Guarantor is so required under the TIA) are required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required to deliver to the Trustee, within thirty (30) days after the occurrence of a Default, written notice in the form of an Officer’s Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

14. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.

15. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED NOTES. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Transfer Restricted Notes shall have all rights set forth in the Registration Rights Agreement, dated as of January

 

A-10


5, 2011, among Realogy Corporation, Domus Holdings Corp., the Note Guarantors named therein and the other parties named on the signature pages thereof (the “ Registration Rights Agreement ”), including the right to receive Additional Interest (as defined in the Registration Rights Agreement).

16. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE GUARANTEES.

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

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to the Issuer at the following address:

c/o Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

 

A-11


ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:                                                                                                                                                    

(Insert assignee’s legal name)                                                                 

 

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                                                                                                                                 

to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.

Date:                     

 

Your Signature:    
  (Sign exactly as your name appears on the face of this Note)
Signature Guarantee*:    
 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-12


CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF TRANSFER RESTRICTED NOTES

This certificate relates to $______ principal amount of Notes held in (check applicable space) _______ book-entry or _______ definitive form by the undersigned.

The undersigned (check one box below):

 

¨ has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Note held by the Depositary a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above) in accordance with the Indenture; or

 

¨ has requested the Trustee by written order to exchange or register the transfer of a Note or Notes.

In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144 under the Securities Act, the undersigned confirms that such Notes are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

 

(1)    ¨    to the Issuer; or
(2)    ¨    to the Registrar for registration in the name of the Holder, without transfer; or
(3)    ¨    pursuant to an effective registration statement under the Securities Act of 1933; or
(4)    ¨    inside the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or
(5)    ¨    outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or
(6)    ¨    to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements; or
(7)    ¨    pursuant to another available exemption from registration under the Securities Act of 1933.

 

A-13


Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided , however , that if box (5), (6) or (7) is checked, the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuer has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.

 

   
Your Signature

 

Signature Guarantee:                                                                  
Date:                                   
Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee     Signature of Signature Guarantee
   

TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

Dated:                                 
    NOTICE: To be executed by an executive officer

 

A-14


OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:

¨      Section 4.10      ¨     Section 4.14

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased:

$             

 

Date:         Your Signature:    
        (Sign exactly as your name appears on the face of this Note)
     

 

Tax Identification No.:                             

 

Signature Guarantee*:    
 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-15


SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $______. The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

 

Date of

Exchange

   Amount of
decrease
in Principal
Amount of this
Global Note
   Amount of increase
in Principal
Amount of this
Global Note
   Principal Amount
of
this Global Note
following such
decrease or
increase
   Signature of
authorized officer
of Trustee or
Custodian

 

* This schedule should be included only if the Note is issued in global form.

 

A-16


Exhibit B

[FORM OF FACE OF EXCHANGE NOTE]

[Global Notes Legend]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[Definitive Notes Legend]

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

[OID Legend]

THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED AT ANY TIME BEGINNING NO LATER THAN 10 DAYS AFTER JANUARY 5, 2011 BY WRITING TO: THE COMPANY AT REALOGY CORPORATION, ONE CAMPUS DRIVE, PARSIPPANY, NJ 07054, ATTENTION: CHIEF FINANCIAL OFFICER.


CUSIP: [            ]

ISIN: [            ]

[GLOBAL] NOTE

11.50% Senior Notes due 2017

[                ]

 

No.             

Principal Amount [$              ][, as revised by the Schedule of Exchanges of Interests in Global Security attached hereto] 1

 

 

REALOGY CORPORATION

promises to pay to [CEDE & CO.] 1 or registered assigns, the principal sum of ___________ United States Dollars [, revised by the Schedule of Exchanges of Interests in Global Security attached hereto,] 1 on April 15, 2017.

Interest Payment Dates: April 15 and October 15

Record Dates: April 1 and October 1

 

1

Insert in Global Notes

 

B-2


IN WITNESS HEREOF, the Issuer has caused this instrument to be duly executed as of the date first set forth above.

 

REALOGY CORPORATION

By:

   
  Name:
  Title:

 

B-3


This is one of the Notes referred to in the within-mentioned Indenture:

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

By:

   
  Authorized Signatory

Dated:

 

B-4


[FORM OF BACK OF EXCHANGE NOTE]

11.50% Senior Notes due 2017

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. Realogy Corporation, a Delaware corporation, promises to pay interest on the principal amount of this Note at 10.50% per annum from October 15, 2010 to, but not including the Issue Date, and 11.50% per annum from the Issue Date until maturity. The Issuer will pay interest, semi-annually in arrears on April 15 and October 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “ Interest Payment Date ”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from October 15, 2010; provided that the first Interest Payment Date shall be April 15, 2011. The Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the interest rate on the Notes; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the interest rate on the Notes. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

2. METHOD OF PAYMENT. The Issuer will pay interest on the Notes to the Persons who are registered Holders of Notes at the close of business on April 1 or October 1 (whether or not a Business Day), as the case may be, next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Principal of, premium, if any, and interest on the Notes will be payable at the office or agency of the Issuer maintained for such purpose or, at the option of the Issuer, payment of interest may be made by check mailed to the Holders at their respective addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium, on all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Issuer or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York Mellon Trust Company N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuer may change any Paying Agent or Registrar without notice to the Holders. The Issuer or any of its Wholly Owned Subsidiaries may act in any such capacity.

4. INDENTURE. The Issuer issued the Notes under an Indenture, dated as of January 5, 2011 (the “ Indenture ”), among Realogy Corporation, Domus Holdings Corp., the Note Guarantors named therein and the Trustee. This Note is one of a duly authorized issue of notes of the Issuer designated as its 11.50% Senior Notes due 2017. The Issuer shall be entitled to issue Additional Notes pursuant to Section 2.01 and 4.09 of the Indenture. The Notes (including any Exchange Notes issued in exchange therefor) and Additional Notes shall be treated as a single class of securities for all purposes under the Indenture. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “ TIA ”). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

 

B-5


5. OPTIONAL REDEMPTION.

(a) Except as described under clauses (b) and (c) below, the Notes will not be redeemable at the Issuer’s option before April 15, 2013.

(b) At any time and from time to time prior to April 15, 2013, the Issuer may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice mailed by first class mail to the registered address of each Holder (or electronically transmitted) or otherwise in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest to the date of redemption, subject to the rights of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(c) At any time and from time to time on or prior to April 15, 2013, the Issuer may redeem in the aggregate up to 100% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent of the Issuer, in each case to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer from it, at a redemption price (expressed as a percentage of the principal amount thereof) of 111.500%, plus accrued and unpaid interest and Additional Interest, if any, to the date of redemption (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided, however, that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed (or electronically transmitted) to each Holder of Notes being redeemed and otherwise in accordance with the procedures set forth in the Indenture.

(d) Notice of any redemption upon any Equity Offering may be given prior to the completion of such Equity Offering, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

(e) On and after April 15, 2013, the Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, upon notice pursuant to Section 3.03 of the Indenture at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon to the applicable date of redemption, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on April 15 of each of the years indicated below:

 

Year

   Redemption
Price
 

2013

     105.750

2014

     102.875

2015 and thereafter

     100.000

(f) Any redemption pursuant to this paragraph 5 shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.

6. MANDATORY REDEMPTION. The Issuer shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

 

B-6


7. NOTICE OF REDEMPTION. Subject to Section 3.09 of the Indenture, notice of redemption will be mailed by first class mail, postage prepaid (or electronically transmitted), at least 30 days but not more than 60 days before the redemption date (except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 13 of the Indenture) to each Holder whose Notes are to be redeemed at its registered address or otherwise in accordance with the procedures of DTC. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 in excess of $2,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date, interest ceases to accrue on Notes or portions thereof called for redemption.

8. OFFERS TO REPURCHASE.

(a) Upon the occurrence of a Change of Control, each Holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Issuer to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase (subject to the right of the Holders of record on the relevant Record Date to receive interest due of the relevant Interest Payment Date), as provided in, and subject to the terms of, the Indenture. The Change of Control Offer shall be made in accordance with Section 4.14 of the Indenture.

(b) If the Issuer or any of its Restricted Subsidiaries consummates an Asset Sale, within 10 Business Days after the date that Excess Proceeds exceed $30.0 million, the Issuer shall commence an offer to all Holders of the Notes (and at the option of the Issuer to the holders of any Senior Pari Passu Indebtedness) (an “ Asset Sale Offer ”), to purchase the maximum principal amount of Notes (and such Senior Pari Passu Indebtedness) that is a minimum of $2,000 or an integral multiple of $1,000 that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Senior Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest (or, in respect of such Senior Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes (and such Senior Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes or any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes (and such Senior Pari Passu Indebtedness) surrendered by such holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes (and such Senior Pari Passu Indebtedness) to be purchased on a pro rata basis, by lot or by such other method as Trustee shall deem fair and appropriate (and in a manner as complies with applicable legal requirements); provided that no Notes of $2,000 or less shall be purchased in part, except that if all of the Notes of a Holder are to be purchased, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1,000 in excess thereof, shall be purchased. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Issuer prior to any related Purchase Date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” attached to the Notes.

9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents, and Holders shall be required to pay any taxes and fees required by law or permitted by the Indenture. The Issuer need not exchange or register the transfer of any Note or portion

 

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of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuer need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed.

10. SUBORDINATION. The Holdings Guarantee is subordinated to Holdings Senior Indebtedness of Holdings on the terms and subject to the conditions set forth in the Indenture. To the extent provided in the Indenture, Holdings Senior Indebtedness must be paid before the Holdings Guarantee may be paid. The Issuer agrees, and each Holder by accepting a Note agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give effect thereto and appoints the Trustee as attorney-in-fact for such purpose.

11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.

12. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees or the Notes may be amended or supplemented as provided in the Indenture.

13. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes by notice to the Issuer may declare the principal of, premium, if any, interest, Additional Interest, if any, and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture, the Notes or the Guarantees except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default (except a Default relating to the payment of principal, premium, if any, or interest) if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture except a continuing Default in payment of the principal of, premium, if any, or interest on, any of the Notes held by a non-consenting Holder (including in connection with an Asset Sale Offer or a Change of Control Offer). The Issuer, Holdings, and each Note Guarantor (to the extent that Holdings or such Note Guarantor is so required under the TIA) are required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required to deliver to the Trustee, within thirty (30) days after the occurrence of a Default, written notice in the form of an Officer’s Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

14. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.

15. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE GUARANTEES.

16. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience

 

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to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to the Issuer at the following address:

c/o Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

 

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ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:_________________________________________________________________

                                                     (Insert assignee’s legal name)

___________________________________________________________________________________________________________

(Insert assignee’s soc. sec. or tax I.D. no.)

____________________________________________________________________________________________________________

____________________________________________________________________________________________________________

____________________________________________________________________________________________________________

____________________________________________________________________________________________________________

(Print or type assignee’s name, address and zip code)

and irrevocably appoint____________________________________________________________________________________

to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.

Date:____________

 

Your Signature:     
  (Sign exactly as your name appears on the face of this Note)

 

Signature Guarantee*:    
 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

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OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:

¨     Section 4.10     ¨     Section 4.14

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased:

$________

 

   
Date: _____________   Your Signature:      
    (Sign exactly as your name appears on the face of this Note)
  Tax Identification No.: ______________

 

Signature Guarantee*:    
 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $______. The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

 

Date of

Exchange

   Amount of
decrease
in Principal
Amount of this
Global Note
   Amount of increase
in Principal
Amount of this
Global Note
   Principal Amount
of
this Global Note
following such
decrease or
increase
   Signature of
authorized officer
of Trustee or
Custodian

 

 

* This schedule should be included only if the Note is issued in global form.

 

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Exhibit C

FORM OF

TRANSFEREE LETTER OF REPRESENTATION

Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

In care of

The Bank of New York Mellon Trust Company, N.A.

525 William Penn Place, 38 th Floor

Pittsburgh, Pennsylvania 15259

Fax No.: (412) 234-7535

Attention: Corporate Trust Administration

Ladies and Gentlemen:

This certificate is delivered to request a transfer of [    ] principal amount of the 11.50% Senior Notes due 2017 (the “ Notes ”) of Realogy Corporation (the “ Issuer ”).

Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows:

Name:______________________

Address:____________________

Taxpayer ID Number:__________

The undersigned represents and warrants to you that:

1. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “ Securities Act ”)), purchasing for our own account or for the account of such an institutional “accredited investor” at least $250,000 principal amount of the Securities, and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we invest in or purchase securities similar to the Notes in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment.

2. We understand that the Notes have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Notes to offer, sell or otherwise transfer such Notes prior to the date that is one year after the later of the date of original issue and the last


date on which the Issuer or any affiliate of the Issuer was the owner of such Notes (or any predecessor thereto) (the “ Resale Restriction Termination Date ”) only (a) to the Issuer, (b) pursuant to a registration statement that has been declared effective under the Securities Act, (c) in a transaction complying with the requirements of Rule 144A under the Securities Act (“ Rule 144A ”), to a person or entity we reasonably believe is a qualified institutional buyer under Rule 144A (a “ QIB ”) that is purchasing for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act, (e) to an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing for its own account or for the account of such an institutional “accredited investor,” in each case in a minimum principal amount of Notes of $250,000, or (f) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Notes is proposed to be made pursuant to clause (e) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuer and the Trustee, which shall provide, among other things, that the transferee is an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Notes for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Issuer and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Notes pursuant to clause (d), (e) or (f) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Issuer and the Trustee.

 

TRANSFEREE:___________________,        
by:    
 

 

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Exhibit D

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY FUTURE NOTE GUARANTORS

Supplemental Indenture (this “ Supplemental Indenture ”), dated as of _____________, among ________ (the “ Guaranteeing Subsidiary ”), a subsidiary of Realogy Corporation, a Delaware corporation (the “ Issuer ”), and The Bank of New York Mellon Trust Company, N.A., as trustee (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, each of the Issuer, Holdings and the Note Guarantors (as defined in the Indenture referred to below) has heretofore executed and delivered to the Trustee an indenture (the “ Indenture ”), dated as of January 5, 2011, providing for the issuance of an unlimited aggregate principal amount of 11.50% Senior Notes due 2017 (the “ Notes ”);

WHEREAS, the Section 4.15 of the Indenture provides that under certain circumstances the Issuer is required to cause the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Issuer, the Trustee and the Guaranteeing Subsidiary are authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee . The Guaranteeing Subsidiary hereby agrees as follows:

(a) Along with Holdings and all Note Guarantors named in the Indenture or any supplemental indenture, to jointly and severally unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that:

(i) the principal of, premium, if any or interest or Additional Interest, if any, on the Notes will be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder whether for payment of principal of, premium, if any, or interest on the Notes and all other monetary obligations of the Issuer under the Indenture and the Notes will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

(ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so


guaranteed or any performance so guaranteed for whatever reason, Holdings, the Note Guarantors and the Guaranteeing Subsidiary shall be jointly and severally obligated to pay the same immediately. This is a guarantee of payment and not a guarantee of collection.

(b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, the Indenture, the Holdings Guarantee or any other Note Guarantee, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, Holdings or any Note Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor.

(c) The following is hereby waived: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of either of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever.

(d) This Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, the Indenture and this Supplemental Indenture, and the Guaranteeing Subsidiary accepts all obligations of a Note Guarantor under the Indenture.

(e) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, Holdings, the Note Guarantors (including the Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer, Holdings or the Note Guarantors, any amount paid either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(f) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(g) As between the Guaranteeing Subsidiary, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guaranteeing Subsidiary for the purpose of this Note Guarantee.

(h) The Guaranteeing Subsidiary shall have the right to seek contribution from Holdings or any non-paying Note Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Note Guarantee.

(i) Pursuant to Section 10.02 of the Indenture, after giving effect to all other contingent and fixed liabilities that are relevant under any applicable Bankruptcy Law or fraudulent conveyance laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of Holdings or any other Note Guarantor in respect of the obligations of Holdings or such other Note Guarantor under Article 10 or Article 11 of the Indenture, this new Note Guarantee shall be limited to the maximum amount permissible such that the obligations of such Guaranteeing Subsidiary under this Note Guarantee will not

 

D-2


being voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

(j) This Note Guarantee shall be a continuing guarantee and shall (1) remain in full force and effect until payment in full of all the applicable obligations guaranteed hereby; (2) subject to Section 10.06 of the Indenture, be binding upon the Guaranteeing Subsidiary and its successors; and (3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

(k) This Note Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer, Holdings or any Note Guarantor for liquidation or reorganization, should the Issuer, Holdings or any Note Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s, Holdings’ or any Note Guarantor’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, the Holdings Guarantee or Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(l) In case any provision of this Note Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(m) This Note Guarantee shall be a general unsecured senior obligation of such Guaranteeing Subsidiary, ranking pari passu with all existing and future Senior Pari Passu Indebtedness of the Guaranteeing Subsidiary, if any.

(n) Each payment to be made by the Guaranteeing Subsidiary in respect of this Note Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

(3) Execution and Delivery . The Guaranteeing Subsidiary agrees that the Note Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Note Guarantee on the Notes.

(4) Merger, Consolidation or Sale of All or Substantially All Assets .

(a) Except as otherwise provided in Section 5.01(b) of the Indenture, the Guaranteeing Subsidiary may not, and the Issuer will not permit the Guaranteeing Subsidiary to, consolidate, amalgamate or merge with or into or wind up into (whether or not the Guaranteeing Subsidiary is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(i) either (a) such Guaranteeing Subsidiary is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Guaranteeing Subsidiary) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Guaranteeing

 

D-3


Subsidiary or such Person, as the case may be, being herein called the “ Successor Note Guarantor ”) and the Successor Note Guarantor (if other than the Guaranteeing Subsidiary) expressly assumes all the obligations of the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s applicable Note Guarantee pursuant to a supplemental indenture or other documents or instruments in form reasonably satisfactory to the Trustee, or (b) such sale or disposition or consolidation, amalgamation or merger is not in violation of Section 4.10 of the Indenture;

(ii) the Successor Note Guarantor (if other than the Guaranteeing Subsidiary) shall have delivered or caused to be delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with the Indenture; and

(iii) immediately after such transaction, no Default or Event of Default exists.

(b) Except as otherwise provided in the Indenture, the Successor Note Guarantor (if other than the Guaranteeing Subsidiary) will succeed to, and be substituted for, the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s applicable Note Guarantee, and the Guaranteeing Subsidiary will automatically be released and discharged from its obligations under the Indenture and the Guaranteeing Subsidiary’s applicable Note Guarantee, but in the case of a lease of all or substantially all of its assets, the Guaranteeing Subsidiary will not be released from its obligations under the Note Guarantee. Notwithstanding the foregoing, (1) a Guaranteeing Subsidiary may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating the Guaranteeing Subsidiary in another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness, Preferred Stock and Disqualified Stock of the Guaranteeing Subsidiary is not increased thereby and (2) a Guaranteeing Subsidiary may merge, amalgamate or consolidate with another Guaranteeing Subsidiary or the Issuer.

(c) In addition, notwithstanding the foregoing, the Guaranteeing Subsidiary may consolidate, amalgamate or merge with or into or wind up into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a “ Transfer ”) to (x) the Issuer or any Note Guarantor or (y) any Restricted Subsidiary that is not a Note Guarantor; provided that at the time of each such Transfer pursuant to clause (y) the aggregate amount of all such Transfers since the Original Issue Date shall not exceed the greater of $625.0 million and 5.0% of Total Assets after giving effect to each such Transfer and including all Transfers of the Guaranteeing Subsidiary and the Note Guarantors occurring from and after the Original Issue Date (excluding Transfers in connection with the Merger Transactions).

(5) Releases .

The Note Guarantee of the Guaranteeing Subsidiary shall be automatically and unconditionally released and discharged, and no further action by the Guaranteeing Subsidiary, the Issuer or the Trustee is required for the release of the Guaranteeing Subsidiary’s Guarantee, upon:

(1)(a) the sale, disposition or other transfer (including through merger or consolidation) of the Capital Stock (including any sale, disposition or other transfer following which the Guaranteeing Subsidiary is no longer a Restricted Subsidiary), of the Guaranteeing Subsidiary if such sale, disposition or other transfer is made in compliance with the applicable provisions of the Indenture;

(b) the Issuer designating the Guaranteeing Subsidiary to be an Unrestricted Subsidiary in accordance with the provisions set forth under Section 4.07 of the Indenture and the definition of “Unrestricted Subsidiary”;

 

D-4


(c) the release or discharge of such Restricted Subsidiary from (x) its guarantee of Indebtedness under the Credit Agreement (including by reason of the termination of the Credit Agreement) and/or (y) the guarantee of Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer or such Restricted Subsidiary or the repayment of the Indebtedness or Disqualified Stock (except in each case a discharge or release by or as a result of payment under such guarantee) that resulted in the obligation to guarantee the Notes, in the case of each of clauses (x) and (y) if the Guaranteeing Subsidiary would not then otherwise be required to guarantee the Notes pursuant to the Indenture; provided , that if such Person has incurred any Indebtedness or issued any Disqualified Stock in reliance on its status as a Note Guarantor under Section 4.09 of the Indenture, the Guaranteeing Subsidiary’s obligations under such Indebtedness or Disqualified Stock, as the case may be, so Incurred are satisfied in full and discharged or are otherwise permitted to be Incurred under Section 4.09 of the Indenture; or

(d) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 of the Indenture or the Issuer’s obligations under the Indenture being discharged in accordance with the terms of the Indenture; and

(2) in the case of clause (1)(a) above, the release of the Guaranteeing Subsidiary from its guarantee, if any, of, and all pledges and security, if any, granted in connection with, the Credit Agreement and any other Indebtedness of the Issuer or any Restricted Subsidiary.

In addition, a Note Guarantee will be automatically released upon the Guaranteeing Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest securing Bank Indebtedness or other exercise of remedies in respect thereof.

(6) No Recourse Against Others . No director, officer, employee, manager, incorporator or holder of any Equity Interests of the Guaranteeing Subsidiary or any direct or indirect parent, as such, shall have any liability for any obligations of the Issuer or the Note Guarantors under the Notes, the Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(7) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(8) Counterparts/Originals . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

(9) Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction hereof.

(10) The Trustee . The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary.

(11) Subrogation . The Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by the Guaranteeing Subsidiary pursuant to the provisions of Section 2 hereof and Section 10.01 of the Indenture; provided that, if an Event of Default has occurred and is continuing, the Guaranteeing Subsidiary shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under the Indenture or the Notes shall have been paid in full.

 

D-5


(12) Benefits Acknowledged . The Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. The Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Note Guarantee are knowingly made in contemplation of such benefits.

(13) Successors . All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in Section 2(k) hereof or elsewhere in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

 

D-6


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

 

[GUARANTEEING SUBSIDIARY]
By:    
  Name:
  Title:

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:    
  Name:
  Title:

 

D-7

Exhibit 4.61

 

 

 

INDENTURE

Dated as of January 5, 2011

Among

REALOGY CORPORATION,

DOMUS HOLDINGS CORP.,

THE NOTE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Trustee

12.00% SENIOR NOTES DUE 2017

 

 

 


CROSS-REFERENCE TABLE*

 

TIA Section

   Indenture Section

310(a)(1)

   7.10

      (a)(2)

   7.10

      (a)(3)

   N.A.

      (a)(4)

   N.A.

      (a)(5)

   7.10

      (b)

   7.10

      (c)

   N.A.

311(a)

   7.11

      (b)

   7.11

      (c)

   N.A.

312(a)

   2.05

      (b)

   14.03

      (c)

   14.03

313(a)

   7.06

      (b)(1)

   N.A.

      (b)(2)

   7.06;7.07

      (c)

   7.06;14.02

      (d)

   7.06

314(a)

   4.03; 4.04; 14.02; 14.05

      (b)

   N.A.

      (c)(1)

   14.04

      (c)(2)

   14.04

      (c)(3)

   N.A.

      (d)

   N.A.

      (e)

   14.05

      (f)

   N.A.

315(a)

   7.01

      (b)

   7.05;14.02

      (c)

   7.01

      (d)

   7.01

      (e)

   6.14

316(a)(last sentence)

   2.09

      (a)(1)(A)

   6.05

      (a)(1)(B)

   6.04

      (a)(2)

   N.A.

      (b)

   6.07

      (c)

   2.12;9.04

317(a)(1)

   6.08

      (a)(2)

   6.12

      (b)

   2.04

318(a)

   14.01

      (b)

   N.A.

      (c)

   14.01

N.A. means not applicable.

* This Cross-Reference Table is not part of the Indenture.


TABLE OF CONTENTS

 

          Page  

ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE

     1   

Section 1.01.

  

Definitions

     1   

Section 1.02.

  

Other Definitions

     44   

Section 1.03.

  

Incorporation by Reference of TIA

     46   

Section 1.04.

  

Rules of Construction

     47   

Section 1.05.

  

Acts of Holders

     48   

ARTICLE 2 THE NOTES

     49   

Section 2.01.

  

Form and Dating; Terms

     49   

Section 2.02.

  

Execution and Authentication

     50   

Section 2.03.

  

Registrar and Paying Agent

     50   

Section 2.04.

  

Paying Agent to Hold Money in Trust

     50   

Section 2.05.

  

Holder Lists

     51   

Section 2.06.

  

Transfer and Exchange

     51   

Section 2.07.

  

Replacement Notes

     52   

Section 2.08.

  

Outstanding Notes

     52   

Section 2.09.

  

Treasury Notes

     53   

Section 2.10.

  

Temporary Notes

     53   

Section 2.11.

  

Cancellation

     53   

Section 2.12.

  

Defaulted Interest

     53   

Section 2.13.

  

CUSIP Numbers

     54   

Section 2.14.

  

Calculation of Principal Amount of Notes

     54   

ARTICLE 3 REDEMPTION

     54   

Section 3.01.

  

Notices to Trustee

     54   

Section 3.02.

  

Selection of Notes to Be Redeemed or Purchased

     54   

Section 3.03.

  

Notice of Redemption

     55   

Section 3.04.

  

Effect of Notice of Redemption

     56   

Section 3.05.

  

Deposit of Redemption or Purchase Price

     56   

Section 3.06.

  

Notes Redeemed or Purchased in Part

     56   

Section 3.07.

  

Optional Redemption

     57   

Section 3.08.

  

Mandatory Redemption

     58   

Section 3.09.

  

Offers to Repurchase by Application of Excess Proceeds

     58   

ARTICLE 4 COVENANTS

     60   

Section 4.01.

  

Payment of Notes

     60   

Section 4.02.

  

Maintenance of Office or Agency

     60   

Section 4.03.

  

Reports and Other Information

     60   

Section 4.04.

  

Compliance Certificate

     62   

Section 4.05.

  

Taxes

     62   

Section 4.06.

  

Stay, Extension and Usury Laws

     62   

Section 4.07.

  

Limitation on Restricted Payments

     62   

Section 4.08.

  

Dividend and Other Payment Restrictions Affecting Subsidiaries

     68   

 

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          Page  

Section 4.09.

  

Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock

     70   

Section 4.10.

  

Asset Sales

     76   

Section 4.11.

  

Transactions with Affiliates

     78   

Section 4.12.

  

Liens

     81   

Section 4.13.

  

Corporate Existence

     81   

Section 4.14.

  

Offer to Repurchase Upon Change of Control

     81   

Section 4.15.

  

Future Note Guarantors

     84   

Section 4.16.

  

Limitation on Repayments of Existing Notes

     84   

Section 4.17.

  

Suspension of Certain Covenants

     84   

ARTICLE 5 SUCCESSORS

     85   

Section 5.01.

  

Merger, Amalgamation Consolidation or Sale of All or Substantially All Assets

     85   

Section 5.02.

  

Successor Entity Substituted

     88   

ARTICLE 6 DEFAULTS AND REMEDIES

     88   

Section 6.01.

  

Events of Default

     88   

Section 6.02.

  

Acceleration

     90   

Section 6.03.

  

Other Remedies

     90   

Section 6.04.

  

Waiver of Past Defaults

     91   

Section 6.05.

  

Control by Majority

     91   

Section 6.06.

  

Limitation on Suits

     91   

Section 6.07.

  

Rights of Holders of Notes to Receive Payment

     91   

Section 6.08.

  

Collection Suit by Trustee

     92   

Section 6.09.

  

Restoration of Rights and Remedies

     92   

Section 6.10.

  

Rights and Remedies Cumulative

     92   

Section 6.11.

  

Delay or Omission Not Waiver

     92   

Section 6.12.

  

Trustee May File Proofs of Claim

     92   

Section 6.13.

  

Priorities

     93   

Section 6.14.

  

Undertaking for Costs

     93   

ARTICLE 7 TRUSTEE

     93   

Section 7.01.

  

Duties of Trustee

     93   

Section 7.02.

  

Rights of Trustee

     94   

Section 7.03.

  

Individual Rights of Trustee

     96   

Section 7.04.

  

Trustee’s Disclaimer

     96   

Section 7.05.

  

Notice of Defaults

     96   

Section 7.06.

  

Reports by Trustee to Holders of the Notes

     96   

Section 7.07.

  

Compensation and Indemnity

     97   

Section 7.08.

  

Replacement of Trustee

     97   

Section 7.09.

  

Successor Trustee by Merger, etc.

     98   

Section 7.10.

  

Eligibility; Disqualification

     98   

Section 7.11.

  

Preferential Collection of Claims Against the Issuer

     98   

ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE

     99   

Section 8.01.

  

Option to Effect Legal Defeasance or Covenant Defeasance

     99   

 

-ii-


          Page  

Section 8.02.

  

Legal Defeasance and Discharge

     99   

Section 8.03.

  

Covenant Defeasance

     99   

Section 8.04.

  

Conditions to Legal or Covenant Defeasance

     100   

Section 8.05.

  

Deposited Money and Government Obligations to Be Held in Trust; Other Miscellaneous Provisions

     101   

Section 8.06.

  

Repayment to the Issuer

     102   

Section 8.07.

  

Reinstatement

     102   

ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER

     102   

Section 9.01.

  

Without Consent of Holders of Notes

     102   

Section 9.02.

  

With Consent of Holders of Notes

     103   

Section 9.03.

  

Compliance with TIA

     105   

Section 9.04.

  

Revocation and Effect of Consents

     105   

Section 9.05.

  

Notation on or Exchange of Notes

     105   

Section 9.06.

  

Trustee to Sign Amendments, etc.

     106   

ARTICLE 10 NOTE GUARANTEES

     106   

Section 10.01.

  

Note Guarantee

     106   

Section 10.02.

  

Limitation on Note Guarantor Liability

     108   

Section 10.03.

  

Execution and Delivery

     108   

Section 10.04.

  

Subrogation

     108   

Section 10.05.

  

Benefits Acknowledged

     109   

Section 10.06.

  

Release of Note Guarantees

     109   

Section 10.07.

  

Securitization Acknowledgement

     110   

ARTICLE 11 HOLDINGS GUARANTEE

     111   

Section 11.01.

  

Holdings Guarantee

     111   

Section 11.02.

  

Limitation on Holdings Liability

     113   

Section 11.03.

  

Execution and Delivery

     113   

Section 11.04.

  

Subrogation

     113   

Section 11.05.

  

Benefits Acknowledged

     114   

Section 11.06.

  

Release of Holdings Guarantee

     114   

ARTICLE 12 SUBORDINATION OF HOLDINGS GUARANTEE

     114   

Section 12.01.

  

Agreement To Subordinate

     114   

Section 12.02.

  

Liquidation, Dissolution, Bankruptcy

     114   

Section 12.03.

  

Default on Holdings Senior Indebtedness

     115   

Section 12.04.

  

Demand for Payment

     116   

Section 12.05.

  

When Distribution Must Be Paid Over

     116   

Section 12.06.

  

Subrogation

     116   

Section 12.07.

  

Relative Rights

     116   

Section 12.08.

  

Subordination May Not Be Impaired by Holdings

     117   

Section 12.09.

  

Rights of Trustee and Paying Agent

     117   

Section 12.10.

  

Distribution or Notice to Holdings Representative

     118   

Section 12.11.

  

Article 12 Not To Prevent Events of Default or Limit Right To Demand Payment

     118   

Section 12.12.

  

Trust Moneys Not Subordinated

     118   

 

-iii-


          Page  

Section 12.13.

  

Trustee Entitled To Rely

     118   

Section 12.14.

  

Trustee To Effectuate Subordination

     118   

Section 12.15.

  

Trustee Not Fiduciary for Holders of Holdings Senior Indebtedness

     119   

Section 12.16.

  

Reliance by Holders of Holdings Senior Indebtedness on Subordination Provisions

     119   

ARTICLE 13 SATISFACTION AND DISCHARGE

     119   

Section 13.01.

  

Satisfaction and Discharge

     119   

Section 13.02.

  

Application of Trust Money

     120   

ARTICLE 14 MISCELLANEOUS

     120   

Section 14.01.

  

TIA Controls

     120   

Section 14.02.

  

Notices

     120   

Section 14.03.

  

Communication by Holders of Notes with Other Holders of Notes

     122   

Section 14.04.

  

Certificate and Opinion as to Conditions Precedent

     122   

Section 14.05.

  

Statements Required in Certificate or Opinion

     122   

Section 14.06.

  

Rules by Trustee and Agents

     122   

Section 14.07.

  

No Personal Liability of Directors, Officers, Employees and Stockholders

     123   

Section 14.08.

  

Governing Law

     123   

Section 14.09.

  

Waiver of Jury Trial

     123   

Section 14.10.

  

Force Majeure

     123   

Section 14.11.

  

No Adverse Interpretation of Other Agreements

     123   

Section 14.12.

  

Successors

     123   

Section 14.13.

  

Severability

     123   

Section 14.14.

  

Counterpart Originals

     124   

Section 14.15.

  

Table of Contents, Headings, etc.

     124   

Section 14.16.

  

Qualification of Indenture

     124   

Section 14.17.

  

Designated Senior Indebtedness

     124   

Appendix A

   Provisions Relating to Initial Notes, Additional Notes and Exchange Notes   

 

Exhibit A

  

Form of Initial Note

Exhibit B

  

Form of Exchange Note

Exhibit C

  

Form of Transferee Letter of Representation

Exhibit D

  

Form of Supplemental Indenture to Be Delivered by Future Note Guarantors

 

-iv-


INDENTURE, dated as of January 5, 2011, among Realogy Corporation, a Delaware corporation (the “ Issuer ”), Domus Holdings Corp., a Delaware corporation and the indirect parent of the Issuer (“ Holdings ”), the Note Guarantors (as defined herein) listed on the signature pages hereto and The Bank of New York Mellon Trust Company, N.A., as Trustee.

W I T N E S S E T H

WHEREAS, in connection with the Existing Notes Exchange Offer (as defined herein), the Issuer has duly authorized the creation of and issue of $129,579,297 aggregate principal amount of 12.00% Senior Notes due 2017 (the “ Initial Notes ”); and

WHEREAS, the Issuer, Holdings and each of the Note Guarantors has duly authorized the execution and delivery of this Indenture.

NOW, THEREFORE, the Issuer, Holdings, the Note Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Notes.

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01.  Definitions.

Acquired Indebtedness ” means, with respect to any specified Person:

(1) Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging, consolidating or amalgamating with or into or becoming a Restricted Subsidiary of such specified Person, and

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

Additional Interest ” means all additional interest then owing pursuant to the Registration Rights Agreement.

Additional Notes ” means additional Notes (other than the Initial Notes and other than Exchange Notes for such Initial Notes) issued from time to time under this Indenture in accordance with Sections 2.01 and 4.09 hereof.

Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

Agent ” means any Registrar and Paying Agent.

Apple Ridge Documents ” means the Transfer and Servicing Agreement, dated as of April 25, 2000, as amended, by and among Apple Ridge Services Corporation, Cartus Corporation,


Cartus Financial Corporation, Apple Ridge Funding LLC and The Bank of New York Mellon (formerly known as The Bank of New York) (the “ Transfer and Servicing Agreement ”), the Receivables Purchase Agreement, dated as of April 25, 2000, as amended, by and between Cartus Financial Corporation and Apple Ridge Services Corporation (the “ Receivables Purchase Agreement ”), the Purchase Agreement, dated as of April 25, 2000, as amended, by and between Cartus Corporation and Cartus Financial Corporation (the “ Purchase Agreement ”), the Amended and Restated Note Purchase Agreement, dated as of April 10, 2007, as amended and restated as of July 6, 2007, by and among Apple Ridge Funding LLC, Cartus Corporation, Credit Agricole Corporate and Investment Bank, New York Branch (formerly known as Calyon New York Branch) and the Conduit Purchasers, Committed Purchasers and Managing Agents from time to time parties thereto, the Master Indenture, April 25, 2000, as amended, by and between Apple Ridge Funding LLC and The Bank of New York Mellon, the Amended and Restated Series 2007-1 Indenture Supplement, dated as of April 10, 2007, as amended and restated as of July 6, 2007, by and between Apple Ridge Funding LLC and The Bank of New York Mellon, the Performance Guaranty, dated as of May 12, 2006, as amended by the Fifth Omnibus Amendment dated as of April 10, 2007, by Realogy Corporation in favor of Apple Ridge Funding, LLC and Cartus Financial Corporation, and each other agreement or other document contemplated by or entered into in connection with and/or in replacement of the foregoing, each as amended, restated, refinanced, modified or supplemented on or prior to the Issue Date.

Applicable Insurance Regulatory Authority ” means, when used with respect to any Insurance Subsidiary, the insurance department or similar administrative authority or agency located in (x) the state or other jurisdiction in which such Insurance Subsidiary is domiciled or (y) to the extent asserting regulatory jurisdiction over such Insurance Subsidiary, the insurance department, authority or agency in each state or other jurisdiction in which such Insurance Subsidiary is licensed, and shall include any Federal insurance regulatory department, authority or agency that may be created in the future and that asserts regulatory jurisdiction over such Insurance Subsidiary.

Applicable Premium ” means, with respect to any Note on any applicable redemption date, the greater of:

(1) 1% of the then outstanding principal amount of the Note; and

(2) the excess of:

(a) the present value at such redemption date of (i) the redemption price of the Note, at April 15, 2013 (such redemption price being set forth in Section 3.07) plus (ii) all required interest payments due on the Note through April 15, 2013 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over

(b) the then outstanding principal amount of the Note.

Arbitrage Programs ” means Indebtedness and Investments relating to operational escrow accounts of NRT or Title Resource Group or any of their Restricted Subsidiaries.

Asset Sale ” means:

(1) the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of a Sale/Leaseback Transaction) of the Issuer or any Restricted Subsidiary (each referred to in this definition as a “disposition”) or

 

-8-


(2) the issuance or sale of Equity Interests (other than directors’ qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any Restricted Subsidiary (other than to the Issuer or another Restricted Subsidiary and other than the issuance of Preferred Stock of a Non-Guarantor Subsidiary issued in compliance with Section 4.09) (whether in a single transaction or a series of related transactions),

in each case other than:

(a) a disposition of Cash Equivalents or Investment Grade Securities or damaged, obsolete or worn out property or equipment in the ordinary course of business;

(b) the disposition of all or substantially all of the assets of the Issuer in a manner permitted pursuant to the provisions described under Section 5.01 hereof or any disposition that constitutes a Change of Control;

(c) any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 4.07;

(d) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary, which assets or Equity Interests so disposed or issued have an aggregate Fair Market Value of less than $25.0 million in any one transaction or series of related transactions;

(e) any disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary to the Issuer or by the Issuer or a Restricted Subsidiary to a Restricted Subsidiary;

(f) any exchange of assets (including a combination of assets and Cash Equivalents) for assets related to a Similar Business of comparable or greater market value or usefulness to the business of the Issuer and the Restricted Subsidiaries as a whole, as determined in good faith by the senior management or the Board of Directors of the Issuer;

(g) foreclosure on assets of the Issuer or any of the Restricted Subsidiaries;

(h) any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(i) the lease, assignment or sublease of any real or personal property in the ordinary course of business;

(j) any sale of inventory or other assets in the ordinary course of business;

(k) grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property or franchise rights;

(l) in the ordinary course of business, any swap of assets, or any lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing arrangements) of comparable or greater value or usefulness to the business of the Issuer and the Restricted Subsidiaries taken as a whole, as determined in good faith by senior management or the Board of Directors of the Issuer; provided , that any cash or Cash Equivalents received must be applied in accordance with Section 4.10;

 

-9-


(m) any financing transaction with respect to property built or acquired by the Issuer or any Restricted Subsidiary after the Issue Date, including any Sale/Leaseback Transaction or asset securitization permitted by this Indenture;

(n) any surrender or waiver of contract rights or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;

(o) a sale or other transfer of Securitization Assets or interests therein pursuant to a Permitted Securitization Financing;

(p) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and not as part of a Permitted Securitization Financing;

(q) dispositions in connection with Permitted Liens or Liens to secure the Notes in accordance with the terms of this Indenture;

(r) sales or other dispositions of Equity Interests in Existing Joint Ventures; and

(s) any disposition of Investments in connection with the Arbitrage Programs.

Bank Indebtedness ” means any and all amounts payable under or in respect of the Credit Agreement and the other Credit Agreement Documents as amended, restated, supplemented, waived, replaced, restructured, repaid, refunded, refinanced or otherwise modified from time to time (including after termination of the Credit Agreement), including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Issuer whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof.

Bankruptcy Law ” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

beneficial ownership ” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as such term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire, whether such right is currently exercisable or is exercisable only after the passage of time.

Board of Directors ” means, as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.

Business Day ” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or the city in which the Trustee’s principal office is located.

Capital Stock ” means:

(1) in the case of a corporation or a company, corporate stock or shares;

 

-10-


(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

Capitalized Lease Obligation ” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

Cash Equivalents ” means:

(1) U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business;

(2) securities issued or directly and fully guaranteed or insured by the U.S. government or any country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;

(3) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250.0 million and whose long-term debt is rated “A” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);

(4) repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5) commercial paper issued by a corporation (other than an Affiliate of the Issuer) rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency if both of the two named rating agencies cease publishing ratings of investments) and in each case maturing within one year after the date of acquisition;

(6) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency if both of the two named rating agencies cease publishing ratings of investments) in each case with maturities not exceeding two years from the date of acquisition;

(7) Indebtedness issued by Persons (other than the Permitted Holders or any of their Affiliates) with a rating of “A” or higher from S&P or “A-2” or higher from Moody’s (or

 

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reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;

(8) investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above; and

(9) instruments equivalent to those referred to in clauses (1) through (8) above denominated in euros or any other foreign currency comparable in credit quality and tenor to those referred to above and commonly used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business conducted by any Subsidiary organized in such jurisdiction.

Cendant ” means Cendant Corporation, a Delaware corporation (now known as Avis Budget Group, Inc.).

Cendant Contingent Assets ” has the meaning assigned to “Cendant Contingent Asset” in the Separation and Distribution Agreement and shall also include any tax benefits and attributes allocated or inuring to the Issuer and its Subsidiaries under the Cendant Tax Sharing Agreement.

Cendant Contingent Liabilities ” has the meaning assigned to “Assumed Cendant Contingent Liabilities” in the Separation and Distribution Agreement and shall also include any liabilities that are related or attributable to or arising in connection with Taxes or Tax Returns (as each term is defined in the Cendant Tax Sharing Agreement).

Cendant Spin-Off ” means the distribution of all of the capital stock of the Issuer by Cendant to its stockholders and the transactions related thereto as described in that certain Information Statement of the Issuer dated July 13, 2006, as filed with the SEC.

Cendant Tax Sharing Agreement ” means the Tax Sharing Agreement, dated as of July 28, 2006, by and among Cendant, the Issuer, Wyndham Worldwide Corporation and Travelport Inc., as amended on or prior to the date of the Offering Memorandum.

Change of Control ” means the occurrence of any of the following:

(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of the Issuer and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or

(2) the Issuer becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of the Issuer or any direct or indirect parent of the Issuer. Notwithstanding the foregoing, a Specified Merger/Transfer Transaction shall not constitute a Change of Control.

Code ” means the Internal Revenue Code of 1986, as amended.

 

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Consolidated Interest Expense ” means, with respect to any Person for any period, the sum, without duplication, of:

(1) consolidated interest expense of such Person and the Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount and bond premium, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations ( provided, however , that if interest rate Hedging Obligations result in net benefits rather than costs, such benefits shall be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such net benefits are otherwise reflected in Consolidated Net Income) and excluding additional interest in respect of the Notes, amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and expensing of any bridge commitment or other financing fees); plus

(2) consolidated capitalized interest of such Person and the Restricted Subsidiaries for such period, whether paid or accrued; plus

(3) commissions, discounts, yield and other fees and charges Incurred in connection with any Permitted Securitization Financing to the extent such amounts have not been deducted in the presentation of consolidated revenues of such Person; minus

(4) interest income for such period.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

Consolidated Leverage Ratio ” means, with respect to any Person at any date, the ratio of (i) the aggregate amount of all outstanding Indebtedness and Disqualified Stock of such Person and its Restricted Subsidiaries and Preferred Stock of Non-Guarantor Subsidiaries of such Person as of such date (determined on a consolidated basis in accordance with GAAP) less the amount of cash and Cash Equivalents (other than cash and Cash Equivalents of Special Purpose Securitization Subsidiaries) in excess of any Restricted Cash that would be stated on the balance sheet of such Person and its Restricted Subsidiaries as of such date of determination to (ii) EBITDA of such Person for the four full fiscal quarters for which internal financial statements are available immediately preceding such date. In the event that the Issuer or any of the Restricted Subsidiaries Incurs or redeems any Indebtedness or issues or redeems Disqualified Stock or any Non-Guarantor Subsidiary issues or redeems Preferred Stock subsequent to the commencement of the period for which the Consolidated Leverage Ratio is being calculated but on or prior to or simultaneously with the event for which the calculation of the Consolidated Leverage Ratio is made (the “Consolidated Leverage Calculation Date”), then the Consolidated Leverage Ratio shall be calculated giving pro forma effect to such Incurrence or such issuance or redemption of Disqualified Stock or Preferred Stock or redemption of Indebtedness, as if the same had occurred at the beginning of the applicable four-quarter period; provided that the Issuer may elect, pursuant to an Officer’s Certificate delivered to the Trustee, that all or any portion of the commitment under any Indebtedness as being Incurred at the time such commitment is entered into and any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time. Notwithstanding the foregoing and for purposes of this calculation, the aggregate principal amount of Indebtedness shall be calculated without giving effect to purchase accounting adjustments.

 

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For purposes of making the computation referred to above, Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to a company, operating unit, division, segment, business, group of assets or lines of business, that the Issuer or any of the Restricted Subsidiaries has made after the Issue Date and during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Consolidated Leverage Calculation Date (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation, in each case with respect to an operating unit, division, segment, business, group of assets or lines of business that would have required adjustment pursuant to this definition, then the Consolidated Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period.

For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer.

Consolidated Net Income ” means, with respect to any Person for any period, without duplication, the aggregate of the Net Income of such Person and the Restricted Subsidiaries for such period, on a consolidated basis; provided, however , that:

(1) any net after-tax extraordinary, nonrecurring or unusual gains or losses or income, expenses or charges (less all fees and expenses relating thereto), including, without limitation, (i) severance expenses, relocation or other restructuring expenses, fees, expenses or charges related to plant, facility, store and office closures, consolidations, downsizings and/or shutdowns (including future lease commitments and contract termination costs with respect thereto), (ii) fees, expenses or charges Incurred in connection with the Cendant Spin-Off, (iii) expenses or charges related to curtailments or modifications to pension or other post-employment benefit plans, (iv) any fees, expenses or charges related to any Equity Offering, Permitted Investment, acquisition (including integration costs) or Indebtedness permitted to be Incurred by this Indenture (in each case, whether or not successful), including any such fees, expenses, tender premiums, charges or change in control payments made under the Merger Documents or otherwise related to the Merger Transactions (including any transition-related expenses Incurred prior to, on or after the Original Issue Date) and (v) any fees, expenses or charges related to the Existing Notes Exchange Offers, in each case, shall be excluded;

(2) any increase in amortization or depreciation or any one-time non-cash charges or increases or reductions in Net Income, in each case resulting from purchase accounting in connection with the Merger Transactions or any acquisition that is consummated after the Original Issue Date shall be excluded (including any acquisition by a third party, directly or indirectly, of the Issuer);

(3) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;

 

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(4) any net after-tax income or loss from abandoned, closed or discontinued operations and any net after-tax gains or losses on disposal of abandoned, closed or discontinued operations shall be excluded;

(5) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by senior management or the Board of Directors of the Issuer) shall be excluded;

(6) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of Indebtedness, Hedging Obligations and other derivative instruments shall be excluded;

(7) except with respect to joint ventures related to Title Resource Group and the Issuer’s mortgage origination business (whether conducted through PHH Home Loans, LLC or other joint ventures of the Issuer or its Restricted Subsidiaries), the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;

(8) solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of Cumulative Credit, the Net Income for such period of any Restricted Subsidiary (other than any Note Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;

(9) an amount equal to the amount of Tax Distributions actually made to any parent of such Person in respect of such period in accordance with Section 4.07(b)(12) shall be included as though such amounts had been paid as income taxes directly by such Person for such period;

(10) any non-cash impairment charges or asset write-offs and amortization of intangibles in each case arising pursuant to the application of GAAP shall be excluded;

(11) any (a) severance or relocation costs or expenses, (b) one-time non-cash compensation charges, (c) costs and expenses related to employment of terminated employees, (d) costs or expenses realized in connection with, resulting from or in anticipation of the Merger Transactions or (e) non-cash costs or expenses realized in connection with or resulting from employee benefit plans or post-employment benefit plans (including long-term incentive plans), stock appreciation or similar rights, stock options or other rights of officers, directors and employees, in each case of such Person or any of the Restricted Subsidiaries, shall be excluded;

(12) accruals and reserves that are established or adjusted within 12 months of the Original Issue Date, in each case, related to or as a result of the Merger Transactions and that are

 

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so required to be established or adjusted in accordance with GAAP, and changes in accruals and reserves as a result of the adoption or modification of accounting policies in connection with the Merger Transactions, shall be excluded;

(13) (a)(i) the non-cash portion of “straight-line” rent expense shall be excluded and (ii) the cash portion of “straight-line” rent expense which exceeds the amount expensed in respect of such rent expense shall be included and (b) non-cash gains, losses, income and expenses resulting from fair value accounting required by Accounting Standards Codification 815 (or successor rule) shall be excluded;

(14) unrealized gains and losses relating to hedging transactions and mark-to-market of Indebtedness denominated in foreign currencies resulting from the applications of Accounting Standards Codification 830 (or successor rule) shall be excluded;

(15) any currency translation gains and losses related to currency reimbursements of Indebtedness, and any net loss or gain resulting from Hedging Obligations for currency exchange risk, shall be excluded;

(16) solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of Cumulative Credit, the difference, if positive, of the Consolidated Taxes of the Issuer calculated in accordance with GAAP and the actual Consolidated Taxes paid in cash by the Issuer during any Reference Period shall be included;

(17) any expenses or income (including increases or reversals of reserves) relating to the Cendant Contingent Liabilities shall be excluded; and

(18) any income or other economic benefits accruing to the Issuer and its Subsidiaries pursuant to the Cendant Contingent Assets, whether in the form of cash or tax benefits shall be excluded, provided any economic benefits accruing to the Issuer and its Restricted Subsidiaries pursuant to assets out of or arising from payments to be received under Article III of the Tax Receivable Agreement dated as of February 22, 2005 by and among Cendant Corporation, Cendant Mobility Services Corporation and Wright Express Corporation shall be included.

Notwithstanding the foregoing, for the purpose of Section 4.07 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries or a Restricted Subsidiary to the extent such dividends, repayments, advances or transfers increase the amount of Restricted Payments permitted under Section 4.07 pursuant to clauses (5) and (6) of the definition of Cumulative Credit.

Consolidated Non-cash Charges ” means, with respect to any Person for any period, the aggregate depreciation, amortization and other non-cash expenses, including any deferred financing fees, write-offs or write-downs and amortization of expenses attributable to pending real estate brokerage transactions and property listings of Persons or operations acquired by such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP (provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA to such extent paid, and excluding amortization of a prepaid cash item that was paid in a prior period).

Consolidated Taxes ” means, with respect to any Person for any period, the provision for taxes based on income, profits or capital, including, without limitation, state, franchise and similar taxes,

 

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of such Person for such period on a consolidated basis and any Tax Distributions taken into account in calculating Consolidated Net Income.

Contingent Obligations ” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:

(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor;

(2) to advance or supply funds:

(a) for the purchase or payment of any such primary obligation; or

(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

Convertible Notes ” means, collectively, the Issuer’s 11.00% Series A Convertible Notes due 2018, 11.00% Series B Convertible Notes due 2018 and 11.00% Series C Convertible Notes due 2018.

Convertible Note Guarantee ” means any guarantee of the obligations of the Issuer under the Convertible Notes and the Convertible Note Indenture by any Person in accordance with the provisions of the Convertible Note Indenture.

Convertible Note Indenture ” means the indenture, dated as of the Issue Date, among the Issuer, Holdings, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, governing the Convertible Notes, as amended, supplemented or modified from time to time.

Corporate Trust Office of the Trustee ” means the designated office of the Trustee at which at any time its corporate trust business shall be administered, which office at the dated hereof is located at 525 William Penn Place, 38th Floor, Pittsburgh, PA 15259, Attention: Corporate Trust Administration, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

Credit Agreement ” means, collectively, (i) the credit agreement dated as of April 10, 2007, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof, among the Issuer, Domus Intermediate Holdings Corp., a Delaware limited liability company and the parent of the Issuer, as guarantor, the other guarantors named therein, the financial institutions named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent, and (ii) whether or

 

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not the credit agreement referred to in clause (i) remains outstanding, if designated by the Issuer to be included in the definition of “Credit Agreement,” one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, Permitted Securitization Financings (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers, guarantors or issuers or lenders or group of lenders, and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

Credit Agreement Documents ” means the collective reference to the Credit Agreement, any notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time.

Cumulative Credit ” means the sum of (without duplication):

(1) 50% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period, the “Reference Period”) from April 1, 2007 to the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit); provided, however that, to the extent the Consolidated Leverage Ratio of the Issuer on a pro forma basis as if the Restricted Payment had been made and any Indebtedness Incurred on such date had been Incurred would have been less than 3.0 to 1.0 and the Consolidated Net Income of the Issuer is positive, then 75% of the Consolidated Net Income of the Issuer for the aforementioned period shall be included pursuant to this clause (1), plus

(2) 100% of the aggregate net proceeds, including cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash, received by the Issuer after the Original Issue Date (other than net proceeds to the extent such net proceeds have been used to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 4.09(b)(19)) from the issue or sale of Equity Interests of the Issuer (excluding, without duplication, (i) Refunding Capital Stock, Designated Preferred Stock, Excluded Contributions and Disqualified Stock and (ii) any net cash proceeds of Equity Offerings to the extent used to redeem Notes in compliance with Section 3.07), including Equity Interests issued upon conversion of Indebtedness or Disqualified Stock or upon exercise of warrants or options (other than an issuance or sale to a Restricted Subsidiary of the Issuer), plus

(3) 100% of the aggregate amount of contributions to the capital of the Issuer received in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash received after the Original Issue Date (other than Refunding Capital Stock, Designated Preferred Stock, Excluded Contributions, Disqualified Stock and contributions to the extent such contributions have been used to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 4.09(b)(19)), plus

(4) the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of the Issuer or any Restricted Subsidiary issued after the Original Issue Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged

 

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for Equity Interests in the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer (provided that such Indebtedness or Disqualified Stock is retired or extinguished), plus

(5) 100% of the aggregate amount received by the Issuer or any Restricted Subsidiary in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash received by the Issuer or any Restricted Subsidiary from:

(A) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of Restricted Investments made by the Issuer and the Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from the Issuer and the Restricted Subsidiaries by any Person (other than the Issuer or any of the Restricted Subsidiaries) and from repayments of loans or advances (including the release of any guarantee that constituted a Restricted Investment when made) that constituted Restricted Investments (other than, in each case, to the extent that the Restricted Investment was made pursuant to clause (7) or (10) of Section 4.07(b)),

(B) the sale (other than to the Issuer or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary (other than an Unrestricted Subsidiary to the extent the investments in such Unrestricted Subsidiary was made by the Issuer or a Restricted Subsidiary pursuant to clause (7) or (10) of Section 4.07(b) or to the extent such Investment constituted a Permitted Investment), or

(C) a distribution or dividend from an Unrestricted Subsidiary, plus

(6) in the event any Unrestricted Subsidiary has been re-designated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary, the Fair Market Value (as determined in accordance with the next succeeding sentence) of the Investment of the Issuer in such Unrestricted Subsidiary at the time of such re-designation, combination or transfer (or of the assets transferred or conveyed, as applicable), after taking into account any Indebtedness associated with the Unrestricted Subsidiary so designated or combined or any Indebtedness associated with the assets so transferred or conveyed (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to clause (7) or (10) of Section 4.07(b) or constituted a Permitted Investment).

The Fair Market Value of property, other than cash, covered by clauses (2), (3), (5) and (6) of this definition of “Cumulative Credit” shall be determined in good faith by the Issuer, and

(1) in the case of property with a Fair Market Value in excess of $30.0 million, shall be set forth in an Officer’s Certificate or

(2) in the case of property with a Fair Market Value in excess of $60.0 million, shall be set forth in a resolution approved by at least a majority of the Board of Directors of the Issuer.

Custodian ” means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.

Dealer Managers ” means J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC and Goldman, Sachs & Co.

 

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Default ” means any event which is, or after notice or passage of time or both would be, an Event of Default.

Definitive Note ” means a certificated Initial Note, Additional Note or Exchange Note (bearing the Restricted Notes Legend if the transfer of such Note is restricted by applicable law) that does not include the Global Notes Legend.

Delayed Draw Term Lender ” shall mean a lender under the Credit Agreement with a Delayed Draw Term Loan Commitment or an outstanding Delayed Draw Term Loan.

Delayed Draw Term Loan ” shall mean the term loan made by one or more Delayed Draw Term Lenders pursuant to the terms of the Credit Agreement if and only to the extent that (i) such term loan was permitted under the Existing Indentures as in effect immediately prior to the Issue Date as “Refinancing Indebtedness” (as defined therein) in respect of Secured Indebtedness of the Issuer and its Restricted Subsidiaries that was existing on the Original Issue Date, (ii) such refinanced Secured Indebtedness was permitted under the Existing Indentures on the Original Issue Date under clause 4.09(b)(3) of each of the Existing Indentures and was not outstanding under the Credit Agreement as of the Original Issue Date and (iii) the aggregate principal amount of all such Delayed Draw Term Loans does not exceed $1.2 billion.

Delayed Draw Term Loan Commitment ” shall mean, with respect to each Delayed Draw Term Lender, the commitment of such lender to make Delayed Draw Term Loans to the Issuer after the closing date of the Credit Agreement in accordance with the terms thereof.

Depositary ” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

Designated Non-cash Consideration ” means the Fair Market Value of non-cash consideration received by the Issuer or one of the Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate, setting forth the basis of such valuation, executed by the principal financial officer of the Issuer, less the amount of Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.

Designated Preferred Stock ” means Preferred Stock of the Issuer or any direct or indirect parent of the Issuer (in each case other than Disqualified Stock), that is issued for cash (other than to the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in the definition of “Cumulative Credit”.

Disqualified Stock ” means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable, putable or exchangeable), or upon the happening of any event:

(1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale; provided that the relevant asset sale or change of control provisions, taken as a whole, are no more favorable in any material respect to holders of such Capital Stock than the asset sale and change of control provisions applicable to the Notes and any purchase requirement triggered thereby may not become

 

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operative until compliance with the asset sale and change of control provisions applicable to the Notes (including the purchase of any Notes tendered pursuant thereto)),

(2) is convertible or exchangeable at the option of the holder thereof for Indebtedness or Disqualified Stock of such Person, or

(3) is redeemable at the option of the holder thereof, in whole or in part,

in each case prior to 91 days after the maturity date of the Notes; provided, however, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable at the option of the holder thereof or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided , further, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the Issuer or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Issuer in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; provided , further, that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

Domestic Subsidiary ” means a Restricted Subsidiary that is not a Foreign Subsidiary.

EBITDA ” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication, to the extent the same was deducted in calculating Consolidated Net Income:

(1) Consolidated Taxes; plus

(2) Consolidated Interest Expense; plus

(3) Consolidated Non-cash Charges; plus

(4) business optimization expenses and other restructuring charges, expenses or reserves (which, for the avoidance of doubt, shall include, without limitation, the effect of retention, systems establishment costs, curtailments or modifications to pension and post retirement employee benefit plans that result in pension settlement charges); provided that with respect to each business optimization expense or other restructuring charge or reserve, the Issuer shall have delivered to the Trustee an Officer’s Certificate specifying and quantifying such expense, charge or reserve and stating that such expense, charge or reserve is a business optimization expense or other restructuring charge or reserve, as the case may be; plus

(5) the amount of management, monitoring, consulting, transaction and advisory fees and related expenses paid to the Sponsors (or any accruals relating to such fees and related expenses) during such period pursuant to the terms of the agreements between the Sponsors and the Issuer and its Subsidiaries as in effect on the Original Issue Date; provided that such amount shall not exceed the amount permitted to be paid to the Sponsors pursuant to Section 4.11(b)(3); plus

(6) all add backs reflected in the financial presentation of “Adjusted EBITDA” in the amounts set forth in and as further described in the Offering Memorandum, but only to the extent such add backs occurred in the consecutive four quarter period used in the calculations of Fixed Charge Coverage Ratio, Consolidated Leverage Ratio and Secured Indebtedness Leverage Ratio, as the case may be; plus

 

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(7) the amount of net cost savings projected by the Issuer in good faith to be realized as a result of specified actions taken or to be taken (calculated on a pro forma basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that (w) such cost savings are reasonably identifiable and factually supportable, (x) such actions have been taken or are to be taken and must be expected to be achieved on a run-rate basis within 90 days after the date of determination to take such action, (y) no cost savings shall be added pursuant to this clause (7) to the extent duplicative of any expenses or charges relating to such cost savings that are included in the calculations of Consolidated Net Income or EBITDA with respect to such period and (z) the aggregate amount of cost savings added pursuant to this clause (7) shall not exceed $75.0 million for any four consecutive quarter period (which adjustments may be incremental to pro forma adjustments made pursuant to the second paragraph of the definitions of “Fixed Charge Coverage Ratio”, “Consolidated Leverage Ratio” or “Secured Indebtedness Leverage Ratio”, as applicable); plus

(8) the amount of loss on any sale of Securitization Assets to a Special Purpose Securitization Subsidiary in connection with any Permitted Securitization Financing that is not shown as a liability on a consolidated balance sheet prepared in accordance with GAAP; plus

(9) storefront conversion costs relating to acquired stores by the Issuer or any Restricted Subsidiary; plus

(10) any costs or expenses incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or stockholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of the Issuer or a Note Guarantor solely to the extent that such net cash proceeds are excluded from the calculation of the Cumulative Credit;

less , without duplication,

(11) non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items for which cash was received in a prior period); less

(12) all deductions reflected in the financial presentation of “Adjusted EBITDA” in the amounts set forth in and as further described in the Offering Memorandum, but only to the extent such deductions occurred in the consecutive four quarter period used in the calculations of Fixed Charge Coverage Ratio, Consolidated Leverage Ratio and Secured Indebtedness Leverage Ratio, as the case may be.

Equity Interests ” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

Equity Offering ” means any public or private sale after the Issue Date of common stock or Preferred Stock of the Issuer or any direct or indirect parent of the Issuer, as applicable (other than Disqualified Stock), other than:

(1) public offerings with respect to the Issuer’s or such direct or indirect parent’s common stock registered on Form S-4 or Form S-8;

 

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(2) issuances to any Subsidiary of the Issuer; and

(3) any such public or private sale that constitutes an Excluded Contribution.

Event of Default ” has the meaning set forth under Section 6.01 hereof.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

Exchange Notes ” means the Notes issued in exchange for the Notes pursuant to the Registration Rights Agreement or similar agreement.

Exchange Offer ” has the meaning set forth in the Registration Rights Agreement.

Exchange Offer Registration Statement ” has the meaning set forth in the Registration Rights Agreement.

Excluded Contributions ” means the Cash Equivalents or other assets (valued at their Fair Market Value as determined in good faith by senior management or the Board of Directors of the Issuer) received by the Issuer after the Issue Date from:

(1) contributions to its common Capital Stock, and

(2) the sale (other than to a Subsidiary of the Issuer or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Issuer or any Subsidiary, to the extent such sale to such equity, stock option or other plan is financed by loans from or guaranteed by, the Issuer or any Restricted Subsidiary) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Issuer,

in each case designated as Excluded Contributions pursuant to an Officer’s Certificate executed by an Officer of the Issuer on or promptly after the date such capital contributions are made or the date such Capital Stock is sold, as the case may be, which are excluded from the calculation set forth in the definition of the term “Cumulative Credit”.

Existing Indentures ” means, collectively, the Existing Senior Note Indentures and the Existing Senior Subordinated Note Indenture.

Existing Joint Ventures ” means joint ventures in existence on the Issue Date.

Existing Note Guarantee ” means an Existing Senior Note Guarantee or an Existing Senior Subordinated Note Guarantee.

Existing Notes ” means the aggregate principal amount of the Existing Senior Cash Notes, Existing Senior Toggle Notes and Existing Senior Subordinated Notes in existence on the Issue Date (after giving effect to the Existing Notes Exchange Offers) less the aggregate principal amount of Existing Senior Notes and Existing Senior Subordinated Notes that are thereafter repurchased, redeemed, discharged or otherwise repaid.

Existing Notes Exchange Offers ” means the transactions contemplated by the Offering Memorandum, including those described therein under the caption “Certain Relationships and Related Transactions”.

 

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Existing Notes Offering Memorandum ” means the offering memorandum, dated April 5, 2007, relating to the sale of the Existing Notes.

Existing Securitization Documents ” means the Apple Ridge Documents and the U.K. Documents.

Existing Securitization Financings ” means the financing programs pursuant to the Apple Ridge Documents and the U.K. Documents, each as amended, restated, refinanced, modified or supplemented on or prior to the Issue Date.

Existing Senior Cash Notes ” means the 10.50% Senior Notes due 2014, issued by the Issuer pursuant to the Existing Senior Cash Note Indenture.

Existing Senior Cash Note Indenture ” means the Indenture dated as of April 10, 2007 among the Issuer, the guarantors named therein and The Bank of New York Mellon, as successor Trustee, governing the Existing Senior Cash Notes, as amended, supplemented or modified from time to time.

Existing Senior Note Guarantee ” means any guarantee of the obligations of the Issuer under the Existing Senior Notes and the Existing Senior Note Indentures by any Restricted Subsidiary in accordance with the provisions of the Existing Senior Note Indentures.

Existing Senior Notes ” means the Existing Senior Cash Notes and the Existing Senior Toggle Notes.

Existing Senior Note Indentures ” means, collectively, the Existing Senior Cash Note Indenture and the Existing Senior Toggle Note Indenture.

Existing Senior Subordinated Notes ” means the 12.375% Senior Subordinated Notes due 2015, issued by the Issuer pursuant to the Existing Senior Subordinated Note Indenture.

Existing Senior Subordinated Note Guarantee ” means any guarantee of the obligations of the Issuer under the Existing Senior Subordinated Notes and the Existing Senior Subordinated Note Indenture by any Restricted Subsidiary in accordance with the provisions of the Existing Senior Subordinated Note Indenture.

Existing Senior Subordinated Note Indenture ” means the Indenture dated as of April 10, 2007 among the Issuer, the guarantors named therein and The Bank of New York Mellon, as successor Trustee, governing the Existing Senior Subordinated Notes, as amended, supplemented or modified from time to time.

Existing Senior Toggle Notes ” means the 11.00%/11.75% Senior Toggle Notes due 2014, issued by the Issuer pursuant to the Existing Senior Toggle Note Indenture.

Existing Senior Toggle Note Indenture ” means the Indenture dated as of April 10, 2007 among the Issuer, the guarantors named therein and The Bank of New York Mellon, as successor Trustee, governing the Existing Senior Toggle Notes, as amended, supplemented or modified from time to time.

Extended Maturity Note Indentures ” means, collectively, the Indentures governing the Extended Maturity Notes.

Extended Maturity Notes ” means, collectively, the Notes, the New 11.50% Senior Notes and the New Senior Subordinated Notes.

 

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Extended Maturity Notes Guarantees ” means any guarantee of the obligations of the Issuer under the Extended Maturity Notes and the Extended Maturity Note Indentures by any Person in accordance with the provisions of the Extended Maturity Note Indentures.

Fair Market Value ” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.

Fixed Charge Coverage Ratio ” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Issuer or any of the Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other than in the case of revolving credit borrowings in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but on or prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.

For purposes of making the computation referred to above, Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to a company, operating unit, division, segment, business, group of assets or lines of business, that the Issuer or any of the Restricted Subsidiaries has made after the Issue Date and during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation, in each case with respect to an operating unit, division, segment, business, group of assets or lines of business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period. For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting Officer of the Issuer.

If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of twelve months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable

 

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period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate.

Fixed Charges ” means, with respect to any Person for any period, the sum, without duplication, of:

(1) Consolidated Interest Expense of such Person for such period, and

(2) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and the Restricted Subsidiaries.

Foreign Subsidiary ” means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state or territory thereof or the District of Columbia and any Restricted Subsidiary of such Foreign Subsidiary.

GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date. For the purposes of this Indenture, the term “consolidated” with respect to any Person shall mean such Person consolidated with the Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as an Investment.

Global Notes Legend ” means the legend set forth under that caption in Exhibit A to this Indenture.

Government Obligations ” means securities that are:

(1) direct obligations of the United States of America, for the timely payment of which its full faith and credit is pledged, or

(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such Government Obligations or a specific payment of principal of or interest on any such Government Obligations held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Obligations or the specific payment of principal of or interest on the Government Obligations evidenced by such depository receipt.

guarantee ” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

 

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Hedging Obligations ” means, with respect to any Person, the obligations of such Person under:

(1) currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and

(2) other similar agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

Holder ” means the Person in whose name a Note is registered on the Registrar’s books.

Holdings ” means the party named as such in the preamble to this Indenture and its successors.

Holdings Guarantee ” means the guarantee of the obligations of the Issuer under this Indenture and the Notes by Holdings in accordance with the provisions of this Indenture.

Holdings Pari Passu Indebtedness ” means with respect to Holdings, (i) the guarantee by Holdings of the obligations of the Issuer under the New 11.50% Senior Notes Indenture in accordance with the provisions of the New 11.50% Senior Notes Indenture, (ii) the guarantee by Holdings of the obligations of the Issuer under the Existing Senior Note Indentures and (iii) any Indebtedness that is not Holdings Senior Indebtedness or Holdings Subordinated Indebtedness.

Holdings Representative ” means the trustee, agent or representative (if any) for an issue of Holdings Senior Indebtedness; provided that if, and for so long as, such Holdings Senior Indebtedness lacks such a Holdings Representative, then the Holdings Representative for such Holdings Senior Indebtedness shall at all times constitute the holder or holders of a majority in outstanding principal amount of obligations under such Holdings Senior Indebtedness.

Holdings Senior Indebtedness ” means with respect to Holdings means any future Indebtedness of Holdings that is designated by Holdings as Holdings Senior Indebtedness.

Holdings Subordinated Indebtedness ” means with respect to Holdings, (i) any guarantee by Holdings of the obligations of the Issuer under the New Senior Subordinated Notes Indenture and the Existing Senior Subordinated Note Indenture, (ii) any guarantee by Holdings of the obligations of the Issuer under the Convertible Note Indenture and (iii) any Indebtedness of Holdings, guarantee of Holdings or obligation of Holdings that specifically provides that such Indebtedness of Holdings, guarantee of Holdings or obligation of Holdings is to rank junior in right of payment to the Holdings Guarantee.

Incur ” means issue, assume, guarantee, incur or otherwise become liable for; provided , however , that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.

Indebtedness ” means, with respect to any Person:

(1) the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase

 

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price of any property (except (i) any such balance that constitutes a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP), (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

(2) to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and

(3) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however , that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person;

provided, however , that notwithstanding the foregoing, Indebtedness shall be deemed to exclude (1) Contingent Obligations incurred in the ordinary course of business and the Cendant Contingent Liabilities (including the Contingent Obligations described in note 13 to the Issuer’s consolidated financial statements for the year ended December 31, 2009, incorporated by reference in the Offering Memorandum) (not in respect of borrowed money); (2) deferred or prepaid revenues or marketing fees; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) obligations under or in respect of a Permitted Securitization Financing (but including the excess, if any, of the amount of the obligations thereunder or in respect thereof over the aggregate receivables balances securing or otherwise supporting such obligations but only to the extent that the Issuer or any Subsidiary of the Issuer other than a Special Purpose Securitization Subsidiary is directly or indirectly liable for such excess); (5) obligations under or in respect of Arbitrage Programs except in connection with the calculation of the Consolidated Leverage Ratio and the Secured Indebtedness Leverage Ratio; (6) obligations to make payments in respect of funds held under escrow arrangements in the ordinary course of business; (7) obligations to make payments to third party insurance underwriters in respect of premiums collected by the Issuer and the Restricted Subsidiaries in the ordinary course of business; or (8) obligations under the Merger Documents.

Notwithstanding anything in this Indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Accounting Standards Codification 815 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture.

Indenture ” means this Indenture, as amended or supplemented from time to time.

Independent Financial Advisor ” means an accounting, appraisal, investment banking firm or consultant in each case of nationally recognized standing, that is, in the good faith determination of the Issuer, qualified to perform the task for which it has been engaged.

Initial Notes ” has the meaning set forth in the recitals hereto.

 

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Insurance Business ” means one or more aspects of the business of soliciting, administering, selling, issuing or underwriting insurance or reinsurance.

Insurance Subsidiary ” means any Subsidiary that is licensed by any Applicable Insurance Regulatory Authority to conduct, and conducts, an Insurance Business.

Interest Payment Date ” means April 15 and October 15 of each year to Stated Maturity.

Investment Grade Rating ” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

Investment Grade Securities ” means:

(1) securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents);

(2) securities that have a rating equal to or higher than Baa3 (or equivalent) by Moody’s or BBB- (or equivalent) by S&P, or an equivalent rating by any other Rating Agency, but excluding any debt securities or loans or advances between and among the Issuer and its Subsidiaries;

(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution; and

(4) corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.

Investments ” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit, security deposits and advances to customers or suppliers, advances or loans to franchisees in the ordinary course of business (whether evidenced by a note or otherwise) and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of the Issuer in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section 4.07:

(1) “Investments” shall include the portion (proportionate to the Issuer’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of the Issuer at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a re-designation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to:

(a) the Issuer’s “Investment” in such Subsidiary at the time of such re-designation, less

 

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(b) the portion (proportionate to the Issuer’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and

(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by the senior management or the Board of Directors of the Issuer.

Issue Date ” means January 5, 2011, the date on which the Notes are originally issued.

Issuer ” means the party named as such in the preamble to this Indenture and its successors and not any of its Subsidiaries.

Issuer Order ” means a written request or order signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of such Issuer, and delivered to the Trustee.

Lien ” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest, preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement), any lease in the nature thereof, any agreement to give a mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest or encumbrance of any kind and, except in connection with any Permitted Securitization Financing, any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction (other than a filing for informational purposes); provided that in no event shall an operating lease or an option or an agreement to sell be deemed to constitute a Lien.

Management Fee Agreement ” means the Management Fee Agreement, dated as of April 10, 2007, by and among the Issuer, Apollo Management VI, L.P. and Apollo Alternative Assets, L.P., as in existence on the Original Issue Date.

Management Group ” means the group consisting of the directors, executive officers and other management personnel of the Issuer or any direct or indirect parent of the Issuer, as the case may be, on the Issue Date.

Merger ” means the acquisition by Affiliates of the Sponsors of the Issuer pursuant to the Merger Documents.

Merger Documents ” means the Agreement and Plan of Merger by and among Holdings, Domus Acquisition Corp. and the Issuer, dated as of December 15, 2006, and any other document entered into in connection therewith, in each case as amended, supplemented or modified from time to time on or prior to the Original Issue Date.

Merger Transactions ” means the Merger and the transactions contemplated by the Merger Documents, the offerings of the Existing Notes, and borrowings made pursuant to the Credit Agreement on the Original Issue Date and the refinancing of the then Existing Securitization Financings (which may have occurred prior to the Original Issue Date) and, in each case, the application of the proceeds therefrom.

Moody’s ” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

 

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Net Income ” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

Net Proceeds ” means the aggregate cash proceeds received by the Issuer or any of the Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements related thereto), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to clause (1) of Section 4.10(b)) to be paid as a result of such transaction, and any deduction of appropriate amounts to be provided by the Issuer as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Issuer after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction and any distributions and payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Sale.

New 11.50% Senior Notes ” means the Issuer’s 11.50% Senior Notes due 2017 issued pursuant to the New 11.50% Senior Notes Indenture.

New 11.50% Senior Note Indenture ” means the indenture governing the New 11.50% Senior Notes.

New Notes ” means, collectively, the Extended Maturity Notes and the Convertible Notes issued on the Issue Date.

New Senior Subordinated Notes ” means the Issuer’s 13.375% Senior Subordinated Notes due 2018 issued pursuant to the New Subordinated Notes Indenture.

New Senior Subordinated Notes Indenture ” means the Indenture governing the New Senior Subordinated Notes.

Non-Guarantor Subsidiary ” means a Restricted Subsidiary that is not a Note Guarantor.

Note Guarantee ” means any guarantee of the obligations of the Issuer under this Indenture and the Notes by any Note Guarantor in accordance with the provisions of this Indenture.

Note Guarantor ” means any Restricted Subsidiary that Incurs a Note Guarantee and its successors; provided that upon the release or discharge of such Person from its Note Guarantee in accordance with this Indenture, such Person ceases to be a Note Guarantor.

Notes ” means the Initial Notes and more particularly means any Note authenticated and delivered under this Indenture. For all purposes of this Indenture, the term “Notes” shall also include Exchange Notes and any Additional Notes that may be issued under a supplemental indenture. The Initial Notes issued on the Issue Date, Additional Notes and Exchange Notes shall be treated as a single class for all purposes under this Indenture.

 

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NRT ” means NRT Incorporated, a Delaware corporation, and any successors thereto.

Obligations ” means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness; provided that Obligations with respect to the Notes shall not include fees or indemnifications in favor of the Trustee and other third parties other than the Holders of the Notes.

Offering Memorandum ” means the offering memorandum, dated November 30, 2010, relating to the exchange of the Existing Notes for the New Notes, as supplemented by Supplement No. 1 dated December 6, 2010, Supplement No. 2 dated December 10, 2010, Supplement No. 3 dated December 13, 2010 and Supplement No. 4 dated December 15, 2010.

Officer ” means the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Issuer. “Officer” of any Note Guarantor or Holdings has a correlative meaning.

Officer’s Certificate ” means a certificate signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer that meets the requirements set forth in this Indenture. “Officer’s Certificate” of Holdings or any Note Guarantor has a correlative meaning.

OID Legend ” means the legend set forth in Section 2.3(e)(i) of Appendix A to this Indenture.

Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer, Holdings, a Note Guarantor or the Trustee.

Original Issue Date ” means April 10, 2007.

Permitted Holders ” means, at any time, each of the Sponsors and members of the Management Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

Permitted Investments ” means:

(1) any Investment in the Issuer or any Restricted Subsidiary;

(2) any Investment in Cash Equivalents or Investment Grade Securities;

(3) any Investment by the Issuer or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary;

 

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(4) any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of Section 4.10 or any other disposition of assets not constituting an Asset Sale;

(5) any Investment existing on, or made pursuant to binding commitments existing on, the Original Issue Date; provided , that the amount of any such Investment may only be increased as required by the terms of such Investment as in existence on the Original Issue Date;

(6) advances after the Original Issue Date to directors, officers or employees not in excess of $50.0 million outstanding at any one time;

(7) any Investment acquired by the Issuer or any of the Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Issuer or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable; (b) as a result of a foreclosure by the Issuer or any of the Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default; or (c) as a result of the settlement, compromise or resolution of litigation, arbitration or other disputes with Persons who are not Affiliates;

(8) Hedging Obligations permitted under clause (10) of Section 4.09(b);

(9) any Investment by the Issuer or any of the Restricted Subsidiaries in a Similar Business having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (9) after the Original Issue Date that are at that time outstanding (after giving effect to the sale or other transfer of an Unrestricted Subsidiary to the extent the proceeds of such sale received by the Issuer and its Restricted Subsidiaries consists of cash and Cash Equivalents), not to exceed the greater of (x) $325.0 million and (y) 2.75% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however , that if any Investment pursuant to this clause (9) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be a Restricted Subsidiary;

(10) additional Investments by the Issuer or any of the Restricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (10) after the Original Issue Date that are at that time outstanding (after giving effect to the sale or other transfer of an Unrestricted Subsidiary to the extent the proceeds of such sale received by the Issuer and its Restricted Subsidiaries consists of cash and Cash Equivalents), not to exceed the greater of (x) $400.0 million and (y) 3.25% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(11) loans and advances to officers, directors and employees for business-related travel expenses, moving expenses and other similar expenses, in each case Incurred in the ordinary course of business;

(12) Investments the payment for which consists of Equity Interests of the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer, as applicable;

 

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provided, however , that such Equity Interests will not increase the amount available for Restricted Payments under clauses (2) and (3) of the definition of Cumulative Credit;

(13) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 4.11(b) (except transactions described in clauses (2), (6), (7), (17) and (18) of such Section);

(14) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

(15) guarantees issued in accordance with Section 4.09 and Section 4.15;

(16) Investments consisting of purchases and acquisitions of inventory, supplies, materials, services and equipment or purchases of contract rights or licenses or leases of intellectual property, in each case in the ordinary course of business;

(17) Investments arising as a result of Permitted Securitization Financings;

(18) additional Investments after the Original Issue Date in joint ventures of the Issuer or any of the Restricted Subsidiaries not to exceed the greater of $100.0 million at any one time outstanding and 0.75% of Total Assets at the time of Incurrence (plus an amount (without duplication of amounts reflected in Consolidated Net Income) equal to any return of capital actually received in respect of Investments theretofore made pursuant to this clause (18) in the aggregate, as valued at the Fair Market Value of such Investment at the time such Investment is made); provided, however, that if any Investment pursuant to this clause (18) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (18) for so long as such Person continues to be a Restricted Subsidiary;

(19) Investments of a Restricted Subsidiary of the Issuer acquired after the Original Issue Date or of an entity merged into, amalgamated with, or consolidated with the Issuer or a Restricted Subsidiary in a transaction that is not prohibited by Section 5.01 after the Original Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;

(20) any Investments in connection with the Arbitrage Programs;

(21) Investments in connection with the defeasance or discharge of the Existing Notes or the New Notes (which Investments would otherwise constitute Permitted Investments);

(22) advances or loans to relocating employees of a customer in the relocation services business of the Issuer and its Restricted Subsidiaries made in the ordinary course of business; and

(23) guarantees by the Issuer or any of its Restricted Subsidiaries of operating leases (other than Capitalized Lease Obligations), trademarks, licenses, purchase agreements or of other obligations that do not constitute Indebtedness, in each case entered into by the Issuer or any Restricted Subsidiary in the ordinary course of business.

 

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All Permitted Investments outstanding on the Issue Date and made on or after the after the Original Issue Date that were permitted under the Existing Indentures prior to the Issue Date pursuant to a clause corresponding to any of clauses (6), (9), (10) or (18) above shall be deemed to have been made on the Issue Date pursuant to the corresponding clause above in an amount equal to the amount of such Permitted Investment when actually made.

Permitted Lien ” means, with respect to any Person:

(1) pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory or regulatory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

(2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(3) Liens for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(4) Liens in favor of issuers of performance and surety bonds or bid bonds or similar liabilities or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

(5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties incurred in the ordinary course of business and title defects or irregularities that are of a minor nature and which do not in the aggregate interfere in any material respect with the ordinary course of business of such Person;

(6) (A) Liens on assets of a Restricted Subsidiary that is not a Note Guarantor securing Indebtedness of such Restricted Subsidiary permitted to be Incurred pursuant to Section 4.09 (provided that such Lien does not extend to the property or assets of the Issuer or any Subsidiary of the Issuer other than a Restricted Subsidiary that is not a Note Guarantor), (B) Liens securing an aggregate principal amount of Senior Pari Passu Indebtedness not to exceed the aggregate amount of Senior Pari Passu Indebtedness permitted to be Incurred pursuant to clauses (1) and (24) of Section 4.09(b) and (C) Liens securing Indebtedness permitted to be Incurred pursuant to clause (4) (provided that such Liens do not extend to any property or assets that are not property being purchased, leased, constructed or improved with the proceeds of such Indebtedness being Incurred pursuant to clause (4)), (12), (20) (provided that such Lien does not

 

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extend to the property or assets of any Subsidiary of the Issuer other than a Foreign Subsidiary) or (21) of Section 4.09(b);

(7) Liens existing on the Issue Date (other than with respect to Obligations in respect of the Credit Agreement, but including with respect to Obligations in respect of the Delayed Draw Term Loans);

(8) Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided , further, however, that such Liens may not extend to any other property owned by the Issuer or any Restricted Subsidiary;

(9) Liens on assets or property at the time the Issuer or a Restricted Subsidiary acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into the Issuer or any Restricted Subsidiary; provided, however , that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided , further, however, that the Liens may not extend to any other property owned by the Issuer or any Restricted Subsidiary;

(10) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary permitted to be Incurred in accordance with Section 4.09;

(11) Liens securing Hedging Obligations not incurred in violation of this Indenture; provided that with respect to Hedging Obligations relating to Indebtedness, such Lien extends only to the property securing such Indebtedness;

(12) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(13) leases and subleases of real property granted to others in the normal course of business which do not materially interfere with the ordinary conduct of the business of the Issuer or any of the Restricted Subsidiaries;

(14) Liens arising from precautionary Uniform Commercial Code financing statements or consignments entered into in connection with any transaction otherwise permitted under this Indenture;

(15) Liens in favor of the Issuer or any Note Guarantor;

(16) Liens in respect of Permitted Securitization Financings on all or a portion of the assets of Special Purpose Securitization Subsidiaries (including without limitation, pursuant to UCC filings covering sales of accounts, chattel paper, payment intangibles, promissory notes with respect to Permitted Securitization Financings and beneficial interests therein);

(17) deposits made in the ordinary course of business to secure liability to insurance carriers;

 

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(18) Liens on the Equity Interests of Unrestricted Subsidiaries;

(19) grants of software and other technology licenses in the ordinary course of business;

(20) [Reserved];

(21) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6)(B), (7), (8), (9), (15) and (20); provided, however , that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property) and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6)(B), (7), (8), (9), (15) and (20) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

(22) Liens on equipment of the Issuer or any Restricted Subsidiary granted in the ordinary course of business to the Issuer’s or such Restricted Subsidiary’s client at which such equipment is located;

(23) judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

(24) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

(25) Liens incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business;

(26) liens arising by virtue of any statutory or common law provisions relating to banker’s liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution or as to purchase orders and other agreements entered into with customers in the ordinary course of business;

(27) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

(28) [Reserved];

(29) Liens securing the Arbitrage Programs and related segregated deposit and securities accounts;

(30) Liens on any property or assets of the Issuer or any Restricted Subsidiary securing Indebtedness permitted by clause (27) of Section 4.09; provided , that such Lien (i) does not apply to any other property or asset of the Issuer or any Restricted Subsidiary not securing such Indebtedness at the date of the acquisition of such property or asset and (ii) is not created in contemplation of or in connection with such acquisition;

 

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(31) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(32) Liens solely on any cash earnest money deposits made by the Issuer or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement in respect of any Investment permitted hereunder;

(33) Liens on securities that are the subject of repurchase agreements constituting Cash Equivalents;

(34) Liens securing insurance premiums financing arrangements; provided , that such Liens are limited to the applicable unearned insurance premiums;

(35) other Liens securing obligations not to exceed $75.0 million at any one time outstanding; and

(36) Liens on proceeds from Cendant Contingent Assets received by the Issuer and held in trust (or otherwise segregated or pledged) for the benefit of the other parties to the Separation and Distribution Agreement (other than Travelport Inc.) to secure the Issuer’s obligations under Section 7.9 thereof.

Permitted Securitization Documents ” means all documents and agreements evidencing, relating to or otherwise governing a Permitted Securitization Financing.

Permitted Securitization Financing ” means one or more transactions pursuant to which Securitization Assets are sold, conveyed or otherwise transferred to (x) a Special Purpose Securitization Subsidiary (in the case of the Issuer or a Restricted Subsidiary of the Issuer) or (y) any other Person (in the case of a transfer by a Special Purpose Securitization Subsidiary), or Liens are granted in Securitization Assets (whether existing on the Issue Date or arising in the future); provided , that (1) recourse to the Issuer or any Restricted Subsidiary (other than the Special Purpose Securitization Subsidiaries) in connection with such transactions shall be limited to Standard Securitization Undertakings; (2) no property or assets of the Issuer or any other Restricted Subsidiary of the Issuer (other than a Special Purpose Securitization Subsidiary) shall be subject to such Permitted Securitization Financing other than pursuant to Standard Securitization Undertakings; (3) any material contract, agreement, arrangement or understanding with the Issuer or any Restricted Subsidiary of the Issuer included in the Permitted Securitization Documents with respect to such Permitted Securitization Financing shall be on terms which the Issuer reasonably believes to be not materially less favorable to the Issuer or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Issuer; and (4) with respect to any Permitted Securitization Financing entered into after the Issue Date, the Board of Directors of the Issuer shall have determined in good faith that such Permitted Securitization Financing (including financing terms, advance rates, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to the Issuer and the Special Purpose Securitization Subsidiaries involved in such Permitted Securitization Financing. For the avoidance of doubt, the Existing Securitization Financings as in effect on the Issue Date shall be Permitted Securitization Financings.

Person ” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

 

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Preferred Stock ” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.

Qualified CFC Holding Company ” shall mean a Wholly Owned Subsidiary of the Issuer that is a Delaware limited liability company that is treated as a disregarded entity for U.S. federal income tax purposes, the primary asset of which consists of Equity Interests in either (i) one or more Foreign Subsidiaries or (ii) a Delaware limited liability company the primary asset of which consists of Equity Interests in one or more Foreign Subsidiaries.

Rating Agency ” means (1) each of Moody’s and S&P and (2) if Moody’s or S&P ceases to rate the Notes for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(f) under the Exchange Act selected by the Issuer or any direct or indirect parent of the Issuer as a replacement agency for Moody’s or S&P, as the case may be.

Record Date ” for the interest or Additional Interest, if any, payable on any applicable Interest Payment Date means April 1 or October 1 (whether or not a Business Day) next preceding such Interest Payment Date.

Registration Rights Agreement ” means the Registration Rights Agreement in respect of the Notes, dated as of the Issue Date, among the Dealer Managers, the Issuer, Holdings and the Note Guarantors.

Restricted Cash ” means cash and Cash Equivalents held by Restricted Subsidiaries that is contractually restricted from being distributed to the Issuer or not available for general corporate purposes, except for such restrictions that are contained in agreements governing Indebtedness permitted under this Indenture and that is secured by such cash or Cash Equivalents.

Restricted Investment ” means an Investment other than a Permitted Investment.

Restricted Notes Legend ” means the legend set forth in Section 2.3(e)(i) of Appendix A to this Indenture.

Restricted Subsidiary ” means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person; provided that upon an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of “Restricted Subsidiary” (provided it continues to be a Subsidiary of such Person). Unless otherwise indicated in this Indenture, all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of the Issuer.

S&P ” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., or any successor to the rating agency business thereof.

Sale/Leaseback Transaction ” means an arrangement relating to property now owned or hereafter acquired by the Issuer or a Restricted Subsidiary whereby the Issuer or a Restricted Subsidiary transfers such property to a Person and the Issuer or such Restricted Subsidiary leases it from such Person, other than leases between the Issuer and a Restricted Subsidiary or between Restricted Subsidiaries.

SEC ” means the Securities and Exchange Commission.

Secured Indebtedness ” means any Indebtedness secured by a Lien.

 

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Secured Indebtedness Leverage Ratio ” means, with respect to any Person at any date, the ratio of (i) Secured Indebtedness and Disqualified Stock of such Person and its Restricted Subsidiaries and Preferred Stock of Non-Guarantor Subsidiaries as of such date (determined on a consolidated basis in accordance with GAAP) less the amount of cash and Cash Equivalents in excess of any Restricted Cash that would be stated on the balance sheet of such Person and its Restricted Subsidiaries (other than Special Purpose Securitization Subsidiaries) and held by such Person and its Restricted Subsidiaries (other than Special Purpose Securitization Subsidiaries) as of such date of determination to (ii) EBITDA of such Person for the four full fiscal quarters for which internal financial statements are available immediately preceding such date. In the event that the Issuer or any of the Restricted Subsidiaries Incurs or redeems any Indebtedness or issues or redeems Disqualified Stock or Non-Guarantor Subsidiaries Incur or redeem Preferred Stock subsequent to the commencement of the period for which the Secured Indebtedness Leverage Ratio is being calculated but on or prior to or simultaneously with the event for which the calculation of the Secured Indebtedness Leverage Ratio is made (the “Secured Leverage Calculation Date”), then the Secured Indebtedness Leverage Ratio shall be calculated giving pro forma effect to such Incurrence or redemption of Indebtedness or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period; provided that the Issuer may elect, pursuant to an Officer’s Certificate delivered to the Trustee, that all or any portion of the commitment under any Secured Indebtedness as being Incurred at the time such commitment is entered into and any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be the creation or Incurrence of Indebtedness or a Lien at such subsequent time. Notwithstanding the foregoing and for purposes of this calculation, the aggregate principal amount of Indebtedness shall be calculated without giving effect to purchase accounting adjustments.

For purposes of making the computation referred to above, Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP) in each case with respect to a company, operating unit, division, segment, business, group of assets or lines of business, that the Issuer or any of the Restricted Subsidiaries has made after the Issue Date and during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Secured Leverage Calculation Date (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation, in each case with respect to an operating unit, division, segment, business, group of assets or lines of business, that would have required adjustment pursuant to this definition, then the Secured Indebtedness Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period. For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting Officer of the Issuer.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Securitization Assets ” means rights to receive payments and funds under relocation contracts and related contracts, homes held for resale, receivables relating to mortgage payments, equity payments and mortgage payoffs, other related receivables, beneficial interests in such assets and assets

 

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relating thereto and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving receivables and similar assets, made subject to a Permitted Securitization Financing, in each case related to the relocation services business.

Securitization Fees ” means distributions or payments made directly or by means of discounts with respect to any participation interests issued or sold in connection with, and all other fees paid to a Person other than the Issuer or any Restricted Subsidiary in connection with any Permitted Securitization Financing.

Securitization Repurchase Obligation ” means any obligation of a seller of Securitization Assets in a Permitted Securitization Financing to repurchase Securitization Assets as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a Securitization Asset or portion thereof becoming subject to any asserted defense, dispute, off set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

Senior Pari Passu Indebtedness ” means:

(1) with respect to the Issuer, the Notes and any Indebtedness that ranks pari passu in right of payment to the Notes; and

(2) with respect to any Note Guarantor, its Note Guarantee and any Indebtedness that ranks pari passu in right of payment to such Note Guarantor’s Note Guarantee.

Separation and Distribution Agreement ” means the Separation and Distribution Agreement by and among Cendant, the Issuer, Travelport Inc. and Wyndham Worldwide Corporation, dated as of July 27, 2006.

Shelf Registration Statement ” means the Shelf Registration Statement as defined in the Registration Rights Agreement.

Significant Subsidiary ” means any Restricted Subsidiary that would be a “Significant Subsidiary” of the Issuer within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC, as such Regulation is in effect on the Issue Date.

Similar Business ” means a business, the majority of whose revenues are derived from the activities of the Issuer and its Restricted Subsidiaries as of the Issue Date or any business or activity that is reasonably similar or complementary to any business conducted or proposed to be conducted by the Issuer and the Restricted Subsidiaries as of the Issue Date or a reasonable extension, development or expansion thereof or ancillary thereto.

Special Purpose Securitization Subsidiary ” means any Restricted Subsidiary (x) party as of the Issue Date to any Existing Securitization Document or (y) (1) to which the Issuer or a Subsidiary of the Issuer transfers or otherwise conveys Securitization Assets, (2) which engages in no activities other than in connection with the receipt, management, transfer and financing of those Securitization Assets and activities incidental or related thereto, (3) none of the obligations of which are guaranteed by the Issuer or any Subsidiary of the Issuer (other than another Special Purpose Securitization Subsidiary) other than pursuant to Standard Securitization Undertakings, and (4) with respect to which neither the Issuer nor any Subsidiary of the Issuer has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.

 

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Sponsors ” means (i) (x) one or more investment funds controlled by Apollo Management, L.P. and (y) Apollo Management, L.P. and its Affiliates (collectively, the “Apollo Sponsors”) and (ii) any Person that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) with any Apollo Sponsors; provided that in the case of clause (ii), any Apollo Sponsor (x) owns a majority of the voting power of such group and (y) controls a majority of the Board of Directors of the Issuer.

Standard Securitization Undertakings ” means representations, warranties (and any related repurchase obligations), servicer obligations, obligations to transfer Securitization Assets, guarantees of performance and payments (other than payments of the obligations backed by the Securitization Assets or obligations of Special Purpose Securitization Subsidiaries), and covenants and indemnities entered into by the Issuer or any Subsidiary of the Issuer of a type that the Board of Directors of the Issuer has determined in good faith to be reasonably customary in securitizations and/or are reasonably similar to those in the Existing Securitization Financings.

Stated Maturity ” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

Subordinated Indebtedness ” means (a) with respect to the Issuer, any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the Notes and (b) with respect to any Note Guarantor, any Indebtedness of such Note Guarantor which is by its terms subordinated in right of payment to its Note Guarantee.

Subsidiary ” means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total ordinary voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof (or persons performing similar functions) is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company or similar entity of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

Tax Distributions ” means any distributions described in clause (12) of Section 4.07(b).

TIA ” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of this Indenture.

Title Resource Group ” means Title Resource Group LLC (formerly known as Cendant Settlement Services Group LLC), a Delaware limited liability company, and any successor thereto.

Total Assets ” means the total consolidated assets of the Issuer and the Restricted Subsidiaries, as shown on the most recent balance sheet of the Issuer.

 

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Transfer Restricted Notes ” means Definitive Notes and any other Notes that bear or are required to bear the Restricted Notes Legend.

Treasury Rate ” means, as of the applicable redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to such redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to April 15, 2013; provided , however, that if the period from such redemption date to April 15, 2013 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

Trust Officer ” means:

(1) any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject, and

(2) who shall have direct responsibility for the administration of this Indenture.

Trustee ” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

U.K. Documents ” means the letter agreement, dated August 12, 2010, by and between Cartus Financing Limited and Lloyds TSB Bank plc and the letter agreement, dated August 13, 2010, by and between Cartus Financing Limited and Lloyds TSB Bank plc, and each other agreement or other document contemplated by or entered into in connection with and/or in replacement of the foregoing, each as amended, restated, refinanced, modified or supplemented on or prior to the Issue Date.

Unrestricted Subsidiary ” means:

(1) any Subsidiary of the Issuer that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of such Person in the manner provided below; and

(2) any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors of the Issuer may designate any Subsidiary of the Issuer (including any newly acquired or newly formed Subsidiary of the Issuer) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, the Issuer or any other Subsidiary of the Issuer that is not a Subsidiary of the Subsidiary to be so designated; provided, however , that the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of the Issuer or any of the Restricted Subsidiaries; provided , further, however, that either:

(a) the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or

 

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(b) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.07

The Board of Directors of the Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however , that immediately after giving effect to such designation:

(x) (1) the Issuer could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described under Section 4.09 or (2) the Fixed Charge Coverage Ratio for the Issuer and the Restricted Subsidiaries would be greater than such ratio for the Issuer and the Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and

(y) no Event of Default shall have occurred and be continuing.

Any such designation by the Board of Directors of the Issuer shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors of the Issuer giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing provisions.

Voting Stock ” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

Weighted Average Life to Maturity ” means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years (calculated to the nearest one-twelfth) from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.

Wholly Owned Restricted Subsidiary ” is any Wholly Owned Subsidiary that is a Restricted Subsidiary.

Wholly Owned Subsidiary ” of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or shares required to be held by foreign nationals) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.

Section 1.02. Other Definitions .

 

Term

  

Defined in
Section

“Agent Members”

   2.1(d) of
Appendix A

“Affiliate Transaction”

   4.11(a)

“Applicable Procedures”

   1.1(a) of
Appendix A

“ARSC”

   10.07(a)

“Asset Sale Offer”

   4.10(b)

“Authentication Order”

   2.02

“Automatic Exchange”

   2.3(i) of
Appendix A

 

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Term

  

Defined in
Section

“Automatic Exchange Date”

   2.3(i) of
Appendix A

“Automatic Exchange Notice”

   2.3(i) of
Appendix A

“Automatic Exchange Notice Date”

   2.3(i) of
Appendix A

“Cartus”

   10.07(a)

“CFC”

   10.07(a)

“Change of Control Offer”

   4.14(b)

“Change of Control Payment”

   4.14(a)

“Change of Control Payment Date”

   4.14(b)(3)

“Clearstream”

   1.1(a) of
Appendix A

“Commission”

   1.03

“Covenant Defeasance”

   8.03

“DTC”

   2.03

“Euroclear”

   1.1(a) of
Appendix A

“Event of Default”

   6.01

“Excess Proceeds”

   4.10

“Global Note”

   2.1(b) of
Appendix A

“Holdings Guarantee Blockage Notice”

   12.03

“Holdings Guarantee Payment Blockage Period”

   12.03

“Holdings Non-Payment Default”

   12.03

“Holdings Payment Default”

   12.03

“Holdings Permitted Junior Securities”

   12.02

“IAI”

   1.1(a) of
Appendix A

“IAI Global Note”

   2.1(b) of
Appendix A

“indenture securities”

   1.03

“indenture security Holder”

   1.03

“indenture to be qualified”

   1.03

“Indenture Trustee”

   10.07(a)(i)

“indenture trustee” or “institutional trustee”

   1.03

“Institutional Accredited Investor Notes”

   1.1(a) of
Appendix A

“Legal Defeasance”

   8.02

“Note Register”

   2.03

“obligor”

   1.03

“Offer Amount”

   3.09(b)

“Offer Period”

   3.09(b)

“Paying Agent”

   2.03

“pay its Holdings Guarantee”

   12.03

“Pool Assets”

   10.07(a)(ii)

“Purchase Date”

   3.09(b)

“QIB”

   1.1(a) of
Appendix A

 

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Term

  

Defined in
Section

“Refinancing Indebtedness”

   4.09(b)(14)

“Refunding Capital Stock”

   4.07(b)(2)

“Registrar”

   2.03

“Regulation S”

   1.1(a) of
Appendix A

“Regulation S Global Note”

   2.1(b) of
Appendix A

“Regulation S Notes”

   1.1(a) of
Appendix A

“Regulation S Permanent Global Note”

   2.1(b) of
Appendix A

“Regulation S Temporary Global Note”

   2.1(b) of
Appendix A

“Restricted Note”

   2.3(i) of
Appendix A

“Restricted Payments”

   4.07(a)

“Restricted Period”

   1.1(a) of
Appendix A

“Retired Capital Stock”

   4.07(b)(2)

“Reversion Date”

   4.17(b)

“Rule 501”

   1.1(a) of
Appendix A

“Rule 144”

   1.1(a) of
Appendix A

“Rule 144A”

   1.1(a) of
Appendix A

“Rule 144A Global Note”

   2.1(b) of
Appendix A

“Rule 144A Notes”

   1.1(a) of
Appendix A

“Rule 904”

   1.1(a) of
Appendix A

“Specified Merger/Transfer Transaction”

   5.01(a)

“Successor Company”

   5.01(a)(1)

“Successor Note Guarantor”

   5.01(b)(1)

“Suspended Covenants”

   4.17(a)(2)

“Suspension Date”

   4.17(a)

“Suspension Period”

   4.17(b)

“Transfer”

   5.01(b)

“Unrestricted Note”

   2.3(i) of
Appendix A

Section 1.03. Incorporation by Reference of TIA.

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.

 

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The following TIA terms used in this Indenture have the following meanings:

“Commission” means the SEC;

“indenture securities” means the Notes;

“indenture security Holder” means a Holder of a Note;

“indenture to be qualified” means this Indenture;

“indenture trustee” or “institutional trustee” means the Trustee; and

“obligor” on the Notes, the Holdings Guarantee and the Note Guarantees means the Issuer, Holdings and the Note Guarantors, respectively, and any successor obligor upon the Notes, the Holdings Guarantee and the Note Guarantees, respectively.

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

Section 1.04.  Rules of Construction.

Unless the context otherwise requires:

(i) a term has the meaning assigned to it;

(ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(iii) “or” is not exclusive;

(iv) words in the singular include the plural, and in the plural include the singular;

(v) “will” shall be interpreted to express a command;

(vi) provisions apply to successive events and transactions;

(vii) references to sections of, or rules under, the Securities Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

(viii) unless the context otherwise requires, any reference to an “Article,” “Section” or “clause” refers to an Article, Section or clause, as the case may be, of this Indenture;

(ix) (1) unsecured Indebtedness shall not be deemed to be subordinated or junior to Secured Indebtedness merely because it is unsecured, (2) Senior Indebtedness shall not be deemed to be subordinated or junior to any other Senior Indebtedness merely because it has a junior priority with respect to the same collateral and (3) Indebtedness that is not guaranteed shall not be deemed to be subordinated or junior to Indebtedness that is guaranteed merely because of such guarantee; and

 

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(x) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not any particular Article, Section, clause or other subdivision.

Section 1.05. Acts of Holders.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Proof of execution of any such instrument or of a writing appointing any such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section 1.05.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

(c) The ownership of Notes shall be proved by the Note Register.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

(e) The Issuer may, in the circumstances permitted by the TIA, set a record date for purposes of determining the identity of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or take any other act, or to vote or consent to any action by vote or consent authorized or permitted to be given or taken by Holders. Unless otherwise specified, if not set by the Issuer prior to the first solicitation of a Holder made by any Person in respect of any such action, or in the case of any such vote, prior to such vote, any such record date shall be the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee prior to such solicitation.

(f) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each such different part.

(g) Without limiting the generality of the foregoing, a Holder, including DTC that is the Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in writing, any

 

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request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and DTC that is the Holder of a Global Note may provide its proxy or proxies to the beneficial owners of interests in any such Global Note through such depositary’s standing instructions and customary practices.

(h) The Issuer may fix a record date for the purpose of determining the Persons who are beneficial owners of interests in any Global Note held by DTC entitled under the procedures of such depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other action shall be valid or effective if made, given or taken more than 90 days after such record date.

ARTICLE 2

THE NOTES

Section 2.01. Form and Dating; Terms.

(a) General . Provisions relating to the Notes are set forth in Appendix A , which is hereby incorporated in and expressly made a part of this Indenture. The (a) Initial Notes and the Trustee’s certificate of authentication and (b) any Additional Notes (if issued as Transfer Restricted Notes) and the Trustee’s certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Exchange Notes and any Additional Notes issued other than as Transfer Restricted Notes and the Trustee’s certificate of authentication shall each be substantially in the form of Exhibit B hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuer, Holdings or any Note Guarantor is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Note shall be dated the date of its authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1 in excess thereof.

(b) Terms . The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited.

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Issuer, Holdings, the Note Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

Additional Notes ranking pari passu with the Initial Notes may be created and issued from time to time by the Issuer without notice to or consent of the Holders and shall be consolidated with and form a single class with the Initial Notes and shall have the same terms as to status, redemption or otherwise as the Initial Notes; provided that the Issuer’s ability to issue Additional Notes shall be subject to the Issuer’s compliance with Section 4.09 hereof. Any Additional Notes shall be issued with the benefit of an indenture supplemental to this Indenture.

 

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Section 2.02. Execution and Authentication.

At least one Officer shall execute the Notes on behalf of the Issuer by manual or facsimile signature.

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid.

A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated substantially in the form of Exhibit A or Exhibit B attached hereto, as the case may be, by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been duly authenticated and delivered under this Indenture.

On the Issue Date, the Trustee shall, upon receipt of an Issuer Order (an “ Authentication Order ”), authenticate and deliver the Initial Notes. In addition, at any time, from time to time, the Trustee shall upon an Authentication Order authenticate and deliver any Additional Notes and Exchange Notes for an aggregate principal amount specified in such Authentication Order for such Additional Notes or Exchange Notes issued hereunder.

The Trustee shall not be required to authenticate any Additional Notes, nor will it be liable for its refusal to authenticate any Additional Notes, if the authentication of such Additional Notes will affect the Trustee’s own rights, duties or immunities under the Notes and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee or if the Trustee, being advised by counsel, determines that such action may not lawfully be taken or may expose the Trustee to personal liability to existing Holders or others.

The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Issuer.

Section 2.03. Registrar and Paying Agent.

The Issuer shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“ Registrar ”) and an office or agency where Notes may be presented for payment (“ Paying Agent ”). The Registrar shall keep a register of the Notes (“ Note Register ”) and of their transfer and exchange. The Issuer may appoint one or more co-registrars and one or more additional paying agents. The term “ Registrar ” includes any co-registrar, and the term “ Paying Agent ” includes any additional paying agent. The Issuer may change any Paying Agent or Registrar without prior notice to any Holder. The Issuer shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Issuer or any of its Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

The Issuer initially appoints The Depository Trust Company (“ DTC ”) to act as Depositary with respect to the Global Notes.

The Issuer initially appoints the Trustee to act as the Paying Agent and Registrar for the Notes and to act as Custodian with respect to the Global Notes.

Section 2.04. Paying Agent to Hold Money in Trust.

 

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The Issuer shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, or Additional Interest, if any, or interest on the Notes, and will notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary of the Issuer) shall have no further liability for the money. If the Issuer or a Subsidiary of the Issuer acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee shall serve as Paying Agent for the Notes.

Section 2.05. Holder Lists.

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least two Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes, and the Issuer shall otherwise comply with TIA Section 312(a).

Section 2.06. Transfer and Exchange.

(a) The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with Appendix A .

(b) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

(c) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Holders shall be required to pay any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).

(d) Neither the Registrar nor the Issuer shall be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

(e) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

(f) The Issuer shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between a Record Date and the next succeeding Interest Payment Date.

 

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(g) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest (including Additional Interest, if any) on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.

(h) Upon surrender for registration of transfer of any Note at the office or agency of the Issuer designated pursuant to Section 4.02 hereof, the Issuer shall execute, and the Trustee shall authenticate and mail, in the name of the designated transferee or transferees, one or more replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.

(i) At the option of the Holder, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and mail, the replacement Global Notes and Definitive Notes which the Holder making the exchange is entitled to in accordance with the provisions of Section 2.02 hereof.

(j) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

Section 2.07. Replacement Notes.

If any mutilated Note is surrendered to the Trustee, the Registrar or the Issuer and the Trustee receives evidence to its satisfaction of the ownership and destruction, loss or theft of any Note, the Issuer shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Issuer, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuer and the Trustee may charge for their expenses in replacing a Note.

Every replacement Note is a contractual obligation of the Issuer and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

Section 2.08. Outstanding Notes.

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Note.

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.

If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

 

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If the Paying Agent (other than the Issuer, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.

Section 2.09. Treasury Notes.

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer, or by any Affiliate of the Issuer, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Trust Officer of the Trustee actually knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right to deliver any such direction, waiver or consent with respect to the Notes and that the pledgee is not the Issuer or any obligor upon the Notes or any Affiliate of the Issuer or of such other obligor.

Section 2.10. Temporary Notes.

Until certificates representing Notes are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Issuer considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes.

Holders and beneficial holders, as the case may be, of temporary Notes shall be entitled to all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this Indenture.

Section 2.11. Cancellation.

The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee or, at the direction of the Trustee, the Registrar or the Paying Agent and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy cancelled Notes in accordance with its customary procedures (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all cancelled Notes shall upon the written request of the Issuer be delivered to the Issuer. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.

Section 2.12. Defaulted Interest.

If the Issuer defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Issuer shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held

 

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in trust for the benefit of the Persons entitled to such defaulted interest as provided in this Section 2.12. The Trustee shall fix or cause to be fixed each such special record date and payment date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. The Trustee shall promptly notify the Issuer of such special record date. At least 15 days before the special record date, the Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) shall mail or cause to be mailed, first-class postage prepaid, to each Holder a notice at his or her address as it appears in the Note Register that states the special record date, the related payment date and the amount of such interest to be paid.

Subject to the foregoing provisions of this Section 2.12 and for greater certainty, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.

Section 2.13. CUSIP Numbers.

The Issuer in issuing the Notes may use CUSIP numbers (if then generally in use) and, if so, the Trustee shall use CUSIP numbers in notices of redemption as a convenience to Holders; provided , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will as promptly as practicable notify the Trustee in writing of any change in the CUSIP numbers.

Section 2.14. Calculation of Principal Amount of Notes.

The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes at such date of determination. With respect to any matter requiring consent, waiver, approval or other action of the Holders of a specified percentage of the principal amount of all the Notes, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes, the Holders of which have so consented, by (b) the aggregate principal amount, as of such date of determination, of the Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.08 and Section 2.09 of this Indenture. Any such calculation made pursuant to this Section 2.14 shall be made by the Issuer and delivered to the Trustee pursuant to an Officer’s Certificate.

ARTICLE 3

REDEMPTION

Section 3.01. Notices to Trustee.

If the Issuer elects to redeem Notes pursuant to Section 3.07 hereof, it shall furnish to the Trustee, at least 5 Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to Section 3.03 hereof but not more than 70 days before a redemption date, an Officer’s Certificate setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of the Notes to be redeemed and (iv) the redemption price.

Section 3.02. Selection of Notes to Be Redeemed or Purchased.

 

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If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee shall select the Notes to be redeemed or purchased (a) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed or (b) on a pro rata basis or, to the extent that selection on a pro rata basis is not practicable, by lot or by such other method the Trustee shall deem fair and appropriate in accordance with the procedures of DTC, and in each case, such manner as complies with applicable legal requirements. In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption or purchase.

The Trustee shall promptly notify the Issuer in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected shall be in amounts of $2,000 or whole multiples of $1 in excess thereof; no Notes of $2,000 or less shall be redeemed or purchased in part, except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1 in excess thereof, shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.

Section 3.03. Notice of Redemption.

Subject to Section 3.09 hereof, the Issuer shall mail or cause to be mailed by first-class mail, postage prepaid (or electronically transmit), notices of redemption at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at such Holder’s registered address or otherwise in accordance with the procedures of DTC, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 13 hereof. Except as set forth in Section 3.07 hereof, notices of redemption may not be conditional.

The notice shall identify the Notes to be redeemed and shall state:

(i) the redemption date;

(ii) the redemption price;

(iii) if any Note is to be redeemed in part only, the portion of the principal amount of that Note that is to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion of the original Note representing the same indebtedness to the extent not redeemed will be issued in the name of the Holder of the Notes upon cancellation of the original Note;

(iv) the name and address of the Paying Agent;

(v) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(vi) that, unless the Issuer defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;

 

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(vii) the paragraph or subparagraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;

(viii) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes; and

(ix) if in connection with a redemption pursuant to Section 3.07(b) hereof, any condition to such redemption.

At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at the Issuer’s expense; provided that the Issuer shall have delivered to the Trustee, at least 5 Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to this Section 3.03 (unless a shorter notice shall be agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

Section 3.04. Effect of Notice of Redemption.

Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price (except as provided for in Section 3.07(b)). The notice, if mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note.

Section 3.05. Deposit of Redemption or Purchase Price.

Prior to 10:00 a.m. (New York City time) on the redemption or purchase date, the Issuer shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued and unpaid interest (including Additional Interest, if any) on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest on, all Notes to be redeemed or purchased.

If the Issuer complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest to the redemption or purchase date shall be paid to the Person in whose name such Note was registered at the close of business on such Record Date. If any Note called for redemption or purchase shall not be so paid upon surrender for redemption or purchase because of the failure of the Issuer to comply with the preceding paragraph, interest (including Additional Interest, if any) shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest accrued to the redemption or purchase date not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

Section 3.06. Notes Redeemed or Purchased in Part.

Upon surrender of a Note that is redeemed or purchased in part, the Issuer shall issue and the Trustee shall authenticate for the Holder at the expense of the Issuer a new Note equal in principal

 

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amount to the unredeemed or unpurchased portion of the Note surrendered representing the same indebtedness to the extent not redeemed or purchased; provided that each new Note will be in a principal amount of $2,000 or an integral multiple of $1 in excess thereof. It is understood that, notwithstanding anything in this Indenture to the contrary, only an Authentication Order and not an Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate such new Note.

Section 3.07. Optional Redemption.

(a) At any time and from time to time prior to April 15, 2013, the Issuer may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice mailed by first class mail to the registered address of each Holder (or electronically transmitted) or otherwise in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the date of redemption, subject to the rights of Holders of Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(b) At any time and from time to time on or prior to April 15, 2013, the Issuer may redeem in the aggregate up to 100% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent of the Issuer, in each case to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer from it, at a redemption price (expressed as a percentage of the principal amount thereof) of 112.000%, plus accrued and unpaid interest and Additional Interest, if any, to the date of redemption (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided, however, that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed (or electronically transmitted) to each Holder of Notes being redeemed and otherwise in accordance with the procedures set forth in this Indenture. Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

(c) Except pursuant to clauses (a) or (b) of this Section 3.07, the Notes will not be redeemable at the Issuer’s option prior to April 15, 2013.

(d) On or after April 15, 2013, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time, upon notice pursuant to Section 3.03 hereof at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable date of redemption, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on April 15 of each of the years indicated below:

 

Year

   Redemption
Price
 

2013

     106.000

2014

     103.000

2015 and thereafter

     100.000

(e) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

 

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Section 3.08. Mandatory Redemption.

The Issuer shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes.

Section 3.09. Offers to Repurchase by Application of Excess Proceeds.

(a) In the event that, pursuant to Section 4.10 hereof, the Issuer shall be required to commence an Asset Sale Offer, it shall follow the procedures specified below.

(b) The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “ Offer Period ”). No later than five Business Days after the termination of the Offer Period (the “ Purchase Date ”), the Issuer shall apply all Excess Proceeds (the “ Offer Amount ”) to the purchase of Notes and, if required, Senior Pari Passu Indebtedness (on a pro rata basis, if applicable), or, if less than the Offer Amount has been tendered, all Notes and Senior Pari Passu Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.

(c) If the Purchase Date is on or after a Record Date and on or before the related Interest Payment Date, any accrued and unpaid interest and Additional Interest, if any, up to but excluding the Purchase Date, shall be paid to the Person in whose name a Note is registered at the close of business on such Record Date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

(d) The Issuer shall send, by first-class mail (or electronic transmission) at least 30 but not more than 60 days before the Purchase Date, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders and holders of Senior Pari Passu Indebtedness. The notice, which shall govern the terms of the Asset Sale Offer, shall state:

(1) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open;

(2) the Offer Amount, the purchase price and the Purchase Date;

(3) that any Note not tendered or accepted for payment shall continue to accrue interest;

(4) that, unless the Issuer defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Purchase Date;

(5) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in amounts of $2,000 or in integral multiples of $1 in excess thereof only;

(6) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Note completed, or transfer by book-entry

 

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transfer, to the Issuer, the Depositary, if appointed by the Issuer, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

(7) that Holders shall be entitled to withdraw their election if the Issuer, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

(8) that, if the aggregate principal amount of Notes and Senior Pari Passu Indebtedness surrendered by the holders thereof exceeds the Offer Amount, the Trustee shall select the Notes and such Senior Pari Passu Indebtedness to be purchased in compliance with the requirements of the principal national securities exchange, if any, on which such Notes are listed or, if such Notes are not so listed, on a pro rata basis, by lot or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies with applicable legal requirements) on a pro rata basis based on the accreted value or principal amount of the Notes or such Senior Pari Passu Indebtedness tendered (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $2,000 or in integral multiples of $1 in excess thereof, shall be purchased); and

(9) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer) representing the same indebtedness to the extent not repurchased.

(e) On or before the Purchase Date, the Issuer shall, to the extent lawful, (1) accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof validly tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered and (2) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof so tendered.

(f) The Issuer, the Depositary or the Paying Agent, as the case may be, shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes properly tendered by such Holder and accepted by the Issuer for purchase, and the Issuer shall promptly issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and mail or deliver (or cause to be transferred by book-entry) such new Note to such Holder (it being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate and mail or deliver such new Note) in a principal amount equal to any unpurchased portion of the Note surrendered representing the same indebtedness to the extent not repurchased; provided , that each such new Note shall be in a principal amount of $2,000 or an integral multiple of $1 in excess thereof. Any Note not so accepted shall be promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer shall notify the Holders of the results of the Asset Sale Offer on or as soon as practicable after the Purchase Date.

Other than as specifically provided in this Section 3.09 or Section 4.10 hereof, any purchase pursuant to this Section 3.09 shall be made pursuant to the applicable provisions of Sections 3.01 through 3.06 hereof.

 

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ARTICLE 4

COVENANTS

Section 4.01. Payment of Notes.

The Issuer shall pay or cause to be paid the principal of, premium, if any, Additional Interest, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, Additional Interest, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Issuer or a Wholly Owned Subsidiary, holds as of noon Eastern Time on the due date money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, Additional Interest, if any, and interest then due.

The Issuer shall pay all Additional Interest, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement.

The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest (without regard to any applicable grace period) at the same rate to the extent lawful.

Section 4.02. Maintenance of Office or Agency.

The Issuer shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

Subject to the preceding paragraph, the Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency for such purposes. The Issuer shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Issuer hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Issuer in accordance with Section 2.03 hereof.

Section 4.03. Reports and Other Information.

(a) Notwithstanding that the Issuer may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Issuer shall file with the SEC (and provide the Trustee and Holders with copies thereof by posting such information on its primary website),

 

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(1) as soon as available and in any event on or before the date on which such reports would be required to be filed with the SEC (if the Issuer were a non-accelerated filer subject to Section 13 or 15(d) of the Exchange Act), annual reports on Form 10-K (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form),

(2) as soon as available and in any event on or before the date on which such reports would be required to be filed with the SEC (if the Issuer were a non-accelerated filer subject to Section 13 or 15(d) of the Exchange Act), reports on Form 10-Q (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form),

(3) promptly from time to time after the occurrence of an event required to be therein reported (and in any event within the time period specified for filing current reports on Form 8-K by the SEC), reports on Form 8-K (or any successor or comparable form), and

(4) any other information, documents and other reports which the Issuer would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;

in each case in a manner that complies in all material respects with the requirements specified in such form.

Notwithstanding the foregoing, all required reports, information and documents referred to in this Section 4.03(a) shall be deemed to be delivered to the Trustee at the time when (i) the Issuer has filed such reports, information and documents with the SEC via the EDGAR filing system (or any successor system) and (ii) such reports are publicly available.

(b) If at any time any direct or indirect parent of the Issuer (x) becomes a Guarantor (there being no obligation of any parent to do so), (y) holds no material assets other than cash, Cash Equivalents and the Capital Stock of the Issuer or of any direct or indirect parent corporation of the Issuer (and performs the related incidental activities associated with such ownership) and (z) complies with the requirements of Rule 3-10 of Regulation S-X promulgated by the SEC (or any successor provision), the reports, information and other documents required to be filed and furnished to Holders of the Notes pursuant to this Section 4.03 may, at the option of the Issuer, be filed or furnished by and be those of such direct and indirect parent of the Issuer rather than the Issuer.

(c) The Issuer will make such information available to prospective investors upon request. In addition, the Issuer has agreed that, for so long as any Notes remain outstanding during any period when it is not subject to Section 13 or 15(d) of the Exchange Act, it will furnish to the Holders of the Notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(d) If the Issuer has designated any of its Subsidiaries as Unrestricted Subsidiaries and such Unrestricted Subsidiaries, either individually or collectively, would otherwise have been a Significant Subsidiary, then the quarterly and annual financial information required by this Section 4.03 shall include a reasonably detailed unaudited discussion (as determined in good faith by senior management of the Issuer) of the financial condition and results of operations of the Issuer and the Restricted Subsidiaries of the Issuer separate from the financial condition and results of operations of the Unrestricted Subsidiaries.

 

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(e) Notwithstanding anything herein to the contrary, the Issuer will not be deemed to have failed to comply with any of its agreements under this Section 4.03 for purposes of Section 6.01(a)(4) until 120 days after the date any report hereunder is required to be filed with the SEC (or otherwise made available to Holders or the Trustee) pursuant to this Section 4.03.

Section 4.04. Compliance Certificate.

The Issuer, Holdings and each Note Guarantor (to the extent that Holdings or such Note Guarantor is so required under the TIA) shall deliver to the Trustee, within 120 days after the end of each fiscal year ending after the Issue Date, a certificate from the principal executive officer, principal financial officer or principal accounting officer stating, as to such Officer signing such certificate, that to the best of his or her knowledge, the Issuer has complied with each and every condition and covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions, covenants and conditions of this Indenture (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action the Issuer is taking or proposes to take with respect thereto). The Issuer, Holdings and the Note Guarantors shall also comply with Section 314(a)(4) of the TIA.

Section 4.05. Taxes.

The Issuer shall pay, and shall cause each of its Restricted Subsidiaries to pay, prior to delinquency, all material taxes, assessments and governmental levies except such as are contested in good faith and by appropriate negotiations or proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.

Section 4.06. Stay, Extension and Usury Laws.

The Issuer, Holdings and each of the Note Guarantors covenant (to the extent that they may lawfully do so) that they shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer, Holdings and each of the Note Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant that they shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.

Section 4.07. Limitation on Restricted Payments.

(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly:

(I) declare or pay any dividend or make any distribution on account of the Issuer’s or any of the Restricted Subsidiaries’ Equity Interests, including any payment made in connection with any merger, amalgamation or consolidation involving the Issuer other than:

(A) dividends or distributions by the Issuer payable solely in Equity Interests (other than Disqualified Stock) of the Issuer; or

(B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Restricted

 

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Subsidiary, the Issuer or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities;

(II) purchase or otherwise acquire or retire for value any Equity Interests of the Issuer or any direct or indirect parent of the Issuer, including in connection with any merger or consolidation;

(III) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of the Issuer or any Note Guarantor other than the payment, redemption, repurchase, defeasance, acquisition or retirement of:

(A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement; and

(B) Indebtedness permitted under clauses (7) and (9) of Section 4.09(b); or

(IV) make any Restricted Investment (all such payments and other actions set forth in clauses (I) through (IV) above being collectively referred to as “ Restricted Payments ”), unless, at the time of such Restricted Payment:

(A) no Default shall have occurred and be continuing or would occur as a consequence thereof;

(B) immediately after giving effect to such transaction on a pro forma basis, the Issuer could Incur $1.00 of additional Indebtedness under Section 4.09(a); and

(C) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and the Restricted Subsidiaries after the Original Issue Date (including Restricted Payments permitted by clauses (1), (4) (only to the extent of one-half of the amounts paid pursuant to such clause), (6), (8) and (18) of Section 4.07(b), but excluding all other Restricted Payments permitted by Section 4.07(b), is less than the amount equal to the Cumulative Credit.

(b) The foregoing provisions of Section 4.07(a) hereof shall not prohibit:

(1) the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Indenture;

(2) (a) the redemption, repurchase, retirement or other acquisition of any Equity Interests (“ Retired Capital Stock ”) or Subordinated Indebtedness of the Issuer, any direct or indirect parent of the Issuer or any Note Guarantor in exchange for, or out of the proceeds of, the substantially concurrent sale of Equity Interests of the Issuer or any direct or indirect parent of the Issuer or contributions to the equity capital of the Issuer (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of the Issuer) (collectively, including any such contributions, “ Refunding Capital Stock ”); and (b) the declaration and payment of accrued dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of the Issuer) of Refunding Capital Stock and if immediately prior to the retirement of

 

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Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6) of this Section 4.07(b) and not made pursuant to this clause (2)(b), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent of the Issuer) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Retired Capital Stock immediately prior to such retirement;

(3) the redemption, repurchase, defeasance or other acquisition or retirement of Subordinated Indebtedness of the Issuer or any Note Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale (or as promptly as practicable after giving any requisite notice to the Holders of such Subordinated Indebtedness) of, new Indebtedness of the Issuer or a Note Guarantor that is Incurred in accordance with Section 4.09 so long as:

(a) the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable), plus any accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired plus any tender premiums, defeasance costs or other fees and expenses incurred in connection therewith),

(b) such new Indebtedness is subordinated to the Notes or the related Note Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,

(c) such new Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) 91 days following the maturity date of the Notes, and

(d) such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired that were due on or after the date one year following the maturity date of any Notes then outstanding were instead due on such date one year following the maturity date of such Notes (provided that, in the case of this sub-clause (d)(y), such Indebtedness does not provide for any scheduled principal payments prior to the maturity date of the Notes in excess of, or prior to, the scheduled principal payments due prior to such maturity for the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased);

(4) a Restricted Payment to pay for the redemption, repurchase, retirement or other acquisition for value of Equity Interests of the Issuer or any direct or indirect parent of the Issuer held by any future, present or former employee, director or consultant of the Issuer or any direct or indirect parent of the Issuer or any Subsidiary of the Issuer pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided, however , that the aggregate amounts paid under this clause (4) do not exceed $30.0 million in any calendar year (with unused amounts in any calendar year being permitted to be carried over for the two succeeding calendar years subject to a maximum payment

 

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(without giving effect to the following proviso) of $60.0 million in any calendar year); provided , further, however, that such amount in any calendar year may be increased by an amount not to exceed:

(a) the cash proceeds received by the Issuer or any of the Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of the Issuer or any direct or indirect parent of the Issuer (to the extent contributed to the Issuer) to members of management, directors or consultants of the Issuer and the Restricted Subsidiaries or any direct or indirect parent of the Issuer that occurs after the Original Issue Date; plus

(b) the cash proceeds of key man life insurance policies received by the Issuer or any direct or indirect parent of the Issuer (to the extent contributed to the Issuer) or the Restricted Subsidiaries after the Original Issue Date; less

(c) the amount of any Restricted Payments previously made pursuant to sub-clauses (a) and (b) of this second proviso of clause (4);

provided that the Issuer may elect to apply all or any portion of the aggregate increase contemplated by sub-clauses (a) and (b) above in any calendar year;

(5) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Issuer or any of the Restricted Subsidiaries issued or Incurred in accordance with Section 4.09;

(6) (a) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date, (b) a Restricted Payment to any direct or indirect parent of the Issuer, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent of the Issuer issued after the Issue Date and (c) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (2) of this paragraph; provided, however , that, (x) in the case of sub-clauses (a), (b) and (c) of this clause (6), for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or Refunding Capital Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis, the Issuer would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00 and (y) the aggregate amount of dividends declared and paid pursuant to sub-clauses (a) and (b) of this clause (6) does not exceed the net cash proceeds actually received by the Issuer from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date;

(7) Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (7) that are at that time outstanding, not to exceed the greater of $75.0 million and 0.625% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided , that the dollar amount of Investments made pursuant to this clause (7) may be reduced by the Fair Market Value of the proceeds received by the Issuer and/or its Restricted Subsidiaries from the subsequent sale, disposition or other transfer of such Investments (with such Fair Market Value being measured at the time of such sale, disposition or other transfer without giving effect to subsequent changes in value);

 

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(8) the payment of dividends on the Issuer’s common stock (or a Restricted Payment to any direct or indirect parent of the Issuer to fund the payment by such direct or indirect parent of the Issuer of dividends on such entity’s common stock) of up to 6.0% per annum of the net cash proceeds received (including, without limitation, contributions to the Issuer with the proceeds of sales of common stock of any direct or indirect parent) by the Issuer from any public offering of common stock of the Issuer or any direct or indirect parent of the Issuer;

(9) Restricted Payments that are made with Excluded Contributions;

(10) other Restricted Payments in an aggregate amount taken together with all other Restricted Payments made pursuant to this clause (10) not to exceed the greater of $125.0 million and 1.00% of Total Assets at the time made; provided that the aggregate amount of Restricted Payments made pursuant to this clause (10) for Restricted Payments of the types described in clauses (I) and (II) of the definition of Restricted Payment shall not exceed $25.0 million;

(11) the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Issuer or a Restricted Subsidiary by, Unrestricted Subsidiaries;

(12) the payment of dividends or other distributions to any direct or indirect parent of the Issuer in amounts required for such parent to pay federal, state or local income taxes (as the case may be) imposed directly on such parent to the extent such income taxes are attributable to the income of the Issuer and the Restricted Subsidiaries (including, without limitation, by virtue of such parent being the common parent of a consolidated or combined tax group of which the Issuer and/or the Restricted Subsidiaries are members);

(13) the payment of any Restricted Payment, if applicable:

(a) in amounts required for any direct or indirect parent of the Issuer, if applicable, to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of the Issuer, if applicable, and general corporate overhead expenses of any direct or indirect parent of the Issuer, if applicable, in each case to the extent such fees and expenses are attributable to the ownership or operation of the Issuer, if applicable, and its Restricted Subsidiaries (provided, that for so long as such direct or indirect parent owns no assets other than the Equity Interests in the Issuer or another direct or indirect parent of the Issuer, such fees and expenses shall be deemed for purposes of this clause (13)(a) to be so attributable to such ownership or operation);

(b) in amounts required for any direct or indirect parent of the Issuer, if applicable, to pay interest and/or principal on Indebtedness that satisfies each of the following: (i) the proceeds of which have been contributed to the Issuer or any of the Restricted Subsidiaries and (ii) that has been guaranteed by, or is otherwise considered Indebtedness of, the Issuer Incurred in accordance with Section 4.09; and

(c) in amounts required for any direct or indirect parent of the Issuer to pay fees and expenses, other than to Affiliates of the Issuer, related to any unsuccessful equity or debt offering of such parent;

(14) Restricted Payments used to fund the Merger Transactions and the payment of fees and expenses incurred in connection with the Merger Transactions (including as a result of the cancellation or vesting of outstanding options and other equity-based awards in connection

 

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therewith) as described in the Existing Notes Offering Memorandum (including payments made pursuant to or as contemplated by the Merger Documents, whether payable on the Original Issue Date or thereafter) or owed by the Issuer, any direct or indirect parent of the Issuer or any Restricted Subsidiary to Affiliates, in each case to the extent permitted by Section 4.11; provided that payments to Affiliates due to the termination of the Management Fee Agreement or similar agreements shall be permitted by this clause (14) only to the extent such termination is attributable to an underwritten registered public offering of the common stock of the Issuer or any direct or indirect parent of the Issuer or to a Change of Control;

(15) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(16) purchases of receivables pursuant to a Securitization Repurchase Obligation in connection with a Permitted Securitization Financing and the payment or distribution of Securitization Fees;

(17) Restricted Payments by the Issuer or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock or debt securities that are convertible into, or exchangeable for, Capital Stock of any such Person;

(18) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions described under, or provisions similar to those described under Sections 4.10 and 4.14; provided that a Change of Control Offer or Asset Sale Offer, as applicable, has been made and all Notes tendered by Holders of the Notes in connection with a Change of Control or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value;

(19) cash dividends or other distributions in respect of the Issuer’s Capital Stock used to, or the making of loans to any direct or indirect parent of the Issuer in order to, fund the payment of expenses of the type and in the amount described in clauses (3) and (5) of Section 4.11(b) to the extent that such amounts are not paid directly by the Issuer or any its Subsidiaries;

(20) the redemption, repurchase, defeasance or other acquisition or retirement of the Existing Senior Subordinated Notes and the related Existing Senior Subordinated Note Guarantees; provided that the aggregate amounts paid under this clause (20) do not exceed $50.0 million; and

(21) the redemption of the Convertible Notes and the related Convertible Note Guarantees not owned by the Apollo Sponsors upon a Qualified Public Offering (as defined in the Convertible Note Indenture) or at any time thereafter at a price equal to no greater than 90% of the principal amount thereof in accordance with the terms of the Convertible Note Indenture; provided that to the extent the Issuer uses the proceeds of the substantially concurrent sale of Equity Interests of the Issuer or any direct or indirect parent of the Issuer or contributions to the equity capital of the Issuer to redeem the Convertible Notes not owned by the Apollo Sponsors, such redemption shall be deemed to have been made pursuant to clause 2(a) above.

provided, however , that at the time of, and after giving effect to, any Restricted Payment permitted under clause (6), (7), (10), (11) or (14) (with respect to payments owed to the Sponsors or their Affiliates as

 

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permitted by Section 4.11) of this Section 4.07(b), no Default shall have occurred and be continuing or would occur as a consequence thereof.

(c) For the avoidance of doubt, payments made after the Original Issue Date of the Cendant Contingent Liabilities shall not be deemed Restricted Payments.

(d) The amount of any Restricted Payment (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Issuer or such Subsidiary, as the case may be, pursuant to the Restricted Payment. Except as otherwise provided herein, the Fair Market Value of any assets or securities that are required to be valued by this Section 4.07 will be determined in good faith by senior management or the Board of Directors of the Issuer.

(e) As of the Issue Date, all of the Issuer’s Subsidiaries will be Restricted Subsidiaries. The Issuer will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and the Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of “Investments.” Such designation will only be permitted if a Restricted Payment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

(f) Notwithstanding the foregoing, the Issuer will not, and will not permit any of the Restricted Subsidiaries to, pay any cash dividend or make any cash distribution on account of the Issuer’s Equity Interests or purchase for cash or otherwise redeem, acquire or retire for cash any Equity Interests of the Issuer or any direct or indirect parent of the Issuer or guarantee any Indebtedness of an Affiliate of the Issuer for the purposes of any of the foregoing, in each case for the benefit of the Sponsors, by means of (i) the application of the Cumulative Credit in accordance with the definition thereof and Section 4.07(a), (ii) utilization of clauses (1), (7), (10) or (11) of Section 4.07(b) or (iii) utilization of clauses (9), (10) or (18) of the definition of Permitted Investments, unless in each case at the time of such payment the Consolidated Leverage Ratio of the Issuer would have been equal to or less than 6.0 to 1.0 on a pro forma basis and otherwise in compliance with this Section 4.07.

Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.

(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

(1) (A) pay dividends or make any other distributions to the Issuer or any of the Restricted Subsidiaries (i) on its Capital Stock or (ii) with respect to any other interest or participation in, or measured by, its profits or (B) pay any Indebtedness owed to the Issuer or any of the Restricted Subsidiaries;

(2) make loans or advances to the Issuer or any of the Restricted Subsidiaries; or

(3) sell, lease or transfer any of its properties or assets to the Issuer or any of the Restricted Subsidiaries.

 

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(b) Section 4.08(a) hereof shall not apply to encumbrances or restrictions existing under or by reason of:

(1) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Credit Agreement and the other Credit Agreement Documents;

(2) the Extended Maturity Note Indentures and the Extended Maturity Notes and the Extended Maturity Notes Guarantees (and any exchange Extended Maturity Notes and guarantees thereof) and the Existing Indentures and the Existing Notes and the Existing Note Guarantees;

(3) applicable law or any applicable rule, regulation or order;

(4) any agreement or other instrument of a Person acquired by the Issuer or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or its Subsidiaries, or the property or assets of the Person or its Subsidiaries, so acquired;

(5) contracts or agreements for the sale of assets, including restrictions with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition;

(6) Secured Indebtedness otherwise permitted to be Incurred pursuant to Sections 4.09 and 4.12 hereof that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(7) restrictions on cash or other deposits (including escrowed funds) or net worth imposed by customers and franchisees under contracts entered into in the ordinary course of business;

(8) customary provisions in joint venture agreements and other similar agreements relating solely to such joint venture entered into in the ordinary course of business;

(9) purchase money obligations and Capitalized Lease Obligations, in each case for property acquired or leased in the ordinary course of business that impose restrictions of the nature discussed in clause (3) of Section 4.08(a) above on the property so acquired or leased;

(10) customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business that impose restrictions of the type described in clause (3) of Section 4.08(a) above on the property subject to such lease;

(11) any encumbrance or restriction on a Special Purpose Securitization Subsidiary that, in the good faith judgment of senior management or the Board of Directors of the Issuer, is reasonably required in connection therewith; provided, however , that such restrictions apply only to Special Purpose Securitization Subsidiaries;

(12) other Indebtedness or Disqualified Stock of the Issuer or any of its Restricted Subsidiaries or Preferred Stock of any Non-Guarantor Subsidiary that is Incurred subsequent to the Issue Date and permitted pursuant to Section 4.09; provided that such encumbrances and

 

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restrictions contained in any agreement or instrument will not materially affect the Issuer’s ability to make anticipated principal or interest payments on the Notes (as determined in good faith by senior management or the Board of Directors of the Issuer); or

(13) any encumbrances or restrictions of the type referred to in clauses (1), (2) and (3) of Section 4.08(a) imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (12) of this Section 4.08(b); provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of senior management or the Board of Directors of the Issuer, no more restrictive with respect to such encumbrances and other restrictions taken as a whole than those contained in the encumbrances or other restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

(c) For purposes of determining compliance with this Section 4.08, (1) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (2) the subordination of loans or advances made to the Issuer or a Restricted Subsidiary to other Indebtedness Incurred by the Issuer or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

Section 4.09. Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.

(a) (1) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (2) the Issuer shall not permit any of the Non-Guarantor Subsidiaries to issue any shares of Preferred Stock; provided, however , that the Issuer and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Non-Guarantor Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Issuer for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided, further, that the amount of Indebtedness that may be Incurred and Disqualified Stock or Preferred Stock that may be issued in each case pursuant to the foregoing by Non-Guarantor Subsidiaries shall not exceed $300.0 million at any one time outstanding.

(b) The limitations set forth in Section 4.09(a) hereof shall not apply to:

(1) the Incurrence by the Issuer or the Restricted Subsidiaries of Indebtedness under the Credit Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $3,300.0 million at any one time outstanding, less all principal repayments of Indebtedness Incurred under this clause (1) with the Net Proceeds of Asset Sales utilized in accordance with Section 4.10(b)(1)(a) that permanently reduces the commitments thereunder;

 

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(2) the Incurrence by the Issuer and the Note Guarantors of Indebtedness represented by the New Notes (not including any additional Extended Maturity Notes), the Extended Maturity Notes Guarantees and the Convertible Note Guarantees (including exchange Extended Maturity Notes and related guarantees thereof);

(3) Indebtedness of the Issuer and its Restricted Subsidiaries existing on the Original Issue Date (other than Indebtedness described in clause (1) of this Section 4.09(b) but including the Existing Notes and Existing Note Guarantees);

(4) (A) Indebtedness (including Capitalized Lease Obligations) Incurred by the Issuer or any of the Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of the Restricted Subsidiaries and Preferred Stock issued by any Non-Guarantor Subsidiaries to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) (whether through the direct purchase of property or the Capital Stock of any Person owning such property) and (B) Acquired Indebtedness, in an aggregate principal amount that, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (4), does not exceed $325.0 million;

(5) Indebtedness Incurred by the Issuer or any of the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;

(6) Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or acquisition price or similar obligations, in each case Incurred in connection with the Merger Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;

(7) Indebtedness of the Issuer to a Restricted Subsidiary; provided that, other than in the case of intercompany current liabilities Incurred in the ordinary course of business in connection with the cash management operations of the Issuer and its Subsidiaries to finance working capital needs of the Subsidiaries, any such Indebtedness owed to a Restricted Subsidiary that is not a Note Guarantor is expressly subordinated (if legally permissible) in right of payment to the obligations of the Issuer under the Notes; provided, further , that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (7);

(8) shares of Preferred Stock of a Non-Guarantor Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Non-Guarantor Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any

 

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other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (8);

(9) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that, other than in the case of intercompany current liabilities Incurred in the ordinary course of business in connection with the cash management operations of the Issuer and its Subsidiaries to finance working capital needs of its Subsidiaries, if a Note Guarantor incurs such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that is not a Note Guarantor, such Indebtedness is expressly subordinated (if legally permissible) in right of payment to the Note Guarantee of such Note Guarantor; provided, further , that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (9);

(10) Hedging Obligations that are not incurred for speculative purposes and are either (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; (C) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales; or (D) any combination of the foregoing;

(11) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Issuer or any Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice;

(12) Indebtedness or Disqualified Stock of the Issuer or any Restricted Subsidiary and Preferred Stock of any Non-Guarantor Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and deemed Incurred pursuant to this clause (12), does not exceed $325.0 million; provided that the aggregate principal amount or liquidation preference of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued, as the case may be, under this clause (12) by Non-Guarantor Subsidiaries shall not exceed $50.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (12) shall cease to be deemed Incurred or outstanding for purposes of this clause (12) but shall be deemed Incurred for purposes of Section 4.09(a) from and after the first date on which the Issuer, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.09(a) without reliance upon this clause (12));

(13) any guarantee by (x) the Issuer or a Note Guarantor of Indebtedness or other obligations of the Issuer or any of the Restricted Subsidiaries, (y) a Foreign Subsidiary of Indebtedness or other obligations of another Foreign Subsidiary or (z) a Non-Guarantor Subsidiary of Indebtedness or other obligations of another Non-Guarantor Subsidiary, in each case so long as the Incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of the Issuer or such Note Guarantor with respect to

 

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such Indebtedness shall be subordinated in right of payment to the Notes (in the case of a guarantee by the Issuer) or to such Note Guarantor’s Note Guarantee (in the case of a guarantee by a Note Guarantor) substantially to the same extent as such Indebtedness is subordinated to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable;

(14) the Incurrence by the Issuer or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or the Incurrence by a Non-Guarantor Subsidiary of Preferred Stock that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.09(a) and clauses (2), (3), (4), (14), (15), (19) and (20) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “ Refinancing Indebtedness ”) prior to its respective maturity; provided, however , that such Refinancing Indebtedness:

 

  (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the maturity date of any Notes then outstanding were instead due on such date one year following the maturity date of such Notes ( provided that any Refinancing Indebtedness Incurred in reliance on this sub-clause (A)(y) does not provide for any scheduled principal payments prior to the maturity date of the Notes in excess of, or prior to, the scheduled principal payments due prior to such maturity for the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased);

 

  (B) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or defeased or (y) 91 days following the maturity date of the Notes;

 

  (C) to the extent such Refinancing Indebtedness refinances (i) Indebtedness junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock, as the case may be;

 

  (D) is Incurred in an aggregate amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premiums (including tender premiums), expenses, defeasance costs and fees Incurred in connection with such refinancing;

 

  (E)

shall not include (x) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that is not a Note Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary that

 

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is a Note Guarantor, or (y) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and

 

  (F) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (4), (19) or (20), shall be deemed to have been Incurred and to be outstanding under such clause (4), (19) or (20), as applicable, and not this clause (14) for purposes of determining amounts outstanding under such clauses (4), (19) and (20);

and provided, further , that sub-clauses (A) and (B) of this clause (14) shall not apply to any refunding, refinancing or defeasance of any Bank Indebtedness or the Existing Senior Notes to the extent refinanced or defeased with the proceeds of Bank Indebtedness.

(15) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Issuer or any of the Restricted Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any of the Restricted Subsidiaries or merged or amalgamated with or into the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however , that after giving effect to such acquisition, merger or amalgamation and the Incurrence of such Indebtedness either:

 

  (1) the Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a); or

 

  (2) the Fixed Charge Coverage Ratio of the Issuer would be equal to or greater than immediately prior to such acquisition, merger or amalgamation;

(16) [Reserved];

(17) Indebtedness (x) arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business or other cash management services in the ordinary course of business; provided , that (i) such Indebtedness (other than credit or purchase cards) is extinguished within ten Business Days of notification to the Issuer of its incurrence and (ii) such Indebtedness in respect of credit or purchase cards is extinguished within 60 days from its Incurrence and (y) in respect of cash management lines or facilities so long as the Indebtedness deemed Incurred pursuant to this clause (17)(y) does not exceed $50.0 million at any one time outstanding;

(18) Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit or bank guarantee;

(19) Indebtedness or Disqualified Stock of the Issuer or any Restricted Subsidiary and Preferred Stock of any Non-Guarantor Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference not exceeding at any time outstanding 200% of the net cash proceeds received by the Issuer and the Restricted Subsidiaries since immediately after the Original Issue Date from the issue or sale of Equity Interests of the Issuer or any direct or indirect parent entity of the Issuer (which proceeds are contributed to the Issuer or a Restricted Subsidiary) or cash contributed to the capital of the Issuer (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, the Issuer or any of its Subsidiaries), as determined in accordance with clauses (2) and (3) of the definition of

 

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Cumulative Credit, to the extent such net cash proceeds or cash have not been applied to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);

(20) Indebtedness of Foreign Subsidiaries; provided, however , that the aggregate principal amount of Indebtedness Incurred under this clause (20), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (20), does not exceed the greater of $100.0 million at any one time outstanding and 0.75% of Total Assets at the time of Incurrence (it being understood that any Indebtedness Incurred under this clause (20) shall cease to be deemed Incurred or outstanding for purposes of this clause (20) but shall be deemed Incurred for purposes of Section 4.09(a) from and after the first date on which the Foreign Subsidiary could have Incurred such Indebtedness under Section 4.09(a), and the other provisions of this Indenture, without reliance upon this clause (20));

(21) Indebtedness of the Issuer or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;

(22) Indebtedness Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Issuer or any Restricted Subsidiary not in excess of the greater of $50.0 million at any one time outstanding and 0.5% of Total Assets at the time of Incurrence;

(23) Indebtedness issued by the Issuer or a Restricted Subsidiary to current or former officers, directors and employees thereof or any direct or indirect parent thereof, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer or any of its direct or indirect parent companies to the extent permitted under Section 4.07(b)(4);

(24) Indebtedness in respect of letters of credit issued under the Credit Agreement to support Contingent Obligations of the Issuer and the Restricted Subsidiaries arising under the Separation and Distribution Agreement not to exceed $300.0 million (including any refinancing thereof under the Credit Agreement);

(25) Indebtedness representing deferred compensation or other similar arrangements to employees and directors of the Issuer or any Subsidiary Incurred in the ordinary course of business or in connection with the Merger Transactions, an acquisition or any other Permitted Investment;

(26) Indebtedness of the Issuer or any Restricted Subsidiary in respect of Arbitrage Programs in an aggregate principal amount not to exceed the sum of (i) $10 million and (ii) the aggregate amount of Permitted Investments related thereto from time to time made after the Original Issue Date; and

(27) Indebtedness of the Issuer or any Restricted Subsidiary assumed in connection with the acquisition of homes and related assets in the ordinary course of its relocation services business, which Indebtedness in each case exists at the time of such acquisition and is not created in contemplation of such event.

For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the

 

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categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (1) through (27) above or is entitled to be Incurred pursuant to Section 4.09(a), the Issuer shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section 4.09 and the other provisions of this Indenture; provided that (A) all Indebtedness under the Credit Agreement outstanding on the Issue Date (except for Indebtedness outstanding under the Delayed Draw Term Loan, which Delayed Draw Term Loan shall be deemed to have been Incurred on the Issue Date pursuant to clause (14) above as Refinancing Indebtedness in respect of Secured Indebtedness existing on the Original Issue Date and permitted under clause (3) above) shall be deemed to have been Incurred on the Issue Date pursuant to clause (1) above and the Issuer shall not be permitted to later reclassify all or any portion of such Indebtedness under the Credit Agreement outstanding on the Issue Date, (B) the Issuer shall not be permitted to later reclassify or divide all or any portion of the Indebtedness Incurred pursuant to clause (24) above and (C) all Indebtedness outstanding on the Issue Date and Incurred on or after the Original Issue Date that was permitted under the Existing Indentures prior to the Issue Date pursuant to a clause corresponding to any of clauses (4), (12), (17)(y), (19), (20), (22), (24) or (26) above shall be deemed to have been Incurred and outstanding on the Issue Date pursuant to the corresponding clause above. Accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness with the same terms (including pay-in-kind payments with respect to the Existing Senior Toggle Notes), the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.09. Note Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.09.

For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.

The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

Section 4.10. Asset Sales .

(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, cause or make an Asset Sale, unless:

 

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(1) the Issuer or any of the Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by senior management or the Board of Directors of the Issuer) of the assets sold or otherwise disposed of; and

(2) at least 75% of the consideration therefor received by the Issuer or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided that the amount of:

(A) any liabilities (as shown on the Issuer’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of the Issuer or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Note Guarantee) (x) that are assumed by the transferee of any such assets and from which the Issuer and all of its Restricted Subsidiaries have been validly released by all creditors in writing or (y) in respect of which neither the Issuer nor any Restricted Subsidiary following such Asset Sale has any obligation,

(B) any notes or other obligations or other securities or assets received by the Issuer or such Restricted Subsidiary from such transferee that are converted by the Issuer or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received), and

(C) any Designated Non-cash Consideration received by the Issuer or any of the Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by senior management or the Board of Directors of the Issuer), taken together with all other Designated Non-cash Consideration received pursuant to this clause (C) that is at that time outstanding, not to exceed the greater of (x) 1.50% of Total Assets and (y) $175 million at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value), shall be deemed to be Cash Equivalents for purposes of this Section 4.10(a).

(b) Within 450 days after the Issuer’s or any Restricted Subsidiary’s receipt of the Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary may apply the Net Proceeds from such Asset Sale, at its option:

(1) to repay (other than obligations in respect of a Permitted Securitization Financing) (a) Secured Indebtedness, including Indebtedness under the Credit Agreement (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), (b) Indebtedness of a Non-Guarantor Subsidiary, or (c) Senior Pari Passu Indebtedness (provided that if the Issuer or any Note Guarantor shall so reduce Obligations under unsecured Senior Pari Passu Indebtedness, the Issuer will equally and ratably reduce Obligations under the Notes as provided in Section 3.07, through open market purchases (provided that such purchases are at or above 100% of the principal amount thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders of Notes to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, the pro rata principal amount of Notes), in each case other than Indebtedness owed to the Issuer or an Affiliate of the Issuer, or

 

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(2) to make an investment in any one or more businesses ( provided that if such investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary), assets, or property or capital expenditures, in each case (a) used or useful in a Similar Business or (b) that replace the properties and assets that are the subject of such Asset Sale.

In the case of clause (2) of this Section 4.10(b), a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment; provided that in the event such binding commitment is later canceled or terminated for any reason before such Net Proceeds are so applied, the Issuer or such Restricted Subsidiary may satisfy its obligation as to any Net Proceeds by entering into another binding commitment within nine months of such cancellation or termination of the prior binding commitment; provided , further that the Issuer or such Restricted Subsidiary may only enter into such a commitment under the foregoing provision one time with respect to each Asset Sale. Pending the final application of any such Net Proceeds, the Issuer or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Proceeds in any manner not otherwise prohibited by this Indenture. Any Net Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in the first sentence of this Section 4.10(b) (it being understood that any portion of such Net Proceeds used to make an offer to purchase Notes, as described in clause (1) of this Section 4.10(b), shall be deemed to have been invested within the meaning of the prior sentence whether or not such offer is accepted) will be deemed to constitute “ Excess Proceeds .” When the aggregate amount of Excess Proceeds exceeds $30.0 million, the Issuer shall make an offer to all Holders of Notes (and, at the option of the Issuer, to holders of any Senior Pari Passu Indebtedness) (an “ Asset Sale Offer ”) to purchase the maximum principal amount of Notes (and such Senior Pari Passu Indebtedness), that is at least $2,000 and an integral multiple of $1 that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Senior Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and Additional Interest, if any (or, in respect of such Senior Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture. The Issuer will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceeds $30.0 million by mailing or electronically transmitting the notice required pursuant to the terms of this Indenture, with a copy to the Trustee. To the extent that the aggregate amount of Notes (and such Senior Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes or any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes (and such Senior Pari Passu Indebtedness) surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes (and such Senior Pari Passu Indebtedness) to be purchased in the manner described in Section 3.09. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. For purposes of this clause (b) and the preceding clause (a), the terms “Asset Sale” and “Net Proceeds” shall include any “Asset Sale” and “Net Proceeds”, respectively, as defined in the Existing Senior Toggle Note Indenture as in effect immediately prior to the Issue Date.

(c) The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

Section 4.11. Transactions with Affiliates .

 

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(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an “ Affiliate Transaction ”) involving aggregate consideration in excess of $20.0 million, unless:

(1) such Affiliate Transaction is on terms that are not materially less favorable to the Issuer or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person; and

(2) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $60.0 million, the Issuer delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of the Issuer approving such Affiliate Transaction and set forth in an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (1) of this Section 4.11(a).

(b) The provisions of Section 4.11(a) hereof shall not apply to the following:

(1) transactions between or among the Issuer and/or any of the Restricted Subsidiaries and any merger of the Issuer and any direct parent of the Issuer; provided that at the time of such merger such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of the Issuer and such merger is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose;

(2) Restricted Payments permitted by Section 4.07 hereof and the definition of “Permitted Investments”;

(3) (x) the entering into of the Management Fee Agreement (and any amendment or modification of such agreement) and the payment (whether before or after the Issue Date) of, annual management, consulting, monitoring and advisory fees to the Sponsors (A) in an aggregate amount in any fiscal year not to exceed the sum of (1) the greater of $15.0 million and 2.0% of EBITDA (as defined in the relevant agreement) for the immediately preceding year, plus out of pocket costs and expenses in connection therewith and unpaid amounts accrued for prior periods; plus (2) any deferred fees (to the extent such fees were within such amount in clause (A) (1) above originally), plus (B) 1.0% of the aggregate transaction value or enterprise value with respect to transactions in which the Sponsors provide any transaction, advisory or other services and (y) the payment of the present value of all future amounts payable pursuant to any agreement referred to in clause (3)(x) above in connection with the termination of such agreement;

(4) the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Issuer or any Restricted Subsidiary or any direct or indirect parent of the Issuer;

(5) payments by the Issuer or any of the Restricted Subsidiaries to the Sponsors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, which payments are (x) made pursuant to the Management Fee Agreement or (y) approved by a majority of the Board of Directors (or a majority of the disinterested directors serving on the Board of Directors) of the Issuer in good faith;

 

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(6) transactions in which the Issuer or any of the Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (1) of the preceding paragraph;

(7) payments or loans (or cancellation of loans) to directors, officers, employees or consultants that are approved by a majority of the Board of Directors of the Issuer in good faith;

(8) any agreement as in effect as of the Issue Date or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the Holders of the Notes in any material respect than the original agreement as in effect on the Issue Date) or any transaction contemplated thereby as determined in good faith by senior management or the Board of Directors of the Issuer;

(9) the existence of, or the performance by the Issuer or any of the Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, and any agreement described in the Offering Memorandum under the heading “Certain Relationships and Related Transactions”, and, in each case, any amendment thereto or similar agreements that it may enter into thereafter; provided, however , that the existence of, or the performance by the Issuer or any of the Restricted Subsidiaries of its obligations under, any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (9) to the extent that the terms of any such existing agreement together with all amendments thereto, taken as a whole, or any such new agreement are not otherwise more disadvantageous to the Holders of the Notes in any material respect than the original agreement as in effect on the Issue Date;

(10) the execution of the Existing Notes Exchange Offers and the issuance of the Extended Maturity Notes pursuant to the Extended Maturity Note Indentures (and any amendment or modification thereto) and Convertible Notes pursuant to the Convertible Note Indenture (and any amendment or modification thereto) and the payment of any amounts pursuant to each of the Extended Maturity Note Indentures and the Convertible Note Indenture;

(11) transactions with joint ventures, customers, clients, suppliers or purchasers or sellers of goods or services or equipment, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture, which are fair to the Issuer and the Restricted Subsidiaries in the reasonable determination of the Board of Directors or the senior management of the Issuer, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(12) transactions pursuant to any Permitted Securitization Financing;

(13) the issuance of Equity Interests (other than Disqualified Stock) of the Issuer to any Person;

(14) the issuances of securities or the making of other payments, loans (or cancellation of loans), awards or grants in cash, securities or otherwise pursuant to, or the funding of or the entering into of, employment agreements or arrangements (including severance or termination provisions), stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of the Issuer or any direct or indirect parent of the Issuer or of a Restricted Subsidiary, as appropriate, in good faith;

 

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(15) the entering into of any tax sharing agreement or arrangement and any payments permitted by clause (12) of Section 4.07(b);

(16) any contribution to the capital of the Issuer;

(17) transactions permitted by, and complying with, the provisions of Section 5.01;

(18) transactions between the Issuer or any of the Restricted Subsidiaries and any Person, a director of which is also a director of the Issuer or any direct or indirect parent of the Issuer; provided, however , that such director abstains from voting as a director of the Issuer or such direct or indirect parent, as the case may be, on any matter involving such other Person;

(19) pledges of Equity Interests of Unrestricted Subsidiaries; and

(20) intercompany transactions undertaken in good faith (as certified by a responsible financial or accounting officer of the Issuer in an Officer’s Certificate) for the purpose of improving the consolidated tax efficiency of the Issuer and its Subsidiaries and not for the purpose of circumventing any covenant set forth in this Indenture.

Section 4.12. Liens .

The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer to exist any Lien on any asset or property of the Issuer or such Restricted Subsidiary securing Indebtedness unless the Notes or, in respect of Liens on any asset or property of a Restricted Subsidiary, any Note Guarantee of such Restricted Subsidiary, are equally and ratably secured with (or on a senior basis to, in the case of obligations subordinated in right of payment to the Notes or the Note Guarantees, as the case may be) the obligations so secured until such time as such obligations are no longer secured by a Lien. The preceding sentence shall not require the Issuer or any Restricted Subsidiary to secure the Notes if the Lien consists of a Permitted Lien. Any Lien that is granted to secure the Notes or such Note Guarantee under this Section 4.12 shall be automatically released and discharged at the same time as the release of the Lien that gave rise to the obligation to secure the Notes or such Note Guarantee under Section 4.12.

Section 4.13. Corporate Existence .

Subject to Article 5 hereof, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence and the corporate, partnership, limited liability company or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Issuer or any such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Issuer and its Restricted Subsidiaries; provided that the Issuer shall not be required to preserve any such right, license or franchise, or the corporate, partnership, limited liability company or other existence of any of its Restricted Subsidiaries, if the Issuer in good faith shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer and its Restricted Subsidiaries, taken as a whole.

Section 4.14. Offer to Repurchase Upon Change of Control .

(a) Upon a Change of Control, each Holder shall have the right to require the Issuer to repurchase all or any part of such Holder’s Notes at a purchase price in cash (the “ Change of Control Payment ”) equal to 101% of the principal amount thereof, plus accrued and unpaid interest and

 

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Additional Interest, if any, to the date of repurchase (subject to the right of the Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), in accordance with the terms contemplated in this Section 4.14; provided , however , that notwithstanding the occurrence of a Change of Control, the Issuer shall not be obligated to purchase any Notes pursuant to this Section 4.14 in the event that the Issuer has exercised its right to redeem such Notes in accordance with Section 3.07 of this Indenture. In the event that at the time of such Change of Control the terms of the Bank Indebtedness restrict or prohibit the repurchase of Notes pursuant to this Section 4.14, then prior to the mailing or transmission of the notice to the Holders provided for in Section 4.14(b) but in any event within 30 days following any Change of Control, the Issuer shall (i) repay in full all Bank Indebtedness or, if doing so will allow the purchase of Notes, offer to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each lender who has accepted such offer, or (ii) obtain the requisite consent under the agreements governing the Bank Indebtedness to permit the repurchase of the Notes as provided for in Section 4.14(b).

(b) Within 30 days following any Change of Control, except to the extent that the Issuer has exercised its right to redeem the Notes in accordance with Section 3.07 of this Indenture, the Issuer shall mail or electronically transmit a notice (a “ Change of Control Offer ”) to each Holder to the address of such Holder appearing in the Note Register with a copy to the Trustee, or otherwise in accordance with the procedures of DTC, with the following information:

(1) that a Change of Control has occurred and that such Holder has the right to require the Issuer to repurchase such Holder’s Notes at a repurchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase (subject to the right of Holders of record on a Record Date to receive interest on the relevant Interest Payment Date);

(2) the circumstances and relevant facts and financial information regarding such Change of Control;

(3) the repurchase price and the repurchase date, (which shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed or electronically transmitted) (the “ Change of Control Payment Date ”);

(4) that any Note not properly tendered will remain outstanding and continue to accrue interest;

(5) that unless the Issuer defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;

(6) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, to the Paying Agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(7) that Holders shall be entitled to withdraw their tendered Notes and their election to require the Issuer to purchase such Notes; provided that the Paying Agent receives, not later than the close of business on the 30th day following the date of the Change of Control notice, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder of the Notes,

 

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the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;

(8) that if the Issuer is redeeming less than all of the Notes, the Holders of the remaining Notes will be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered; the unpurchased portion of the Notes must be equal to $2,000 or an integral multiple of $1 in excess thereof; and

(9) the other instructions, as determined by the Issuer, consistent with this Section 4.14, that a Holder must follow in order to have its Notes purchased.

The notice, if mailed or electronically transmitted in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. If (a) the notice is mailed or electronically transmitted in a manner herein provided and (b) any Holder fails to receive such notice or a Holder receives such notice but it is defective, such Holder’s failure to receive such notice or such defect shall not affect the validity of the proceedings for the purchase of the Notes as to all other Holders that properly received such notice without defect. The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Indenture by virtue thereof.

(c) On the Change of Control Payment Date, the Issuer shall, to the extent permitted by law,

(1) accept for payment all Notes issued by it or portions thereof properly tendered pursuant to the Change of Control Offer;

(2) deposit with the Paying Agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered; and

(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Issuer.

(d) The Issuer shall not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.14 applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

(e) Notes repurchased by the Issuer pursuant to a Change of Control Offer will have the status of Notes issued but not outstanding or will be retired and canceled at the option of the Issuer. Notes purchased by a third party pursuant to the preceding clause (d) will have the status of Notes issued and outstanding.

 

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(f) Other than as specifically provided in this Section 4.14, any purchase pursuant to this Section 4.14 shall be made pursuant to the provisions of Sections 3.02, 3.05 and 3.06 hereof.

Section 4.15. Future Note Guarantors .

The Issuer shall cause each Restricted Subsidiary that is a Domestic Subsidiary (unless such Subsidiary is already a Note Guarantor, or is a Special Purpose Securitization Subsidiary, an Insurance Subsidiary, a Qualified CFC Holding Company or a Domestic Subsidiary that is Wholly Owned by one or more Foreign Subsidiaries and created to enhance the tax efficiency of the Issuer and its Subsidiaries) that:

(a) guarantees any Indebtedness of the Issuer or any of the Note Guarantors on the Issue Date or at any time thereafter, or

(b) Incurs any Indebtedness or issues any shares of Disqualified Stock permitted to be Incurred or issued pursuant to clause (1) of Section 4.09(b), to execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit D pursuant to which such Restricted Subsidiary will become a Note Guarantor. In addition, if requested by the Trustee, such Restricted Subsidiary shall deliver to the Trustee an Opinion of Counsel to the effect that:

(1) such Note Guarantee has been duly executed and authorized; and

(2) such Note Guarantee constitutes a valid, binding and enforceable obligation of such Restricted Subsidiary, except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without limitation, all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principles of equity.

Section 4.16. Limitation on Repayments of Existing Notes .

Notwithstanding anything to the contrary herein, the Issuer shall not, and shall not permit any of its Restricted Subsidiaries to make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case, any Existing Notes of the Issuer prior to April 15, 2012, in the case of the Existing Senior Notes, and April 15, 2013, in the case of the Existing Senior Subordinated Notes; provided that the repurchase, redemption or other acquisition or retirement for value of any Existing Notes pursuant to Sections 4.10 and 4.14 of each of the Existing Senior Note Indentures and the Existing Senior Subordinated Note Indenture shall be permitted, so long as a Change of Control Offer or Asset Sale Offer, as applicable, has been made and the Notes tendered by Holders in connection with a Change of Control or Asset Sale Offer, as applicable, have been repurchased in accordance with the terms of this Indenture.

Section 4.17. Suspension of Certain Covenants .

(a) Following the first day (the “Suspension Date”) that:

(1) the Notes have Investment Grade Ratings from both Rating Agencies, and the Issuer has delivered written notice of such Investment Grade Ratings to the Trustee, and

(2) no Default has occurred and is continuing under this Indenture,

then, beginning on that date, the Issuer and the Restricted Subsidiaries will not be subject to Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.14 and 4.15 and Section 5.01(a)(4) (collectively, the “ Suspended Covenants ”).

 

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(b) In the event that the Issuer and the Restricted Subsidiaries are not subject to the Suspended Covenants for any period of time as a result of the foregoing, and on any subsequent date (the “ Reversion Date ”) (1) one or both of the Rating Agencies withdraws their Investment Grade Rating or downgrades the rating assigned to the Notes below an Investment Grade Rating and/or (2) the Issuer or any of its Affiliates enters into an agreement to effect a transaction that would result in a Change of Control and one or more of the Rating Agencies indicate that if consummated, such transaction (alone or together with any related recapitalization or refinancing transactions) would cause such Rating Agency to withdraw its Investment Grade Rating or downgrade the ratings assigned to the Notes below an Investment Grade Rating, then the Issuer and the Restricted Subsidiaries shall thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events, including, without limitation, a proposed transaction described in clause (b)(2) above. The period of time between the Suspension Date and the Reversion Date is referred to herein as the “ Suspension Period .”

(c) Notwithstanding that the Suspended Covenants may be reinstated, no Default shall be deemed to have occurred as a result of a failure to comply with the Suspended Covenants during the Suspension Period. During any Suspension Period, the Issuer may not designate any Subsidiary as an Unrestricted Subsidiary unless the Issuer would have been permitted to designate such Subsidiary to be an Unrestricted Subsidiary if a Suspension Period had not been in effect for any period.

(d) On the Reversion Date, all Indebtedness Incurred during the Suspension Period shall be classified to have been Incurred pursuant to Section 4.09(a) or one of the clauses set forth in Section 4.09(b) (in each case, to the extent such Indebtedness would be permitted to be Incurred thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred prior to the Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness would not be so permitted to be Incurred pursuant to Section 4.09(a) or Section 4.09(b), such Indebtedness shall be deemed to have been outstanding on the Original Issue Date, so that it is classified as permitted under Section 4.09(b)(3). For purposes of Section 4.15, all Indebtedness Incurred during the Suspension Period and outstanding on the Reversion Date by any Restricted Subsidiary that is not a Note Guarantor will be deemed to have been Incurred on the Reversion Date. Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 4.07 shall be made as though Section 4.07 had been in effect since the Original Issue Date and throughout the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period shall reduce the amount available to be made as Restricted Payments under Section 4.07(a) and the items specified in clauses (1) through (6) of the definition of “Cumulative Credit” shall increase the amount available to be made as Restricted Payments under Section 4.07(a). For purposes of determining compliance with Section 4.10, on the Reversion Date, the Net Proceeds from all Asset Sales not applied in accordance with Section 4.10 shall be deemed to be reset to zero.

ARTICLE 5

SUCCESSORS

Section 5.01. Merger, Amalgamation Consolidation or Sale of All or Substantially All Assets .

(a) The Issuer shall not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up or convert into (whether or not the Issuer is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless:

 

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(1) the Issuer is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than the Issuer) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Issuer or such Person, as the case may be, being herein called the “ Successor Company ”); provided that in the case where the surviving Person is not a corporation, a co-obligor of the Notes is a corporation;

(2) the Successor Company (if other than the Issuer) expressly assumes all the obligations of the Issuer under this Indenture and the Notes pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(3) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Company or any of the Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing;

(4) immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period (and treating any Indebtedness that becomes an obligation of the Successor Company or any of the Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), either

(A) the Successor Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a), or

(B) the Fixed Charge Coverage Ratio for the Successor Company and the Restricted Subsidiaries would be greater than or equal to such ratio for the Issuer and the Restricted Subsidiaries immediately prior to such transaction;

(5) if the Successor Company is not the Issuer, each Note Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Note Guarantee shall apply to such Person’s obligations under this Indenture and the Notes; and

(6) the Successor Company (if other than the Issuer) shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation merger or transfer and such supplemental indentures (if any) comply with this Indenture.

Notwithstanding the foregoing clauses (3) and (4) of this Section 5.01(a), (a) subject to the restrictions on Note Guarantors described in Section 5.01(b), any Restricted Subsidiary may merge, consolidate or amalgamate with or transfer all or part of its properties and assets to the Issuer or to another Restricted Subsidiary, and (b) the Issuer may merge, consolidate or amalgamate with an Affiliate incorporated solely for the purpose of reincorporating the Issuer in another state of the United States, the District of Columbia or any territory of the United States or may convert into a limited liability company (provided that a co-obligor of the Notes is a corporation), so long as the amount of Indebtedness, Disqualified Stock and Preferred Stock of the Issuer and the Restricted Subsidiaries is not increased thereby (any transaction

 

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described in this sentence a “ Specified Merger/Transfer Transaction ”). This Section 5.01 will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among the Issuer and the Restricted Subsidiaries.

(b) Subject to the provisions of Section 10.06, each Note Guarantor will not, and the Issuer will not permit any Note Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Note Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(1) either (a) such Note Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Note Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Note Guarantor or such Person, as the case may be, being herein called the “ Successor Note Guarantor ”) and the Successor Note Guarantor (if other than such Note Guarantor) expressly assumes all the obligations of such Note Guarantor under this Indenture and such Note Guarantor’s applicable Note Guarantee pursuant to a supplemental indenture or other documents or instruments in form reasonably satisfactory to the Trustee, or (b) such sale or disposition or consolidation, amalgamation or merger is not in violation of Section 4.10;

(2) the Successor Note Guarantor (if other than such Note Guarantor) shall have delivered or caused to be delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with this Indenture; and

(3) immediately after such transaction, no Default or Event of Default exists.

Notwithstanding the foregoing, (1) a Note Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating such Note Guarantor in another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness, Preferred Stock and Disqualified Stock of the Note Guarantor is not increased thereby and (2) a Note Guarantor may merge, amalgamate or consolidate with another Note Guarantor or the Issuer.

In addition, notwithstanding the foregoing, any Note Guarantor may consolidate, amalgamate or merge with or into or wind up into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a “ Transfer ”) to (x) the Issuer or any Note Guarantor or (y) any Restricted Subsidiary that is not a Note Guarantor; provided that at the time of each such Transfer pursuant to clause (y) the aggregate amount of all such Transfers since the Original Issue Date shall not exceed the greater of $625.0 million and 5.0% of Total Assets after giving effect to each such Transfer and including all Transfers occurring from and after the Original Issue Date (excluding Transfers in connection with the Merger Transactions).

(c) For purposes of this Section 5.01, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Issuer, which properties and assets, if held by the Issuer instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Issuer on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Issuer.

 

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Section 5.02. Successor Entity Substituted .

Upon any consolidation, amalgamation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Issuer in accordance with Section 5.01(a), the Successor Company (if other than the Issuer) will succeed to, and be substituted for, the Issuer under this Indenture and the Notes, and in such event the Issuer will automatically be released and discharged from its obligations under this Indenture and the Notes, but in the case of a lease of all or substantially all of its assets, the Issuer will not be released from the obligations to pay the principal of, interest and Additional Interest, if any, on the Notes. Upon any consolidation, amalgamation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of a Note Guarantor in accordance with Section 5.01(b), the Successor Note Guarantor (if other than such Note Guarantor) will succeed to, and be substituted for, such Note Guarantor under this Indenture and such Note Guarantor’s applicable Note Guarantee, and such Note Guarantor will automatically be released and discharged from its obligations under this Indenture and such Note Guarantor’s applicable Note Guarantee, but in the case of a lease of all or substantially all of its assets, the Note Guarantor will not be released from its obligations under the Note Guarantee.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01. Events of Default .

An “ Event of Default ” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1) a default in any payment of interest (including any Additional Interest) on any Note when the same becomes due and payable, and such default continues for a period of 30 days,

(2) there is a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise,

(3) the Issuer or any of the Restricted Subsidiaries fails to comply with its obligations under Section 5.01,

(4) the Issuer or any of the Restricted Subsidiaries fails to comply with any of its agreements in the Notes or this Indenture (other than those referred to in clause (1), (2) or (3) of this Section 6.01(a)) and such failure continues for 60 days after the notice specified below,

(5) the Issuer or any Significant Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to the Issuer or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $100.0 million or its foreign currency equivalent,

(6) the Issuer, any Restricted Subsidiary that is a Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

 

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(i) commences proceedings to be adjudicated bankrupt or insolvent;

(ii) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under applicable Bankruptcy law;

(iii) consents to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;

(iv) makes a general assignment for the benefit of its creditors; or

(v) generally is not paying its debts as they become due;

(7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief against the Issuer or any Restricted Subsidiary that is a Significant Subsidiary, in a proceeding in which the Issuer, any such Restricted Subsidiary that is a Significant Subsidiary, is to be adjudicated bankrupt or insolvent;

(ii) appoints a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or any Restricted Subsidiary that is a Significant Subsidiary, or for all or substantially all of the property of the Issuer or any Restricted Subsidiary that is a Significant Subsidiary; or

(iii) orders the liquidation of the Issuer or any Restricted Subsidiary that is a Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days; or

(8) the Issuer or any Significant Subsidiary fails to pay final judgments aggregating in excess of $100.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days following the entry thereof, or

(9) any Note Guarantee of a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms thereof) or any Note Guarantor that qualifies as a Significant Subsidiary (or one or more Note Guarantors that, taken together as of the date of the most recent audited financial statements of the Issuer, would constitute a Significant Subsidiary) denies or disaffirms its obligations under this Indenture or any Note Guarantee and such Default continues for 10 days after the notice specified below.

A Default under clause (4) above shall not constitute an Event of Default until the Trustee notifies the Issuer or the Holders of at least 25% in principal amount of the outstanding Notes notify the Issuer and the Trustee of the Default and the Issuer does not cure such Default within the time specified in clause (4) above after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a “Notice of Default.”

The Issuer shall deliver to the Trustee, within thirty (30) days after the occurrence thereof, written notice in the form of an Officer’s Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

 

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Section 6.02. Acceleration .

(a) If an Event of Default (other than an Event of Default specified in clauses (6) or (7) of Section 6.01(a) with respect to the Issuer) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Notes, by notice to the Issuer may declare the principal of, premium, if any, and accrued but unpaid interest (including Additional Interest, if any) on all the Notes to be due and payable. Upon such a declaration, such principal and interest (including Additional Interest, if any) shall be due and payable immediately. If an Event of Default specified in clauses (6) or (7) of Section 6.01(a) with respect to the Issuer occurs, the principal of, premium, if any, and interest (including Additional Interest, if any) on all the Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

In the event of any Event of Default specified in clause (5) of Section 6.01(a), such Event of Default and all consequences thereof (excluding, however, any resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders of the Notes, if within 20 days after such Event of Default arose the Issuer delivers an Officer’s Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of the Notes as described above be annulled, waived or rescinded upon the happening of any such events.

(b) Subject to Section 6.02(a), at any time after a declaration of acceleration with respect to the Notes, the Holders of a majority in principal amount of Notes may rescind and cancel such declaration and its consequences:

(1) if the rescission would not conflict with any judgment or decree;

(2) if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration;

(3) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid; and

(4) if the Issuer has paid the Trustee its reasonable compensation and reimbursed the Trustee for its expenses, disbursements and advances.

No such rescission shall affect any subsequent Default or impair any right consequent thereto.

Section 6.03. Other Remedies .

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

 

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Section 6.04. Waiver of Past Defaults .

Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences hereunder, except a continuing Default in the payment of the principal of, premium, if any, Additional Interest, if any, or interest on, any Note held by a non-consenting Holder (including in connection with an Asset Sale Offer or a Change of Control Offer); provided , subject to Section 6.02 hereof, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

Section 6.05. Control by Majority .

Subject to Sections 7.01(e), 7.02(f), 7.02(k) and 7.07, Holders of a majority in principal amount of the then total outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or that would involve the Trustee in personal liability.

Section 6.06. Limitation on Suits .

Subject to Section 6.07 hereof, no Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:

(1) such Holder has previously given the Trustee notice that an Event of Default is continuing;

(2) Holders of at least 25% in principal amount of the total outstanding Notes have requested the Trustee to pursue the remedy;

(3) Holders of the Notes have offered the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(5) Holders of a majority in principal amount of the total outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

Section 6.07. Rights of Holders of Notes to Receive Payment .

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, and Additional Interest, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an Asset Sale Offer or a Change of Control Offer), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 

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Section 6.08. Collection Suit by Trustee .

If an Event of Default specified in Section 6.01(a)(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount of principal of, premium, if any, and Additional Interest, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.09. Restoration of Rights and Remedies .

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceedings, the Issuer, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding has been instituted.

Section 6.10. Rights and Remedies Cumulative .

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07 hereof, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 6.11. Delay or Omission Not Waiver .

No delay or omission of the Trustee or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

Section 6.12. Trustee May File Proofs of Claim .

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Notes including Holdings and the Note Guarantors), their creditors or their property and shall be entitled and empowered to participate as a member in any official committee of creditors appointed in such matter and to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any

 

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other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.13. Priorities .

If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:

(i) to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

(ii) to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, and Additional Interest, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and Additional Interest, if any, and interest, respectively; and

(iii) to the Issuer or to such party as a court of competent jurisdiction shall direct including Holdings or a Note Guarantor, if applicable.

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.13.

Section 6.14. Undertaking for Costs .

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.14 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

ARTICLE 7

TRUSTEE

Section 7.01. Duties of Trustee .

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of an Event of Default:

 

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(1) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

(2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved in a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and

(3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

(e) The Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of the Holders of the Notes unless the Holders have offered to the Trustee indemnity or security satisfactory to the Trustee against any loss, liability or expense.

(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

Section 7.02. Rights of Trustee .

(a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation. Any permissive right or authority granted to the Trustee shall not be construed as a mandatory duty.

 

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(b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both subject to the other provisions of this Indenture. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer shall be sufficient if signed by an Officer of the Issuer. The Trustee shall have no duty to inquire as to the performance of the Issuer’s, Holdings’ or any Note Guarantor’s covenants herein.

(f) None of the provisions of this Indenture shall require the Trustee to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.

(g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the existence of a Default or Event of Default, the Notes and this Indenture.

(h) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

(j) In the event the Issuer is required to pay Additional Interest, the Issuer will provide written notice to the Trustee of the Issuer’s obligation to pay Additional Interest no later than 15 days prior to the next Interest Payment Date, which notice shall set forth the amount of the Additional Interest to be paid by the Issuer. The Trustee shall not at any time be under any duty or responsibility to any Holders to determine whether the Additional Interest is payable and the amount thereof.

(k) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers or duties.

(l) The Trustee may request that the Issuer deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officer’s Certificate may be signed by any person authorized to sign an Officer’s

 

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Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.

(m) The permissive rights of the Trustee enumerated herein shall not be construed as duties.

Section 7.03. Individual Rights of Trustee .

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

Section 7.04. Trustee’s Disclaimer .

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuer’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

Section 7.05. Notice of Defaults .

If a Default occurs and is continuing and if it is actually known to a Trust Officer of the Trustee, the Trustee shall mail or electronically transmit to Holders of Notes a notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default relating to the payment of principal, premium, if any, or interest on any Note, the Trustee may withhold from the Holders notice of any continuing Default if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. The Trustee shall not be deemed to know of any Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee and references a Default or Event of Default.

Section 7.06. Reports by Trustee to Holders of the Notes .

Within 60 days after each December 31, beginning with the December 31 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c).

A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Issuer and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA Section 313(d). The Issuer shall promptly notify the Trustee when the Notes are listed on any stock exchange and of any delisting thereof.

 

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Section 7.07. Compensation and Indemnity .

The Issuer and the Note Guarantors, jointly and severally, shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as the parties shall agree in writing from time to time. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

The Issuer and the Note Guarantors, jointly and severally, shall indemnify the Trustee and any predecessor Trustee and their agents for, and hold the Trustee harmless against, any and all loss, damage, claims, liability or expense (including attorneys’ fees and including taxes (other than taxes based upon, measured by or determined by the income of the Trustee)) incurred by it in connection with the acceptance or administration of this trust and the performance of its duties hereunder (including the costs and expenses of enforcing this Indenture against the Issuer, Holdings or any of the Note Guarantors (including this Section 7.07) or defending itself against any claim whether asserted by any Holder, the Issuer, Holdings, any Note Guarantor or any other Person, or liability in connective with the acceptance, exercise or performance of any of its powers or duties hereunder). The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Trustee may have separate counsel and the Issuer shall pay the fees and expenses of such counsel. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee’s own willful misconduct, negligence or bad faith.

The obligations of the Issuer under this Section 7.07 shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee.

To secure the payment obligations of the Issuer and the Note Guarantors in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(a)(6) or (7) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

The Trustee shall comply with the provisions of TIA Section 313(b)(2) to the extent applicable.

Section 7.08. Replacement of Trustee .

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Holders of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuer in writing. The Issuer may remove the Trustee if:

(i) the Trustee fails to comply with Section 7.10 hereof;

 

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(ii) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

(iii) a custodian or public officer takes charge of the Trustee or its property; or

(iv) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the Issuer’s expense), the Issuer or the Holders of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

Section 7.09. Successor Trustee by Merger, etc .

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee.

Section 7.10. Eligibility; Disqualification .

There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.

This Indenture shall always have a Trustee who satisfies the requirements of TIA Sections 310(a)(1), (2) and (5). The Trustee is subject to TIA Section 310(b); provided , however , that there shall be excluded from the operation of TIA Section 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met.

Section 7.11. Preferential Collection of Claims Against the Issuer .

 

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The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein.

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance .

The Issuer may, at its option and at any time, elect to have either Section 8.02 or 8.03 hereof applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.

Section 8.02. Legal Defeasance and Discharge .

Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Issuer, Holdings and the Note Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes, the Holdings Guarantee and the Note Guarantees on the date the conditions set forth below are satisfied (“ Legal Defeasance ”). For this purpose, Legal Defeasance means that the Issuer shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all of its other obligations under such Notes and this Indenture including that of Holdings and the Note Guarantors (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:

(a) the rights of Holders of Notes to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due, solely out of the trust created pursuant to this Indenture referred to in Section 8.04 hereof;

(b) the Issuer’s obligations with respect to Notes concerning issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(c) the rights, powers, trusts, duties and immunities of the Trustee, and the Issuer’s obligations in connection therewith; and

(d) this Section 8.02.

Subject to compliance with this Article 8, the Issuer may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

Section 8.03. Covenant Defeasance .

Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Issuer and the Note Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants contained in Sections 3.09, 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 (solely with respect to Restricted Subsidiaries), 4.14, 4.15 and 4.16 hereof, and clause (4) of Section 5.01(a), hereof with respect to the outstanding Notes on

 

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and after the date the conditions set forth in Section 8.04 hereof are satisfied (“ Covenant Defeasance ”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(a)(3) (solely with respect to clause (4) of Section 5.01(a)), 6.01(a)(4), 6.01(a)(5), 6.01(a)(6) (solely with respect to Restricted Subsidiaries that are Significant Subsidiaries), 6.01(a)(7) (solely with respect to Restricted Subsidiaries that are Significant Subsidiaries), 6.01(a)(8) and 6.01(a)(9) hereof shall not constitute Events of Default.

Section 8.04. Conditions to Legal or Covenant Defeasance .

The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes:

In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes:

(1) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, U.S. dollar-denominated Government Obligations, or a combination thereof, in such amounts as shall be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest due on the Notes on the stated maturity date or on the date of redemption, as the case may be, of such principal, premium, if any, or interest on such Notes, and the Issuer must specify whether such Notes are being defeased to maturity or to a particular date of redemption;

(2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions,

(a) the Issuer has received from, or there has been published by, the United States Internal Revenue Service a ruling, or

(b) since the issuance of the Notes, there has been a change in the applicable U.S. federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes, as applicable, as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; provided, however , the Opinion of Counsel required with respect to a Legal Defeasance need not be delivered if all Notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one

 

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year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer;

(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to such tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under the Credit Agreement or any other material agreement or instrument (other than this Indenture) to which the Issuer or any Restricted Subsidiary is a party or by which the Issuer or any Restricted Subsidiary is bound (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith);

(6) the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that, as of the date of such opinion and subject to customary assumptions and exclusions following the deposit, the trust funds will not be subject to the effect of Section 547 of Title 11 of the United States Code;

(7) the Issuer shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Issuer with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuer, Holdings or any Note Guarantor or others; and

(8) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions), each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.

Section 8.05. Deposited Money and Government Obligations to Be Held in Trust; Other Miscellaneous Provisions .

Subject to Section 8.06 hereof, all money and Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “ Trustee ”) pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer, Holdings or a Note Guarantor acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and Additional Interest, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.

The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or Government Obligations deposited pursuant to Section 8.04

 

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hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon the request of the Issuer any money or Government Obligations held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 8.06. Repayment to the Issuer .

Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium and Additional Interest, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium and Additional Interest, if any, or interest has become due and payable shall be paid to the Issuer on its request or (if then held by the Issuer) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon cease.

Section 8.07. Reinstatement .

If the Trustee or Paying Agent is unable to apply any United States dollars or Government Obligations in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuer’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided that, if the Issuer makes any payment of principal of, premium and Additional Interest, if any, or interest on any Note following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01. Without Consent of Holders of Notes .

Notwithstanding Section 9.02 hereof, the Issuer, Holdings (with respect to the Holdings Guarantee or this Indenture), any Note Guarantor (with respect to its Note Guarantee or this Indenture) and the Trustee may amend or supplement this Indenture and the Notes, the Holdings Guarantee or any Note Guarantee without the consent of any Holder:

(1) to cure any ambiguity, omission, mistake, defect or inconsistency;

(2) to provide for uncertificated Notes in addition to or in place of certificated Notes; provided , however , that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code;

(3) to comply with Section 5.01 hereof;

 

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(4) to provide for the assumption of the Issuer’s, Holdings’ or any Note Guarantor’s obligations to the Holders;

(5) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under this Indenture of any such Holder;

(6) to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Issuer, Holdings or any Note Guarantor;

(7) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA;

(8) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee thereunder pursuant to the requirements thereof;

(9) to provide for the issuance of Exchange Notes or private exchange notes, which are identical to Exchange Notes except that they are not freely transferable, and for Additional Notes;

(10) to add a Note Guarantor under this Indenture;

(11) to secure the Notes, the Holdings Guarantee or any Note Guarantees;

(12) to conform the text of this Indenture, the Holdings Guarantee, Note Guarantees or the Notes to any provision of the “Description of the Extended Maturity Notes” section of the Offering Memorandum to the extent that such provision in such “Description of the Extended Maturity Notes” section was intended to be a verbatim recitation of a provision of this Indenture, Note Guarantee, the Holdings Guarantee or Notes;

(13) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including, without limitation to facilitate the issuance and administration of the Notes; provided, however , that (i) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of Holders to transfer Notes; or

(14) to make any change that does not adversely affect the rights of any Holder in any material respect.

Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Issuer, Holdings and the Note Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.

Section 9.02. With Consent of Holders of Notes .

Except as provided below in this Section 9.02, the Issuer, Holdings (with respect to the Holdings Guarantee or this Indenture), any Note Guarantor (with respect to its Note Guarantee or this

 

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Indenture) and the Trustee may amend or supplement this Indenture, any Note Guarantee, the Holdings Guarantee and the Notes with the consent of the Holders of at least a majority in principal amount of the Notes (including Additional Notes, if any) then outstanding voting as a single class (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and, subject to Sections 6.02 and 6.04 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium and Additional Interest, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Note Guarantees, the Holdings Guarantee or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) voting as a single class (including consents obtained in connection with the purchase of, or tender offer or exchange offer for, Notes). Sections 2.08 and 2.09 hereof shall determine which Notes are considered to be “outstanding” for the purposes of this Section 9.02.

Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Issuer, the Note Guarantors and Holdings in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer shall mail or electronically transmit to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to mail or electronically transmit such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

Without the consent of each affected Holder of Notes, an amendment or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):

(1) reduce the principal amount of such Notes whose Holders must consent to an amendment, supplement or waiver;

(2) reduce the principal of or change the Stated Maturity of any such Note, reduce the premium payable upon redemption or repurchase of any Note or change the time at which any Note may be redeemed under Section 3.07 hereof (other than the notice periods relating to an optional redemption of the Notes, so long as such notice periods comply with DTC’s procedures);

(3) reduce the rate of or change the time for payment of interest on any Note;

(4) waive a Default in the payment of principal of, premium, if any, or interest on the Notes, except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes with respect to a non payment default and a waiver of the payment default that resulted from such acceleration, or in respect of a covenant or provision contained in this Indenture or any Note Guarantee that cannot be amended or modified without the consent of all Holders;

 

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(5) make any Note payable in money other than that stated therein;

(6) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of, premium, if any, or interest on the Notes;

(7) make any change in these amendment and waiver provisions;

(8) impair the right of any Holder to receive payment of principal of, premium, if any, or interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes;

(9) expressly subordinate the Notes or any Note Guarantees to any other Indebtedness of the Issuer or any Note Guarantor; or

(10) except as expressly permitted by this Indenture, modify the Note Guarantees of any Significant Subsidiary or any group of Restricted Subsidiaries that, taken together as of the date of the amendment or waiver, would constitute a Significant Subsidiary in any manner adverse to the Holders of the Notes.

Section 9.03. Compliance with TIA .

Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies with the TIA as then in effect.

Section 9.04. Revocation and Effect of Consents .

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement, or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date unless the consent of the requisite number of Holders has been obtained.

Section 9.05. Notation on or Exchange of Notes .

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

 

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Section 9.06. Trustee to Sign Amendments, etc .

The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Issuer may not sign an amendment, supplement or waiver until its board of directors approves it. In executing any amendment, supplement or waiver, the Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 14.04 hereof, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer, Holdings and any Note Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03).

ARTICLE 10

NOTE GUARANTEES

Section 10.01. Note Guarantee .

Subject to this Article 10, each of the Note Guarantors hereby, jointly and severally irrevocably and unconditionally guarantees, on an unsecured senior basis, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that: (a) the principal of and interest, premium and Additional Interest, if any, on the Notes shall be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder whether for payment of principal of, premium, if any, or interest and Additional Interest, if any, on the Notes and all other monetary obligations of the Issuer under this Indenture and the Notes shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, each Note Guarantor, together with Holdings as described in Article 11, shall be jointly and severally with each other Note Guarantor and with Holdings, obligated to pay the same immediately. Each Note Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

The Note Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, the Holdings Guarantee, any Note Guarantee or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, Holdings or any Note Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Note Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.

 

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Each Note Guarantor also agrees to pay, in addition to the amount stated above, any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 10.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, Holdings, the Note Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer, Holdings or the Note Guarantors, any amount paid either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Each Note Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Note Guarantor further agrees that, as between the Note Guarantors and Holdings, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Note Guarantors for the purpose of this Note Guarantee. The Note Guarantors shall have the right to seek contribution from any non-paying Note Guarantor or Holdings so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantees.

Each Note Guarantee will be a continuing guarantee and shall:

(1) remain in full force and effect until payment in full of all the applicable guaranteed obligations;

(2) subject to the next succeeding paragraph, be binding upon each such Note Guarantor and its successors; and

(3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

Each Note Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer, Holdings or any Note Guarantor for liquidation or reorganization, should the Issuer, Holdings or any Note Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s, Holdings’ or any other Note Guarantor’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, the Holdings Guarantee or Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

In case any provision of any Note Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

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The Note Guarantee issued by any Note Guarantor shall be a general unsecured senior obligation of such Note Guarantor and shall be pari passu in right of payment with all existing and future Senior Pari Passu Indebtedness of such Note Guarantor, if any.

Each payment to be made by a Note Guarantor in respect of its Note Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

Section 10.02. Limitation on Note Guarantor Liability .

Each Note Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Note Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders, Holdings and the Note Guarantors hereby irrevocably agree that the obligations of each Note Guarantor shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Note Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Note Guarantor or Holdings in respect of the obligations of such other Note Guarantor or Holdings under this Article 10 or Holdings under Article 11, result in the obligations of such Note Guarantor under its Note Guarantee not being voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. Each Note Guarantor that makes a payment under its Note Guarantee shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each other Note Guarantor and Holdings in an amount equal to such other Note Guarantor’s or Holdings’ pro rata portion of such payment based on the respective net assets of all the Note Guarantors and Holdings at the time of such payment determined in accordance with GAAP.

Section 10.03. Execution and Delivery .

To evidence its Note Guarantee set forth in Section 10.01 hereof, each Note Guarantor hereby agrees that this Indenture shall be executed on behalf of such Note Guarantor by its Chairman, President, its Chief Financial Officer, its Treasurer, its Assistant Treasurer, one of its Vice Presidents or one of its Assistant Vice Presidents.

Each Note Guarantor hereby agrees that its Note Guarantee set forth in Section 10.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Note Guarantee on the Notes.

If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Note Guarantee shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Note Guarantors.

If required by Section 4.15 hereof, the Issuer shall cause any newly created or acquired Restricted Subsidiary to comply with the provisions of Section 4.15 hereof and this Article 10, to the extent applicable.

Section 10.04. Subrogation .

 

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Each Note Guarantor shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by such Note Guarantor pursuant to the provisions of Section 10.01 hereof; provided that, if an Event of Default has occurred and is continuing, no Note Guarantor shall be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.

Section 10.05. Benefits Acknowledged .

Each Note Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to its Note Guarantee are knowingly made in contemplation of such benefits.

Section 10.06. Release of Note Guarantees .

A Note Guarantee by a Note Guarantor shall be automatically and unconditionally released and discharged, and no further action by such Note Guarantor, the Issuer or the Trustee is required for the release of such Note Guarantor’s Note Guarantee, upon:

(1) (a) the sale, disposition or other transfer (including through merger or consolidation) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Note Guarantor is no longer a Restricted Subsidiary), of the applicable Note Guarantor if such sale, disposition or other transfer is made in compliance with the applicable provisions of this Indenture;

(b) the Issuer designating such Note Guarantor to be an Unrestricted Subsidiary in accordance with the provisions set forth under Section 4.07 and the definition of “Unrestricted Subsidiary”;

(c) the release or discharge of such Restricted Subsidiary from (x) its guarantee of Indebtedness under the Credit Agreement (including by reason of the termination of the Credit Agreement) and/or (y) the guarantee of Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer or such Restricted Subsidiary or the repayment of the Indebtedness or Disqualified Stock (except in each case a discharge or release by or as a result of payment under such guarantee) that resulted in the obligation to guarantee the Notes, in the case of each of clauses (x) and (y) if such Note Guarantor would not then otherwise be required to guarantee the Notes pursuant to this Indenture; provided, that if such Person has incurred any Indebtedness or issued any Disqualified Stock in reliance on its status as a Note Guarantor under Section 4.09, such Note Guarantor’s obligations under such Indebtedness or Disqualified Stock, as the case may be, so Incurred are satisfied in full and discharged or are otherwise permitted to be Incurred under Section 4.09; or

(d) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 hereof or the Issuer’s obligations under this Indenture being discharged in accordance with the terms of this Indenture; and

(2) in the case of clause (1)(a) above, the release of such Note Guarantor from its guarantee, if any, of, and all pledges and security, if any, granted in connection with, the Credit Agreement and any other Indebtedness of the Issuer or any Restricted Subsidiary.

In addition, a Note Guarantee will be automatically released upon the applicable Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest securing Bank Indebtedness or other exercise of remedies in respect thereof.

 

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Section 10.07. Securitization Acknowledgement .

(a) For purposes of this Section 10.07, capitalized terms used herein and not otherwise defined herein (unless there shall be a conflict between a term used in this Section 10.07(a) and a term used elsewhere in this Indenture, in which case the term as defined in this Section 10.07(a) shall control solely for purposes of this Section 10.07(a)) shall have the meanings assigned to such terms in the Transfer and Servicing Agreement, or, if not defined therein, as assigned to such terms in the Purchase Agreement or the Receivables Purchase Agreement referred to therein. Subsequent references in this Section 10.07(a) to Apple Ridge Services Corporation (“ ARSC ”), Cartus Corporation (“ Cartus ”) and Cartus Financial Corporation (“ CFC ”) below shall mean and be references to such corporations as they existed as of the Original Issue Date but shall also include references to any limited liability companies which succeed to the assets and liabilities of such companies in connection with a conversion of any such corporation into a limited liability company.

Holders by their acceptance of Notes entitled to the benefits of this Indenture acknowledge and agree, as follows (which acknowledgement and agreement are part of the consideration for the issuance of the Notes):

(i) Each Holder hereby acknowledges that (A) CFC is a limited purpose corporation whose primary activities are restricted in its certificate of incorporation to purchasing Cartus Purchased Assets (originally referred to as CMSC Purchased Assets) from Cartus pursuant to the Purchase Agreement, making Equity Payments, Equity Loans, Mortgage Payoffs and Mortgage Payments to or on behalf of employees or otherwise purchasing Homes in connection with the Pool Relocation Management Agreements, funding such activities through the sale of CFC Receivables (originally referred to as CMF Receivables) to ARSC, and such other activities as it deems necessary or appropriate in connection therewith, (B) ARSC is a limited purpose corporation whose primary activities are restricted in its certificate of incorporation to purchasing from CFC all CFC Receivables acquired by CFC from Cartus or otherwise originated by CFC, funding such acquisitions through the sale of the CFC Receivables to Apple Ridge Funding LLC (“ ARF ”) and such other activities as it deems necessary or appropriate to carry out such activities, and (C) ARF is a limited purpose limited liability company whose activities are limited in its limited liability company agreement to purchasing the Pool Receivables from ARSC, funding such acquisitions through the issuance of the Notes, pledging such Pool Receivables to The Bank of New York Mellon (formerly known as The Bank of New York) (the “ Indenture Trustee ”) and such other activities as it deems necessary or appropriate to carry out such activities.

(ii) Each Holder hereby acknowledges and agrees that (A) the foregoing transfers are intended to be true and absolute sales as a result of which Cartus has no right, title and interest in and to any of the Cartus Purchased Assets, any Homes acquired by CFC in connection therewith or any CFC Receivables, including any Related Property relating thereto, any proceeds thereof or earnings thereon (collectively, the “ Pool Assets ”), (B) none of CFC, ARSC or ARF is a Loan Party, (C) such Holder is not a creditor of, and has no recourse to, CFC, ARSC or ARF pursuant to the Credit Agreement or any other Loan Document, and (D) such Holder has no lien on or claim, contractual or otherwise, arising under the Credit Agreement or any other Loan Document to the Pool Assets (whether now existing or hereafter acquired and whether tangible or intangible); provided that nothing herein shall limit any rights the Secured Parties may have to any proceeds or earnings which are transferred from time to time to Cartus by CFC, ARSC or ARF.

(iii) No Holder will institute against or join any other person in instituting against CFC, ARSC or ARF any insolvency proceeding, or solicit, join in soliciting, cooperate with or

 

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encourage any motion in support of, any insolvency proceeding involving CFC, ARSC or ARF until one year and one day after the payment in full of all Notes; provided that the foregoing shall not limit the right of any Holder to file any claim in or otherwise take any action (not inconsistent with the provisions of this Section 10.07(a)) permitted or required by applicable law with respect to any insolvency proceeding instituted against CFC, ARSC or ARF by any other person.

(iv) Without limiting the foregoing, in the event of any voluntary or involuntary bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any Federal or state bankruptcy or similar law involving Cartus, CFC, ARSC, ARF or any other Affiliates of Cartus as debtor, or otherwise, the Secured Parties agree that if, notwithstanding the intent of the parties, Cartus is found to have a property interest in the Pool Assets, then, in such event, CFC and its assigns, including the Indenture Trustee, shall have a first and prior claim to the Pool Assets, and any claim or rights the Secured Parties may have to the Pool Assets, contractual or otherwise, shall be subject to the prior claims of the Indenture Trustee and the Noteholders until all amounts owing under the Indenture shall have been paid in full, and the Secured Parties agree to turn over to the Indenture Trustee any amounts received contrary to the provisions of this clause (iv).

(v) Each Holder hereby covenants and agrees that it will not agree to any amendment, supplement or other modification of this Section 10.07(a) without the prior written consent of the Indenture Trustee. Each Holder further agrees that the provisions of this Section 10.07(a) are made for the benefit of, and may be relied upon and enforced by, the Indenture Trustee and that the Indenture Trustee shall be a third party beneficiary of this Section 10.07(a).

ARTICLE 11

HOLDINGS GUARANTEE

Section 11.01. Holdings Guarantee .

Subject to this Article 11, Holdings hereby, jointly and severally with the Note Guarantors, irrevocably and unconditionally guarantees, on an unsecured senior subordinated basis, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that: (a) the principal of and interest, premium and Additional Interest, if any, on the Notes shall be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder whether for payment of principal of, premium, if any, or interest or Additional Interest, if any, on the Notes and all other monetary obligations of the Issuer under this Indenture and the Notes shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, Holdings, together with the Note Guarantors as described in Article 10, shall be jointly and severally obligated to pay the same immediately. Holdings agrees that this is a guarantee of payment and not a guarantee of collection.

Holdings hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, this Indenture or any Note Guarantee, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any

 

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provisions hereof or thereof, the recovery of any judgment against the Issuer, Holdings or any Note Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Holdings hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Holdings Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.

Holdings also agrees to pay, in addition to the amount stated above, any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 11.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, Holdings, the Note Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer, Holdings or the Note Guarantors, any amount paid either to the Trustee or such Holder, this Holdings Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Holdings agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Holdings further agrees that, as between Holdings and the Note Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Holdings Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by Holdings for the purpose of this Holdings Guarantee. Holdings shall have the right to seek contribution from any non-paying Note Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantees.

This Holdings Guarantee will be a continuing guarantee and shall:

(1) remain in full force and effect until payment in full of all the applicable guaranteed obligations;

(2) subject to the next succeeding paragraph, be binding upon Holdings and its successors; and

(3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

This Holdings Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer, Holdings or any Note Guarantor for liquidation or reorganization, should the Issuer, Holdings or any Note Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s, Holdings’ or any Note Guarantor’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, the Holdings Guarantee or Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be

 

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reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

In case any provision of this Holdings Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

This Holdings Guarantee shall be a general unsecured senior subordinated obligation of Holdings and shall be subordinated in right of payment to all existing and future Holdings Senior Indebtedness, if any.

Each payment to be made by Holdings in respect of its Holdings Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

Section 11.02. Limitation on Holdings Liability .

Holdings, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Holdings Guarantee of Holdings not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to this Holdings Guarantee. To effectuate the foregoing intention, the Trustee, the Holders, the Note Guarantors and Holdings hereby irrevocably agree that the obligations of Holdings shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of Holdings that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of Holdings or any of the Note Guarantors in respect of the obligations of Holdings under this Article 11 or the Note Guarantors under Article 10, result in the obligations of Holdings under this Holdings Guarantee not being voidable under applicable law relating to a fraudulent conveyance or fraudulent transfer or similar law affecting the rights of creditors generally. If Holdings makes a payment under this Holdings Guarantee, then Holdings shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each Note Guarantor in an amount equal to such Note Guarantor’s pro rata portion of such payment based on the respective net assets of Holdings and each of the Note Guarantors at the time of such payment determined in accordance with GAAP.

Section 11.03. Execution and Delivery .

To evidence the Holdings Guarantee set forth in Section 11.01 hereof, Holdings hereby agrees that this Indenture shall be executed on behalf of Holdings by its Chairman, President, its Chief Financial Officer, its Treasurer, its Assistant Treasurer, one of its Vice Presidents or one of its Assistant Vice Presidents.

Holdings hereby agrees that the Holdings Guarantee set forth in Section 11.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Holdings Guarantee on the Notes.

If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Holdings Guarantee shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Holdings Guarantee set forth in this Indenture on behalf of Holdings.

Section 11.04. Subrogation .

 

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Holdings shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by Holdings pursuant to the provisions of Section 11.01 hereof; provided that, if an Event of Default has occurred and is continuing, Holdings shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.

Section 11.05. Benefits Acknowledged .

Holdings acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to this Holdings Guarantee are knowingly made in contemplation of such benefits.

Section 11.06. Release of Holdings Guarantee .

This Holdings Guarantee shall be automatically and unconditionally released and discharged, and no further action by Holdings, the Issuer, the Note Guarantors or the Trustee is required for the release of this Holdings Guarantee, upon:

(a) the Issuer ceasing to be a Subsidiary of Holdings; provided that any such transaction occurs in compliance with the provisions of this Indenture; or

(b) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 hereof or the Issuer’s obligations under this Indenture being discharged in accordance with the terms of this Indenture.

ARTICLE 12

SUBORDINATION OF HOLDINGS GUARANTEE

Section 12.01. Agreement To Subordinate .

Holdings agrees, and each Holder by accepting a Note agrees, that the obligations of Holdings under its Holdings Guarantee are subordinated in all respects, including right of payment, to the extent and in the manner provided in this Article 12, to the prior payment in full of all future Holdings Senior Indebtedness and that the subordination is for the benefit of and enforceable by the holders of such Holdings Senior Indebtedness. Holdings’ obligations under its Holdings Guarantee shall in all respects rank pari passu in right of payment with all existing and future Holdings Pari Passu Indebtedness and will be senior in right of payment to all existing and future Holdings Subordinated Indebtedness; and only Indebtedness of Holdings that is Holdings Senior Indebtedness shall rank senior to the obligations of Holdings under its Holdings Guarantee in accordance with the provisions set forth herein. All provisions of this Article 12 shall be subject to Section 12.12.

Section 12.02. Liquidation, Dissolution, Bankruptcy .

Upon any payment or distribution of the assets of Holdings to creditors upon a total or partial liquidation or a total or partial dissolution of Holdings or in a reorganization of or similar proceeding relating to Holdings or its property:

(1) the holders of Holdings Senior Indebtedness shall be entitled to receive payment in full in cash of such Holdings Senior Indebtedness (including interest accruing after, or which would accrue but for, the commencement of any such proceeding at the rate specified in the applicable Holdings

 

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Senior Indebtedness, whether or not a claim for such interest would be allowed) before Holders of the Notes shall be entitled to receive any payment; and

(2) until the Holdings Senior Indebtedness is paid in full in cash, any payment or distribution to which Holders of the Notes would be entitled but for the subordination provisions of this Article 12 shall be made to holders of such Holdings Senior Indebtedness as their interests may appear, except that Holders of the Notes may receive and retain (x) so long as the Holders are not in the same or a higher class of creditors in such liquidation, dissolution or proceeding as the holders of the Holdings Senior Indebtedness, shares of stock and any debt securities that are subordinated to Holdings Senior Indebtedness to at least the same extent as the Holdings Guarantee (such stock and debt securities referred to herein as “ Holdings Permitted Junior Securities ”) and (y) payments or deposits made pursuant to Article 8 or Article 13 so long as, on the date or dates the respective amounts were paid into the trust, such payments were made with respect to the Notes without violating the subordination provisions described herein; and

(3) if a distribution is made to Holders of the Notes that, due to the subordination provisions, should not have been made to them, such Holders of the Notes are required to hold it in trust for the holders of Holdings Senior Indebtedness and pay it over to them as their interests may appear.

Section 12.03. Default on Holdings Senior Indebtedness .

Holdings shall not make any payment pursuant to its Holdings Guarantee (or pay any other Obligations relating to its Holdings Guarantee, including Additional Interest, fees, costs, expenses, indemnities and rescission or damage claims) and may not purchase, redeem or otherwise retire any Notes (collectively, “ pay its Holdings Guarantee ”) (except that Holders of the Notes may receive and retain (x) Holdings Permitted Junior Securities and (y) payments or deposits made pursuant to Article 8 or Article 13), if either of the following occurs (a “ Holdings Payment Default ”):

(1) a default in the payment of the principal of, premium, if any, or interest on any Holdings Senior Indebtedness occurs and is continuing or any other amount owing in respect of any Holdings Senior Indebtedness is not paid when due, or

(2) any other default on Holdings Senior Indebtedness occurs and the maturity of such Holdings Senior Indebtedness is accelerated in accordance with its terms,

unless, in either case, the Holdings Payment Default has been cured or waived and any such acceleration has been rescinded or such Holdings Senior Indebtedness has been paid in full in cash; provided , however , that Holdings shall be entitled to pay its Holdings Guarantee without regard to the foregoing if Holdings and the Trustee receive written notice approving such payment from the Holdings Representatives of all Holdings Senior Indebtedness with respect to which the Holdings Payment Default has occurred and is continuing.

During the continuance of any default (other than a Holdings Payment Default) (a “ Holdings Non-Payment Default ”) with respect to any Holdings Senior Indebtedness pursuant to which the maturity thereof may be accelerated without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, Holdings shall not pay its Holdings Guarantee (except in the form of Holdings Permitted Junior Securities) for a period (a “ Holdings Guarantee Payment Blockage Period ”) commencing upon the receipt by the Trustee (with a copy to Holdings and the Issuer) of written notice (a “ Holdings Guarantee Blockage Notice ”) of such Holdings Non-Payment Default from the Holdings Representative of such Holdings Senior Indebtedness specifying an election to effect a Holdings Guarantee Payment Blockage Period and ending 179 days thereafter unless earlier terminated as provided below. The Holdings Guarantee Payment Blockage

 

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Period shall end earlier if such Holdings Guarantee Payment Blockage Period is terminated (i) by written notice to the Trustee, Holdings and the Issuer from the Person or Persons who gave such Holdings Guarantee Blockage Notice; (ii) because the default giving rise to such Holdings Guarantee Blockage Notice is cured, waived or otherwise no longer continuing; or (iii) because such Holdings Senior Indebtedness has been repaid in full in cash.

Notwithstanding the provisions described in the immediately preceding paragraph (but subject to the provisions contained in the first paragraph of this Section 12.03 and Section 12.02 hereof), unless the holders of such Holdings Senior Indebtedness or the Holdings Representative of such Holdings Senior Indebtedness shall have accelerated the maturity of such Holdings Senior Indebtedness or a Holdings Payment Default exists, Holdings shall be permitted to resume paying its Holdings Guarantee after the end of such Holdings Guarantee Payment Blockage Period. Holdings shall not be subject to more than one Holdings Guarantee Payment Blockage Period in any consecutive 360-day period, irrespective of the number of defaults with respect to Holdings Senior Indebtedness during such period. However, in no event shall the total number of days during which any Holdings Guarantee Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate during any consecutive 360-day period. Notwithstanding the foregoing, however, no default that existed or was continuing on the date of delivery of any Holdings Guarantee Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Holdings Guarantee Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenants during the period after the date of delivery of a Holdings Guarantee Blockage Notice, that, in either case, would give rise to a Holdings Non-Payment Default pursuant to any provisions of the Holdings Senior Indebtedness under which a Holdings Non-Payment Default previously existed or was continuing shall constitute a new Holdings Non-Payment Default for this purpose).

Section 12.04. Demand for Payment .

If payment of the Notes is accelerated because of an Event of Default and a demand for payment is made on Holdings pursuant to Article 11 hereof, the Issuer, the Trustee or Holdings shall promptly notify the holders of the Holdings Senior Indebtedness or the Holdings Representative of such Holdings Senior Indebtedness of such demand; provided that any failure to give such notice shall have no effect whatsoever on the provisions of this Article 12. If any Holdings Senior Indebtedness is outstanding, Holdings may not pay its Holdings Guarantee until five Business Days after the Holdings Representatives of all such Holdings Senior Indebtedness receive notice of such acceleration and, thereafter, may pay its Holdings Guarantee only if this Indenture otherwise permits payment at that time.

Section 12.05. When Distribution Must Be Paid Over .

If a distribution is made to Holders that, due to the subordination provisions, should not have been made to them, such Holders are required to hold it in trust for the holders of Holdings Senior Indebtedness and pay it over to them as their interests may appear.

Section 12.06. Subrogation .

After all Holdings Senior Indebtedness is paid in full and until the Notes are paid in full, Holders shall be subrogated to the rights of holders of such Holdings Senior Indebtedness to receive distributions applicable to such Holdings Senior Indebtedness. A distribution made under this Article 12 to holders of such Holdings Senior Indebtedness which otherwise would have been made to Holders is not, as between Holdings and Holders, a payment by Holdings on such Holdings Senior Indebtedness.

Section 12.07. Relative Rights .

 

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This Article 12 defines the relative rights of Holders and holders of Holdings Senior Indebtedness. Nothing in this Indenture shall:

(1) impair, as between Holdings and Holders, the obligation of Holdings, which is absolute and unconditional, to make payments under its Holdings Guarantee in accordance with its terms;

(2) prevent the Trustee or any Holder from exercising its available remedies upon a default by Holdings under its obligations with respect to its Holdings Guarantee, subject to the rights of holders of Holdings Senior Indebtedness to receive payments or distributions otherwise payable to Holders and such other rights of such holders of Holdings Senior Indebtedness as set forth herein; or

(3) affect the relative rights of Holders and creditors of Holdings other than their rights in relation to holders of Holdings Senior Indebtedness.

Section 12.08. Subordination May Not Be Impaired by Holdings .

No right of any holder of Holdings Senior Indebtedness to enforce the subordination of the obligations of Holdings under its Holdings Guarantee shall be impaired by any act or failure to act by Holdings or by its failure to comply with this Indenture.

Section 12.09. Rights of Trustee and Paying Agent .

Notwithstanding Section 12.03 hereof, the Trustee or any Paying Agent may continue to make payments on the Notes and shall not be charged with knowledge of the existence of facts that would prohibit the making of any payments unless, not less than three Business Days prior to the date of such payment, a Trust Officer at the Corporate Trust Office of the Trustee receives notice satisfactory to him that payments may not be made under this Article 12; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 7.01, shall be entitled in all respects to assume that no such facts exist; provided , however , that if a Trust Officer of the Trustee shall not have received, at least three Business Days prior to the date upon which by the terms hereof any such money may become payable for any purpose (including, without limitation, the payment of principal, premium, if any, interest, Additional Interest, the redemption price or the Change of Control Payment, as the case may be, in respect of any Note), the notice with respect to such money provided for in this Section 12.09 then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within three Business Days prior to such date. Holdings, a Holdings Representative, a holder of Holdings Senior Indebtedness or any trustee of or agent thereof shall be entitled to give the notice; provided , however , that, if an issue of Holdings Senior Indebtedness has a Holdings Representative, only the Holdings Representative shall be entitled to give the notice.

The Trustee in its individual or any other capacity shall be entitled to hold Holdings Senior Indebtedness with the same rights it would have if it were not Trustee. The Registrar and the Paying Agent shall be entitled to do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article 12 with respect to any Holdings Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of such Holdings Senior Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing in this Article 12 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof or any other Section of this Indenture.

 

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Section 12.10. Distribution or Notice to Holdings Representative .

Whenever a distribution is to be made or a notice given to holders of Holdings Senior Indebtedness the distribution may be made and the notice given to their Holdings Representative (if any).

Section 12.11. Article 12 Not To Prevent Events of Default or Limit Right To Demand Payment .

The failure of Holdings to make a payment pursuant to the Holdings Guarantee by reason of any provision in this Article 12 shall not be construed as preventing a Default. Nothing in this Article 12 shall have any effect on the right of the Holders or the Trustee to accelerate the maturity of the Notes.

Section 12.12. Trust Moneys Not Subordinated .

Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of Government Obligations held in trust by the Trustee for the payment of principal of and interest on the Notes pursuant to Article 8 or Article 13 hereof shall not be subordinated to the prior payment of any Holdings Senior Indebtedness or subject to the restrictions set forth in this Article 12, and none of the Holders shall be obligated to pay over any such amount to Holdings or any holder of Holdings Senior Indebtedness or any other creditor of Holdings, provided that the subordination provisions of this Article 12 were not violated at the time the applicable amounts were deposited in trust pursuant to Article 8 or Article 13 hereof, as the case may be.

Section 12.13. Trustee Entitled To Rely .

Upon any payment or distribution pursuant to this Article 12, the Trustee and the Holders shall be entitled to conclusively rely (a) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 12.02 hereof are pending, (b) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (c) upon the Holdings Representatives of Holdings Senior Indebtedness for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of such Holdings Senior Indebtedness and other Indebtedness of Holdings, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 12. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Holdings Senior Indebtedness to participate in any payment or distribution pursuant to this Article 12, the Trustee shall be entitled to request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Holdings Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article 12, and, if such evidence is not furnished, the Trustee shall be entitled to defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 hereof shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article 12.

Section 12.14. Trustee To Effectuate Subordination .

A Holder by its acceptance of a Note agrees to be bound by this Article 12 and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be necessary or appropriate to effectuate the subordination between the Holders and the holders of Holdings Senior Indebtedness as provided in this Article 12 and appoints the Trustee as attorney-in-fact for any and all such purposes.

 

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Section 12.15. Trustee Not Fiduciary for Holders of Holdings Senior Indebtedness .

The Trustee shall not be deemed to owe any fiduciary duty to the holders of Holdings Senior Indebtedness and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders or Holdings or any other Person, money or assets to which any holders of Holdings Senior Indebtedness shall be entitled by virtue of this Article 12 or otherwise.

Section 12.16. Reliance by Holders of Holdings Senior Indebtedness on Subordination Provisions .

Each Holder by accepting a Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Holdings Senior Indebtedness whether such Holdings Senior Indebtedness was created or acquired before or after the issuance of the Notes, to acquire and continue to hold, or to continue to hold, such Holdings Senior Indebtedness and such holder of such Holdings Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Holdings Senior Indebtedness.

Without in any way limiting the generality of the foregoing paragraph, the holders of Holdings Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Trustee or the Holders and without impairing or releasing the subordination provided in this Article 12 or the obligations hereunder of the Holders to the holders of the Holdings Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Holdings Senior Indebtedness, or otherwise amend or supplement in any manner Holdings Senior Indebtedness, or any instrument evidencing the same or any agreement under which Holdings Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Holdings Senior Indebtedness; (iii) release any Person liable in any manner for the payment or collection of Holdings Senior Indebtedness; and (iv) exercise or refrain from exercising any rights against Holdings and any other Person.

ARTICLE 13

SATISFACTION AND DISCHARGE

Section 13.01. Satisfaction and Discharge .

(a) This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights of transfer or exchange of Notes, as expressly provided for in this Indenture) as to all outstanding Notes when either: (i) all Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust) have been delivered to the Trustee for cancellation; or (ii) all Notes (a) have become due and payable, (b) will become due and payable at their Stated Maturity within one year or (c) if redeemable at the option of the Issuer, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer has irrevocably deposited or caused to be deposited with the Trustee, as trust funds in trust solely for the benefit of the Holders of the Notes, cash in U.S. dollars, U.S. dollar Government Obligations, or a combination thereof, in such amounts as will be sufficient in the written opinion of a firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Dollar-denominated Government Obligations have been so deposited) without

 

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consideration of any reinvestment of interest to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal of, premium, if any, and accrued interest on the Notes to the date of deposit together with irrevocable instructions from the Issuer directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

(b) the Issuer, Holdings and/or the Note Guarantors have paid or caused to be paid all other sums payable under this Indenture; and

(c) the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, if money shall have been deposited with the Trustee pursuant to sub-clause (ii) of clause (a) of this Section 13.01, the provisions of Section 13.02 and Section 8.06 shall survive.

Section 13.02. Application of Trust Money .

Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 13.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium and Additional Interest, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

If the Trustee or Paying Agent is unable to apply any money or Government Obligations in accordance with Section 13.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer’s, Holdings’ and any Note Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 13.01 hereof; provided that if the Issuer has made any payment of principal of, premium and Additional Interest, if any, or interest on any Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Obligations held by the Trustee or Paying Agent.

ARTICLE 14

MISCELLANEOUS

Section 14.01. TIA Controls .

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA Section 318(c), the imposed duties shall control.

Section 14.02. Notices .

Any notice or communication by the Issuer, Holdings, any Note Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), fax or overnight air courier guaranteeing next day delivery, to the others’ addresses:

 

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If to the Issuer and/or Holdings and/or any Note Guarantor:

c/o Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

If to the Trustee:

The Bank of New York Mellon Trust Company, N.A.

525 William Penn Place, 38 th Floor

Pittsburgh, Pennsylvania 15259

Fax No.: (412) 234-7535

Attention: Corporate Trust Administration

The Issuer, Holdings, any Note Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five calendar days after being deposited in the mail, postage prepaid, if mailed by first-class mail; when receipt acknowledged, if faxed; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery; provided that any notice or communication delivered to the Trustee shall be deemed effective upon actual receipt thereof.

Any notice or communication to a Holder shall be mailed by first-class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar or by other electronic means or such other delivery system as the Trustee agrees to accept. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

If the Issuer mails a notice or communication to Holders, they shall mail a copy to the Trustee and each Agent at the same time.

The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods. If the party elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

 

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Notwithstanding anything to the contrary contained herein, as long as the Notes are in the form of a Global Note, notice to the Holders may be made electronically in accordance with procedures of the Depositary.

Section 14.03. Communication by Holders of Notes with Other Holders of Notes.

Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).

Section 14.04. Certificate and Opinion as to Conditions Precedent.

Upon any request or application by the Issuer, Holdings or any of the Note Guarantors to the Trustee to take any action under this Indenture, the Issuer, Holdings or such Note Guarantor, as the case may be, shall furnish to the Trustee:

(i) An Officer’s Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 14.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(ii) An Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 14.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

Section 14.05. Statements Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to Section 4.04 hereof or TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include:

(i) a statement that the Person making such certificate or opinion has read such covenant or condition;

(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(iii) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may be limited to reliance on an Officer’s Certificate as to matters of fact); and

(iv) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

Section 14.06. Rules by Trustee and Agents.

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

 

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Section 14.07. No Personal Liability of Directors, Officers, Employees and Stockholders.

No director, officer, employee, manager, incorporator or holder of any Equity Interest of the Issuer, Holdings or any Note Guarantor or any direct or indirect parent corporation, as such, shall have any liability for any obligations of the Issuer, Holdings or the Note Guarantors under the Notes, the Holdings Guarantee, the Note Guarantees or this Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

Section 14.08. Governing Law.

THIS INDENTURE, THE NOTES, THE HOLDINGS GUARANTEE AND ANY NOTE GUARANTEE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 14.09. Waiver of Jury Trial.

EACH OF THE ISSUER, HOLDINGS, THE NOTE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES, THE HOLDINGS GUARANTEE, THE NOTE GUARANTEES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 14.10. Force Majeure.

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused by, directly or indirectly, forces beyond its reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services.

Section 14.11. No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuer or its Restricted Subsidiaries, Holdings or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 14.12. Successors.

All agreements of the Issuer in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of Holdings and each Note Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 10.06 and Section 11.06 hereof.

Section 14.13. Severability.

In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

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Section 14.14. Counterpart Originals.

The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

Section 14.15. Table of Contents, Headings, etc.

The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

Section 14.16. Qualification of Indenture.

The Issuer, Holdings and the Note Guarantors shall qualify this Indenture under the TIA in accordance with the terms and conditions of the Registration Rights Agreement and shall pay all reasonable costs and expenses (including attorneys’ fees and expenses for the Issuer, Holdings, the Note Guarantors and the Trustee) incurred in connection therewith, including, but not limited to, costs and expenses of qualification of this Indenture and the Notes and printing this Indenture and the Notes. The Trustee shall be entitled to receive from the Issuer, Holdings and the Note Guarantors any such Officer’s Certificates, Opinions of Counsel or other documentation as it may reasonably request in connection with any such qualification of this Indenture under the TIA.

Section 14.17. Designated Senior Indebtedness.

For purposes of the Existing Senior Subordinated Note Indenture, the obligations of the Issuer and the Note Guarantors under the Notes and this Indenture and the New 11.50% Senior Notes and the New 11.50% Senior Notes Indenture shall be Designated Senior Indebtedness (as defined in the Existing Senior Subordinated Note Indenture) for all purposes under the Existing Senior Subordinated Note Indenture.

[ Signatures on following page ]

 

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

 

  REALOGY CORPORATION
By  
  /s/ Anthony E. Hull
  Name: Anthony E. Hull
  Title: Chief Financial Officer
  DOMUS HOLDINGS CORP.
By:  
  /s/ Anthony E. Hull
  Name: Anthony E. Hull
  Title: Chief Financial Officer

[12.00% Senior Notes Indenture]


CARTUS CORPORATION

CDRE TM LLC

NRT INSURANCE AGENCY, INC.

REALOGY OPERATIONS LLC

REALOGY SERVICES GROUP LLC

REALOGY SERVICES VENTURE PARTNER LLC

SOTHEBY’S INTERNATIONAL REALTY

LICENSEE LLC

WREM, INC.

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Chief Financial Officer

[12.00% Senior Notes Indenture]


ASSOCIATES REALTY, INC.

CARTUS ASSET RECOVERY CORPORATION

CARTUS PARTNER CORPORATION

FEDSTATE STRATEGIC CONSULTING, INCORPORATED

J.W. RIKER-NORTHERN R.I., INC.

LAKECREST TITLE, LLC

NRT PHILADELPHIA LLC

REFERRAL NETWORK LLC

THE CORCORAN GROUP EAST SIDE, INC.

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Executive Vice President & Treasurer

[12.00% Senior Notes Indenture]


AMERICAN TITLE COMPANY OF HOUSTON

ATCOH HOLDING COMPANY

BURNET TITLE LLC

BURNET TITLE HOLDING LLC

BURROW ESCROW SERVICES, INC.

CORNERSTONE TITLE COMPANY

EQUITY TITLE COMPANY

EQUITY TITLE MESSENGER SERVICE HOLDING LLC

FIRST CALIFORNIA ESCROW CORPORATION

FRANCHISE SETTLEMENT SERVICES LLC

GUARDIAN HOLDING COMPANY

GUARDIAN TITLE AGENCY, LLC

GUARDIAN TITLE COMPANY

GULF SOUTH SETTLEMENT SERVICES, LLC

KEYSTONE CLOSING SERVICES LLC

MARKET STREET SETTLEMENT GROUP LLC

MID-ATLANTIC SETTLEMENT SERVICES LLC

NATIONAL COORDINATION ALLIANCE LLC

NRT SETTLEMENT SERVICES OF MISSOURI LLC

NRT SETTLEMENT SERVICES OF TEXAS LLC

PROCESSING SOLUTIONS LLC

SECURED LAND TRANSFERS LLC

ST. JOE TITLE SERVICES LLC

TAW HOLDING INC.

TEXAS AMERICAN TITLE COMPANY

TITLE RESOURCE GROUP AFFILIATES HOLDINGS LLC

TITLE RESOURCE GROUP HOLDINGS LLC

TITLE RESOURCE GROUP LLC

TITLE RESOURCE GROUP SERVICES LLC

TITLE RESOURCES INCORPORATED

TRG SERVICES, ESCROW, INC.

TRG SETTLEMENT SERVICES, LLP

WAYDAN TITLE, INC.

WEST COAST ESCROW COMPANY

By:   /s/ Thomas N. Rispoli
Name:   Thomas N. Rispoli
Title:   Chief Financial Officer

[12.00% Senior Notes Indenture]


BETTER HOMES AND GARDENS REAL ESTATE LLC

BETTER HOMES AND GARDENS REAL ESTATE LICENSEE LLC

CENTURY 21 REAL ESTATE LLC

CGRN, INC.

COLDWELL BANKER LLC

COLDWELL BANKER REAL ESTATE LLC

ERA FRANCHISE SYSTEMS LLC

GLOBAL CLIENT SOLUTIONS LLC

ONCOR INTERNATIONAL LLC

REALOGY FRANCHISE GROUP LLC

REALOGY GLOBAL SERVICES LLC

REALOGY LICENSING LLC

SOTHEBY’S INTERNATIONAL REALTY AFFILIATES LLC

WORLD REAL ESTATE MARKETING LLC

By:   /s/ Andrew G. Napurano
Name:   Andrew G. Napurano
Title:   Chief Financial Officer

[12.00% Senior Notes Indenture]


FSA MEMBERSHIP SERVICES, LLC
By:   /s/ Marilyn J. Wasser
Name:   Marilyn J. Wasser
Title:   Executive Vice President

[12.00% Senior Notes Indenture]


ALPHA REFERRAL NETWORK LLC

ASSOCIATED CLIENT REFERRAL LLC

ASSOCIATES REALTY NETWORK

BURGDORFF LLC

BURGDORFF REFERRAL ASSOCIATES LLC

BURNET REALTY LLC

CAREER DEVELOPMENT CENTER, LLC

COLDWELL BANKER COMMERCIAL PACIFIC PROPERTIES LLC

COLDWELL BANKER PACIFIC PROPERTIES LLC

COLDWELL BANKER REAL ESTATE SERVICES LLC

COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY

COLDWELL BANKER RESIDENTIAL BROKERAGE LLC

COLDWELL BANKER RESIDENTIAL REAL ESTATE LLC

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK, INC.

COLORADO COMMERCIAL, LLC

HOME REFERRAL NETWORK LLC

JACK GAUGHEN LLC

NRT ARIZONA LLC

NRT ARIZONA COMMERCIAL LLC

NRT ARIZONA REFERRAL LLC

NRT COLORADO LLC

NRT COLUMBUS LLC

NRT COMMERCIAL LLC

NRT COMMERCIAL UTAH LLC

NRT DEVELOPMENT ADVISORS LLC

NRT DEVONSHIRE LLC

NRT HAWAII REFERRAL, LLC

NRT LLC

NRT MID-ATLANTIC LLC

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

[12.00% Senior Notes Indenture]


NRT MISSOURI LLC

NRT MISSOURI REFERRAL NETWORK LLC

NRT NEW ENGLAND LLC

NRT NEW YORK LLC

NRT NORTHFORK LLC

NRT PITTSBURGH LLC

NRT REFERRAL NETWORK LLC

NRT RELOCATION LLC

NRT REOEXPERTS LLC

NRT SUNSHINE INC.

NRT TEXAS LLC

NRT UTAH LLC

REAL ESTATE REFERRAL LLC

REAL ESTATE REFERRALS LLC

REAL ESTATE SERVICES LLC

REFERRAL ASSOCIATES OF NEW ENGLAND LLC

REFERRAL NETWORK, LLC

REFERRAL NETWORK PLUS, INC.

SOTHEBY’S INTERNATIONAL REALTY, INC.

SOTHEBY’S INTERNATIONAL REALTY REFERRAL COMPANY, LLC

THE SUNSHINE GROUP (FLORIDA) LTD. CORP.

THE SUNSHINE GROUP, LTD.

VALLEY OF CALIFORNIA, INC.

By:   Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

[12.00% Senior Notes Indenture]


THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:   /s/ Justin Huff
  Name: Justin Huff
  Title: Senior Associate

[12.00% Senior Notes Indenture]


Appendix A

PROVISIONS RELATING TO INITIAL NOTES,

ADDITIONAL NOTES AND EXCHANGE NOTES

Section 1.1 Definitions.

(a) Capitalized Terms.

Capitalized terms used but not defined in this Appendix A have the meanings given to them in the Indenture. The following capitalized terms have the following meanings:

Applicable Procedures ” means, with respect to any transfer or transaction involving a Regulation S Global Note or beneficial interest therein, the rules and procedures of the Depositary for such Global Note, Euroclear and Clearstream, in each case to the extent applicable to such transaction and as in effect from time to time.

Clearstream ” means Clearstream Banking, Société Anonyme, or any successor securities clearing agency.

Euroclear ” means the Euroclear Clearance System or any successor securities clearing agency.

IAI ” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

Institutional Accredited Investor Notes ” means all Definitive Notes offered and sold to IAIs in reliance on Regulation D under the Securities Act in connection with the exchange of the Existing Senior Toggle Notes for Notes.

QIB ” means a “qualified institutional buyer” as defined in Rule 144A.

Regulation S ” means Regulation S promulgated under the Securities Act.

Regulation S Notes ” means all Notes offered and sold outside the United States in reliance on Regulation S.

Restricted Period ”, with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (a) the day on which such Notes are first offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S, notice of which day shall be promptly given by the Issuer to the Trustee, and (b) the date of issuance with respect to any such Notes (with respect to Initial Notes, only clause (b) shall be applicable).

Rule 501 ” means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

Rule 144 ” means Rule 144 promulgated under the Securities Act.

Rule 144A ” means Rule 144A promulgated under the Securities Act.

Rule 144A Notes ” means all Notes offered and sold to QIBs in reliance on Rule 144A.

Rule 904 ” means Rule 904 promulgated under the Securities Act.


(b) Other Definitions.

 

Term :    Defined in Section :

“Agent Members”

   2.1(c)

“Automatic Exchange”

   2.3(i)

“Automatic Exchange Date”

   2.3(i)

“Automatic Exchange Notice”

   2.3(i)

“Automatic Exchange Notice Date”

   2.3(i)

“Global Note”

   2.1(b)

“IAI Global Note”

   2.1(b)

“Regulation S Global Note”

   2.1(b)

“Regulation S Permanent Global Note”

   2.1(b)

“Regulation S Temporary Global Note”

   2.1(b)

“Restricted Note”

   2.3(i)

“Rule 144A Global Note”

   2.1(b)

“Unrestricted Note”

   2.3(i)

Section 2.1 Form and Dating

(a) The Initial Notes issued on the date hereof will be offered and sold by the Issuer only to (1) QIBs in reliance on Section 4(2) of the Securities Act and (2) IAIs in reliance on Regulation D under the Securities Act. Such Initial Notes may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and IAIs in accordance with Rule 501. Subsequent to the Issue Date, Additional Notes may be (i) offered and sold by the Issuer to initial purchasers and (ii) resold, initially only to (1) QIBs in reliance on Rule 144A and (2) Persons other than U.S. Persons (as defined in Regulation S). Such Additional Notes may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and IAIs in accordance with Rule 501.

(b)  Global Notes. Rule 144A Notes shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form (collectively, the “ Rule 144A Global Note ”), without interest coupons and bearing the Global Notes Legend, the Restricted Notes Legend and the OID Legend, which shall be registered in the name of the Depositary or a nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture. Regulation S Notes shall be issued initially in the form of one or more global Notes (collectively, the “ Regulation S Temporary Global Note ” and together with the Regulation S Permanent Global Note (identified below) the “ Regulation S Global Note ”), without interest coupons and bearing the Global Notes Legend, the Restricted Notes Legend and the OID Legend, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture to accommodate transfers of beneficial interests in the Notes to non-U.S. Persons subsequent to the initial distribution. One or more global Notes in definitive, fully registered form without interest coupons and bearing the Global Notes Legend, the Restricted Notes Legend and the OID Legend (collectively, the “ IAI Global Note ”) shall also be issued on the Issue Date, deposited with the Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture to accommodate transfers of beneficial interests in the Notes to IAIs subsequent to the initial distribution in the Existing Notes Exchange Offer. Beneficial ownership interests in the Regulation S Global Note shall not be exchangeable for interests in the Rule 144A Global Note, the IAI Global Note or any other Note without a Restricted Notes Legend until the expiration of the

 

Appendix-2


Restricted Period. The Rule 144A Global Note, the IAI Global Note, the Regulation S Temporary Global Note and the Regulation S Permanent Global Note are each referred to herein as a “ Global Note ” and are collectively referred to herein as “ Global Notes ”, provided that the term “Global Note” when used in Sections 2.1(c), 2.3(f), 2.3(g)(i), 2.3(h)(i), 2.3(h)(ii) and 2.4 shall also include any Note in global form issued in connection with an Exchange Offer. The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee and on the schedules thereto as hereinafter provided.

The Restricted Period shall be terminated upon certification in form reasonably satisfactory to the Trustee, if required, that beneficial ownership interests in the Regulation S Temporary Global Note are owned either by non-U.S. Persons or U.S. Persons who purchased such interests in a transaction that did not require registration under the Securities Act (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who shall take delivery of a beneficial ownership interest in a 144A Global Note bearing a Restricted Notes Legend, all as contemplated by this Appendix A).

Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in a Global Note (the “ Regulation S Permanent Global Note ”) pursuant to the applicable procedures of the Depositary. Simultaneously with the authentication of the Regulation S Permanent Global Note, the Trustee shall cancel the Regulation S Temporary Global Note.

The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Security and the Regulation S Permanent Global Security that are held by participants through Euroclear or Clearstream.

(c) Institutional Accredited Investor Notes. Institutional Accredited Investor Notes shall be issued initially in the form of one or more permanent Definitive Notes, without interest coupons and bearing the Restricted Notes Legend, the Definitive Notes Legend and the OID Legend, which shall be registered in the name of the beneficial owner or owners of such Note (or the nominee of such beneficial owner or owners) and delivered to the respective beneficial owner or owners (or the nominee of such beneficial owner or owners). Upon issuance, any such Institutional Accredited Investor Notes shall be duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture.

(d) Book-Entry Provisions. This Section 2.1(d) shall apply only to a Global Note deposited with or on behalf of the Depositary.

The Issuer shall execute and the Trustee shall, in accordance with this Section 2.1(d) and Section 2.2 and pursuant to an order of the Issuer signed by one Officer of the Issuer, authenticate and deliver initially one or more Global Notes that (i) shall be registered in the name of the Depositary for such Global Note or Global Notes or the nominee of such Depositary and (ii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions or held by the Trustee as Custodian.

Members of, or participants in, the Depositary (“ Agent Members ”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary or by the Trustee as Custodian or under such Global Note, and the Depositary may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee

 

Appendix-3


or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Note.

(e) Definitive Notes. Except as provided in Section 2.3 or 2.4, owners of beneficial interests in Global Notes will not be entitled to receive physical delivery of certificated Notes.

Section 2.2 Authentication. The Trustee shall authenticate and make available for delivery upon an Issuer Order (a) Initial Notes for original issue on the date hereof in an aggregate principal amount of $129,579,298, (b) subject to the terms of this Indenture, Additional Notes, (c) the Exchange Notes for issue only in an Exchange Offer and pursuant to the Registration Rights Agreement and for a like principal amount of Initial Notes exchanged pursuant thereto and (d) upon an Automatic Exchange, Unrestricted Notes. Such Issuer Order shall specify the amount of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated and whether the Notes are to be Initial Notes, Additional Notes, Exchange Notes or Unrestricted Notes.

Section 2.3 Transfer and Exchange.

(a)  Transfer and Exchange of Definitive Notes. When Definitive Notes are presented to the Registrar with a request:

(i) to register the transfer of such Definitive Notes; or

(ii) to exchange such Definitive Notes for an equal principal amount of Definitive Notes of other authorized denominations,

the Registrar shall register the transfer or make the exchange as requested if the reasonable requirements for such transaction are met; provided , however , that the Definitive Notes surrendered for transfer or exchange:

(1) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing; and

(2) in the case of Transfer Restricted Notes, are accompanied by the following additional information and documents, as applicable:

(A) if such Definitive Notes are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect (in the form set forth on the reverse side of the Initial Note); or

(B) if such Definitive Notes are being transferred to the Issuer, a certification to that effect (in the form set forth on the reverse side of the Initial Note); or

(C) if such Definitive Notes are being transferred pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or in reliance upon another exemption from the registration requirements of the Securities Act, (x) a certification to that effect (in the form set forth in Exhibit C ) and (y) if the Issuer so requests, an opinion of counsel or other evidence reasonably satisfactory to them as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i).

 

Appendix-4


(b)  Restrictions on Transfer of a Definitive Note for a Beneficial Interest in a Global Note. A Definitive Note may not be exchanged for a beneficial interest in a Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Registrar, together with:

(i) certification (in the form set forth on the reverse side of the Initial Note) that such Definitive Note is being transferred (1) to a QIB in accordance with Rule 144A, (2) to an IAI that has furnished to the Trustee a signed letter substantially in the form of Exhibit C or (3) outside the United States in an offshore transaction within the meaning of Regulation S and in compliance with Rule 904 under the Securities Act; and

(ii) written instructions directing the Trustee to make, or to direct the Custodian to make, an adjustment on its books and records with respect to such Global Note to reflect an increase in the aggregate principal amount of the Notes represented by the Global Note, such instructions to contain information regarding the Depositary account to be credited with such increase, then the Trustee shall cancel such Definitive Note and cause, or direct the Custodian to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Custodian, the aggregate principal amount of Notes represented by the Global Note to be increased by the aggregate principal amount of the Definitive Note to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Note equal to the principal amount of the Definitive Note so canceled. If no Global Notes are then outstanding and the Global Note has not been previously exchanged for certificated securities pursuant to Section 2.4, the Issuer shall issue and the Trustee shall authenticate, upon an Issuer Order, a new Global Note in the appropriate principal amount.

(c)  Transfer and Exchange of Global Notes. (i) The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depositary, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depositary therefor. A transferor of a beneficial interest in a Global Note shall deliver a written order given in accordance with the Depositary’s procedures containing information regarding the participant account of the Depositary to be credited with a beneficial interest in such Global Note or another Global Note and such account shall be credited in accordance with such order with a beneficial interest in the applicable Global Note and the account of the Person making the transfer shall be debited by an amount equal to the beneficial interest in the Global Note being transferred. Transfers by an owner of a beneficial interest in the Rule 144A Global Note or the IAI Global Note to a transferee who takes delivery of such interest through the Regulation S Global Note, whether before or after the expiration of the Restricted Period, shall be made only upon receipt by the Trustee of a certification in the form provided on the reverse of the Initial Notes from the transferor to the effect that such transfer is being made in accordance with Regulation S or (if available) Rule 144 under the Securities Act and that, if such transfer is being made prior to the expiration of the Restricted Period, the interest transferred shall be held immediately thereafter through Euroclear or Clearstream. In the case of a transfer of a beneficial interest in either the Regulation S Global Note or the Rule 144A Global Note for an interest in the IAI Global Note, the transferee must furnish a signed letter substantially in the form of Exhibit C to the Trustee.

(ii) If the proposed transfer is a transfer of a beneficial interest in one Global Note to a beneficial interest in another Global Note, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of Global Note from which such interest is being transferred.

 

Appendix-5


(iii) Notwithstanding any other provisions of this Appendix A (other than the provisions set forth in Section 2.4), a Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

(iv) In the event that a Global Note is exchanged for Definitive Notes pursuant to Section 2.4 prior to the consummation of the Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such Notes, such Notes may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Notes intended to ensure that such transfers comply with Rule 144A, Regulation S or such other applicable exemption from registration under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Issuer.

(d) Restrictions on Transfer of Regulation S Global Note . (i) Prior to the expiration of the Restricted Period, interests in the Regulation S Global Note may only be held through Euroclear or Clearstream. During the Restricted Period, beneficial ownership interests in the Regulation S Global Note may only be sold, pledged or transferred through Euroclear or Clearstream in accordance with the Applicable Procedures and only (1) to the Issuer, (2) so long as such security is eligible for resale pursuant to Rule 144A, to a Person whom the selling holder reasonably believes is a QIB that purchases for its own account or for the account of a QIB to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, (3) in an offshore transaction in accordance with Regulation S, (4) pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if applicable) under the Securities Act or another available exemption, (5) to an IAI purchasing for its own account, or for the account of such an IAI, in a minimum principal amount of Notes of $250,000 or (6) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. Prior to the expiration of the Restricted Period, transfers by an owner of a beneficial interest in the Regulation S Global Note to a transferee who takes delivery of such interest through the Rule 144A Global Note or the IAI Global Note shall be made only in accordance with Applicable Procedures and upon receipt by the Trustee of a written certification from the transferor of the beneficial interest in the form provided on the reverse of the Initial Note to the effect that such transfer is being made to (1) a QIB within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A or (2) an IAI purchasing for its own account, or for the account of such an IAI, in a minimum principal amount of the Notes of $250,000. Such written certification shall no longer be required after the expiration of the Restricted Period. In the case of a transfer of a beneficial interest in the Regulation S Global Note for an interest in the IAI Global Note, the transferee must furnish a signed letter substantially in the form of Exhibit C to the Trustee.

(ii) Upon the expiration of the Restricted Period, beneficial ownership interests in the Regulation S Global Note shall be transferable in accordance with applicable law and the other terms of this Indenture.

(e)  Legend .

(i) Except as permitted by the following paragraphs (ii), (iii) or (iv), each Note certificate evidencing the Global Notes and the Definitive Notes (and all Notes issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only):

 

Appendix-6


“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

(1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “QIB”) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER REGULATION D OF THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”) [ WITH RESPECT TO ADDITIONAL NOTES: OR (C) IT PURCHASED PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT],

(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144 (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN A TRANSACTION EXEMPT FROM THE REQUIREMENTS OF THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION, OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND

(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE.

[ IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S.]

THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED AT ANY TIME

 

Appendix-7


BEGINNING NO LATER THAN 10 DAYS AFTER JANUARY 5, 2011 BY WRITING TO: THE COMPANY AT REALOGY CORPORATION, ONE CAMPUS DRIVE, PARSIPPANY, NJ 07054, ATTENTION: CHIEF FINANCIAL OFFICER.”

Each Definitive Note shall bear the following additional legend:

“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

(ii) Upon any sale or transfer of a Transfer Restricted Note that is a Definitive Note, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Note for a Definitive Note that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Note if the Holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Initial Note).

(iii) After a transfer of any Initial Notes or Additional Notes during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Notes or Additional Notes, as the case may be, all requirements pertaining to the Restricted Notes Legend on such Initial Notes or Additional Notes shall cease to apply and the requirements that any such Initial Notes or Additional Notes be issued in global form shall continue to apply.

(iv) Upon the consummation of an Exchange Offer with respect to the Initial Notes or Additional Notes pursuant to which Holders of such Initial Notes or Additional Notes are offered Exchange Notes in exchange for their Initial Notes or Additional Notes, all requirements pertaining to Initial Notes or Additional Notes that Initial Notes or Additional Notes be issued in global form shall continue to apply, and Exchange Notes in global form without the Restricted Notes Legend shall be available to Holders that exchange such Initial Notes or Additional Notes in such Exchange Offer.

(v) Upon a sale or transfer after the expiration of the Restricted Period of any Initial Note or Additional Note acquired pursuant to Regulation S, all requirements that such Initial Note or Additional Note bear the Restricted Notes Legend shall cease to apply and the requirements requiring any such Initial Note or Additional Note be issued in global form shall continue to apply.

(vi) Any Additional Notes sold in a registered offering shall not be required to bear the Restricted Notes Legend.

(f) Cancelation or Adjustment of Global Note. At such time as all beneficial interests in a Global Note have either been exchanged for Definitive Notes, transferred, redeemed, repurchased or canceled, such Global Note shall be returned by the Depositary to the Trustee for cancelation or retained and canceled by the Trustee. At any time prior to such cancelation, if any beneficial interest in a Global Note is exchanged for Definitive Notes, transferred in exchange for an interest in another Global Note, redeemed, repurchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Custodian, to reflect such reduction.

 

Appendix-8


(g)  Obligations with Respect to Transfers and Exchanges of Notes.

(i) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate, Definitive Notes and Global Notes at the Registrar’s request.

(ii) No service charge shall be made for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 2.07, 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 of this Indenture).

(iii) Prior to the due presentation for registration of transfer of any Note, the Issuer, the Trustee, the Paying Agent or the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuer, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.

(iv) All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.

(h) No Obligation of the Trustee .

(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depositary or any other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to the registered Holders (which shall be the Depositary or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners.

(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

(i) Automatic Exchange from Global Note Bearing Restricted Notes Legend to Global Note Not Bearing Restricted Notes Legend . Upon the Issuer’s satisfaction that the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act, beneficial interests in a Global Note or in a Definitive Note bearing the Restricted Notes Legend (a “ Restricted Note ”) may be automatically exchanged into beneficial interests in a Global Note

 

Appendix-9


or Definitive Note, as applicable, not bearing the Restricted Notes Legend (an “ Unrestricted Note ”) without any action required by or on behalf of the Holder (the “ Automatic Exchange ”) at any time on or after the date that is the 366th calendar day after (A) with respect to the Initial Notes, the Issue Date or (B) with respect to Additional Notes, if any, the issue date of such Additional Notes, or, in each case, if such day is not a business day, on the next succeeding business day (the “ Automatic Exchange Date ”). Upon the Issuer’s satisfaction that the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act, the Issuer may, but shall not be obligated to, pursuant to the Applicable Procedures (i) provide written notice to DTC at least fifteen (15) calendar days prior to the Automatic Exchange Date, instructing DTC to exchange all of the outstanding beneficial interests in a particular Restricted Global Note to the Unrestricted Global Note, which the Issuer shall have previously otherwise made eligible for exchange with the DTC, (ii) provide prior written notice (the “ Automatic Exchange Notice ”) to each Holder at such Holder’s address appearing in the register of Holders at least fifteen (15) calendar days prior to the Automatic Exchange Date (the “ Automatic Exchange Notice Date ”), which notice must include (w) the Automatic Exchange Date, (x) the section of this Indenture pursuant to which the Automatic Exchange shall occur, (y) the CUSIP number of the Restricted Global Note from which such Holder’s beneficial interests will be transferred and (z) the CUSIP number of the Unrestricted Global Note into which such Holder’s beneficial interests will be transferred, and (iii) on or prior to the Automatic Exchange Date, deliver to the Trustee for authentication one or more Unrestricted Global Notes, duly executed by the Issuer, in an aggregate principal amount equal to the aggregate principal amount of Restricted Global Notes to be exchanged. Upon receipt by the Trustee of an Officer’s Certificate of the Issuer setting forth the information to be stated in such Automatic Exchange Notice, which Officer’s Certificate must be received by the Trustee, on no less than five (5) calendar days prior to the Automatic Exchange Notice Date, the Trustee shall deliver, in the Issuer’s name and at the Issuer’s expense, the Automatic Exchange Notice to each Holder at such Holder’s address appearing in the register of Holders. Notwithstanding anything to the contrary in this Section 2.3(i), during the fifteen (15) day period prior to the Automatic Exchange Date, no transfers or exchanges other than pursuant to this Section 2.3(i) shall be permitted without the prior written consent of the Issuer. As a condition to any Automatic Exchange, the Issuer shall provide, and the Trustee shall be entitled to rely upon, an Officer’s Certificate and Opinion of Counsel in form reasonably acceptable to the Trustee , each to the effect that the Automatic Exchange shall be effected in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act and that the aggregate principal amount of the particular Restricted Global Note is to be transferred to the particular Unrestricted Global Note by adjustment made on the records of the Trustee, as custodian for the Depositary to reflect the Automatic Exchange. Upon such exchange of beneficial interests pursuant to this Section 2.3(i), the aggregate principal amount of the Global Notes shall be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, to reflect the relevant increase or decrease in the principal amount of such Global Note resulting from the applicable exchange. The Issuer shall also provide written notice to the Holder of Restricted Notes that are Definitive Notes at least (15) calendar days prior to the Automatic Exchange Date offering to exchange all of such Definitive Notes for Unrestricted Notes which shall include information similar to the notice provided to Holders of Global Notes under clause (ii) above and upon request of such Holder of Definitive Notes shall follow the procedures set forth above for exchanging such Definitive Notes for Definitive Notes that are not Restricted Notes. The Restricted Notes from which beneficial interests are transferred pursuant to an Automatic Exchange shall be canceled following the Automatic Exchange.

 

Appendix-10


Section 2.4 Definitive Notes.

(a) A Global Note deposited with the Depositary or with the Trustee as Custodian pursuant to Section 2.1 or issued in connection with an Exchange Offer shall be transferred to the beneficial owners thereof in the form of Definitive Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 and (i) the Depositary notifies the Issuer that it is unwilling or unable to continue as a Depositary for such Global Note or if at any time the Depositary ceases to be a “clearing agency” registered under the Exchange Act and, in each case, a successor depositary is not appointed by the Issuer within 90 days of such notice or after the Issuer becomes aware of such cessation, or (ii) an Event of Default has occurred and is continuing or (iii) the Issuer, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of certificated Notes under this Indenture; provided that in no event shall the Regulation S Temporary Global Note be exchanged by the Issuer for Definitive Notes prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act.

(b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depositary to the Trustee, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section shall be executed, authenticated and delivered only in denominations of $2,000 and integral multiples of $1 in excess thereof and registered in such names as the Depositary shall direct. Any certificated Initial Note or Additional Note in the form of a Definitive Note delivered in exchange for an interest in the Global Note shall, except as otherwise provided by Section 2.3(e), bear the Restricted Notes Legend.

(c) Subject to the provisions of Section 2.4(b), the registered Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

(d) In the event of the occurrence of any of the events specified in Section 2.4(a)(i), (ii) or (iii), the Issuer will promptly make available to the Trustee a reasonable supply of Definitive Notes in fully registered form without interest coupons.

 

Appendix-11


Exhibit A

[FORM OF FACE OF INITIAL NOTE]

[RULE 144A][REGULATION S][IAI][GLOBAL] NOTE

[Global Notes Legend]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[Restricted Notes Legend]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

(1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “QIB”) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER REGULATION D OF THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”) [ WITH RESPECT TO ADDITIONAL NOTES: OR (C) IT PURCHASED PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT],

(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144 (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, FOR INVESTMENT PURPOSES AND NOT WITH


A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN A TRANSACTION EXEMPT FROM THE REQUIREMENTS OF THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND

(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE.

[ IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S.]

[Temporary Regulation S Global Notes Legend]

THIS SECURITY IS A TEMPORARY GLOBAL SECURITY. PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD BY ANY PERSON OTHER THAN (1) A NON-U.S. PERSON OR (2) A U.S. PERSON THAT PURCHASED SUCH INTEREST IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). BENEFICIAL INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR CERTIFICATED NOTES OTHER THAN A PERMANENT GLOBAL NOTE IN ACCORDANCE WITH THE TERMS OF THE INDENTURE. TERMS IN THIS LEGEND ARE USED AS USED IN REGULATION S UNDER THE SECURITIES ACT.

[Definitive Notes Legend]

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

[OID Legend]

THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED AT ANY TIME BEGINNING NO LATER THAN 10 DAYS AFTER JANUARY 5, 2011 BY WRITING TO: THE

 

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COMPANY AT REALOGY CORPORATION, ONE CAMPUS DRIVE, PARSIPPANY, NJ 07054, ATTENTION: CHIEF FINANCIAL OFFICER.

 

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CUSIP [                    ]

ISIN [                    ]

[RULE 144A][REGULATION S][IAI][GLOBAL] NOTE

12.00% Senior Notes due 2017

January 5, 2011

 

No.

      Principal Amount [$                      ][, as revised by the Schedule of Exchanges of Interests in Global Security attached hereto] 1

REALOGY CORPORATION

promises to pay to [CEDE & CO.] 1 [Name of IAI] 2 or registered assigns, [the principal sum of [            ] United States Dollars, revised by the Schedule of Exchanges of Interests in Global Security attached hereto,] 1 [[            ] United States Dollars] 2 on April 15, 2017.

Interest Payment Dates: April 15 and October 15

Record Dates: April 1 and October 1

 

 

1

Insert in Global Notes

2

Insert in Definitive Notes

 

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IN WITNESS HEREOF, the Issuer has caused this instrument to be duly executed as of the date first set forth above.

 

REALOGY CORPORATION
By:    
  Name:
  Title:

 

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This is one of the Notes referred to in the within-mentioned Indenture:

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:    
  Authorized Signatory

Dated:

 

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[FORM OF BACK OF INITIAL NOTE]

12.00% Senior Notes due 2017

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. Realogy Corporation, a Delaware corporation, promises to pay interest on the principal amount of this Note at 11.75% per annum from October 15, 2010 to, but not including the Issue Date, and 12.00% per annum from the Issue Date until maturity and shall pay the Additional Interest, if any, payable pursuant to the Registration Rights Agreement referred to below. The Issuer will pay interest and Additional Interest, if any, semi-annually in arrears on April 15 and October 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “ Interest Payment Date ”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from October 15, 2010; provided that the first Interest Payment Date shall be April 15, 2011. The Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the interest rate on the Notes; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest, and Additional Interest, if any, (without regard to any applicable grace periods) from time to time on demand at the interest rate on the Notes. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

2. METHOD OF PAYMENT. The Issuer will pay interest on the Notes and Additional Interest, if any, to the Persons who are registered Holders of Notes at the close of business on April 1 or October 1 (whether or not a Business Day), as the case may be, next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Principal of, premium, if any, and interest and Additional Interest, if any, on the Notes will be payable at the office or agency of the Issuer maintained for such purpose or, at the option of the Issuer, payment of interest and Additional Interest, if any, may be made by check mailed to the Holders at their respective addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Additional Interest, if any, on all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Issuer or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York Mellon Trust Company, N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuer may change any Paying Agent or Registrar without notice to the Holders. The Issuer or any of its Wholly Owned Subsidiaries may act in any such capacity.

4. INDENTURE. The Issuer issued the Notes under an Indenture, dated as of January 5, 2011 (the “ Indenture ”), among Realogy Corporation, Domus Holdings Corp., the Note Guarantors named therein and the Trustee. This Note is one of a duly authorized issue of notes of the Issuer designated as its 12.00% Senior Notes due 2017. The Issuer shall be entitled to issue Additional Notes pursuant to Section 2.01 and 4.09 of the Indenture. The Notes (including any Exchange Notes issued in exchange therefor) and Additional Notes shall be treated as a single class of securities for all purposes under the Indenture. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “ TIA ”). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement

 

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of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION.

(a) Except as described under clauses (b) and (c) below, the Notes will not be redeemable at the Issuer’s option before April 15, 2013.

(b) At any time and from time to time prior to April 15, 2013, the Issuer may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice mailed by first class mail to the registered address of each Holder (or electronically transmitted) or otherwise in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the date of redemption, subject to the rights of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(c) At any time and from time to time on or prior to April 15, 2013, the Issuer may redeem in the aggregate up to 100% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent of the Issuer, in each case to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer from it, at a redemption price (expressed as a percentage of the principal amount thereof) of 112.000%, plus accrued and unpaid interest and Additional Interest, if any, to the date of redemption (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided, however, that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed (or electronically transmitted) to each Holder of Notes being redeemed and otherwise in accordance with the procedures set forth in the Indenture.

(d) Notice of any redemption upon any Equity Offering may be given prior to the completion of such Equity Offering, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

(e) On and after April 15, 2013, the Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, upon notice pursuant to Section 3.03 of the Indenture at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable date of redemption, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on April 15 of each of the years indicated below:

 

Year

   Redemption
Price
 

2013

     106.000

2014

     103.000

2015 and thereafter

     100.000

(f) Any redemption pursuant to this paragraph 5 shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.

 

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6. MANDATORY REDEMPTION. The Issuer shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

7. NOTICE OF REDEMPTION. Subject to Section 3.09 of the Indenture, notice of redemption will be mailed by first class mail, postage prepaid (or electronically transmitted), at least 30 days but not more than 60 days before the redemption date (except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 13 of the Indenture) to each Holder whose Notes are to be redeemed at its registered address or otherwise in accordance with the procedures of DTC. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1 in excess of $2,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date, interest ceases to accrue on Notes or portions thereof called for redemption.

8. OFFERS TO REPURCHASE.

(a) Upon the occurrence of a Change of Control, each Holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Issuer to repurchase all or any part (equal to $2,000 or an integral multiple of $1 in excess thereof) of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase (subject to the right of the Holders of record on the relevant Record Date to receive interest due of the relevant Interest Payment Date), as provided in, and subject to the terms of, the Indenture. The Change of Control Offer shall be made in accordance with Section 4.14 of the Indenture.

(b) If the Issuer or any of its Restricted Subsidiaries consummates an Asset Sale, within 10 Business Days after the date that Excess Proceeds exceed $30.0 million, the Issuer shall commence an offer to all Holders of the Notes (and at the option of the Issuer to the holders of any Senior Pari Passu Indebtedness) (an “ Asset Sale Offer ”), to purchase the maximum principal amount of Notes (and such Senior Pari Passu Indebtedness) that is a minimum of $2,000 or an integral multiple of $1 that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Senior Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and Additional Interest, if any (or, in respect of such Senior Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes (and such Senior Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes or any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes (and such Senior Pari Passu Indebtedness) surrendered by such holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes (and such Senior Pari Passu Indebtedness) to be purchased on a pro rata basis, by lot or by such other method as Trustee shall deem fair and appropriate (and in a manner as complies with applicable legal requirements); provided that no Notes of $2,000 or less shall be purchased in part, except that if all of the Notes of a Holder are to be purchased, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1 in excess thereof, shall be purchased. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Issuer prior to any related Purchase Date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” attached to the Notes.

9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1 in excess thereof. The

 

A-9


transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents, and Holders shall be required to pay any taxes and fees required by law or permitted by the Indenture. The Issuer need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuer need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed.

10. SUBORDINATION. The Holdings Guarantee is subordinated to Holdings Senior Indebtedness of Holdings on the terms and subject to the conditions set forth in the Indenture. To the extent provided in the Indenture, Holdings Senior Indebtedness must be paid before the Holdings Guarantee may be paid. The Issuer agrees, and each Holder by accepting a Note agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give effect thereto and appoints the Trustee as attorney-in-fact for such purpose.

11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.

12. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees or the Notes may be amended or supplemented as provided in the Indenture.

13. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes by notice to the Issuer may declare the principal of, premium, if any, interest, Additional Interest, if any, and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture, the Notes or the Guarantees except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default (except a Default relating to the payment of principal, premium, if any, Additional Interest, if any, or interest) if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture except a continuing Default in payment of the principal of, premium, if any, Additional Interest, if any, or interest on, any of the Notes held by a non-consenting Holder (including in connection with an Asset Sale Offer or a Change of Control Offer). The Issuer, Holdings and each Note Guarantor (to the extent that Holdings or such Note Guarantor is so required under the TIA) are required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required to deliver to the Trustee, within thirty (30) days after the occurrence of a Default, written notice in the form of an Officer’s Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

14. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.

15. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED NOTES. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Transfer Restricted Notes shall have all rights set forth in the Registration Rights Agreement, dated as of January

 

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5, 2011, among Realogy Corporation, Domus Holdings Corp., the Note Guarantors named therein and the other parties named on the signature pages thereof (the “ Registration Rights Agreement ”), including the right to receive Additional Interest (as defined in the Registration Rights Agreement).

16. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE GUARANTEES.

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

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to the Issuer at the following address:

c/o Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

 

A-11


ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:                                                                                                                                                

                                                                              (Insert assignee’s legal name)

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                                                                                                                              to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.

Date:                                 

 

Your Signature:    
  (Sign exactly as your name appears on the face of this Note)

 

Signature Guarantee*:    

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-12


CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF TRANSFER RESTRICTED NOTES

This certificate relates to $              principal amount of Notes held in (check applicable space)              book-entry or              definitive form by the undersigned.

The undersigned (check one box below):

 

¨ has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Note held by the Depositary a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above) in accordance with the Indenture; or

 

¨ has requested the Trustee by written order to exchange or register the transfer of a Note or Notes.

In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144 under the Securities Act, the undersigned confirms that such Notes are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

 

(1)    ¨    to the Issuer; or
(2)    ¨    to the Registrar for registration in the name of the Holder, without transfer; or
(3)    ¨    pursuant to an effective registration statement under the Securities Act of 1933; or
(4)    ¨    inside the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or
(5)    ¨    outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or
(6)    ¨    to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements; or
(7)    ¨    pursuant to another available exemption from registration under the Securities Act of 1933.

 

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Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided , however , that if box (5), (6) or (7) is checked, the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuer has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.

 

   
Your Signature

 

Signature Guarantee:            

 

Date:                                     

     
Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee       Signature of Signature Guarantee

TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

Dated:                                         
    NOTICE: To be executed by an executive officer

 

A-14


OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:

¨ Section 4.10             ¨ Section 4.14

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased:

$                     

 

Date:         Your Signature:     
        (Sign exactly as your name appears on the face of this Note)
    Tax Identification No.:    
Signature Guarantee*:     

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-15


SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $              . The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

 

Date of
Exchange

   Amount of
decrease
in Principal
Amount of this
Global Note
   Amount of increase
in Principal
Amount of this
Global Note
   Principal
Amount of
this Global Note
following such
decrease or
increase
   Signature of
authorized officer
of Trustee or
Custodian

 

 

* This schedule should be included only if the Note is issued in global form.

 

A-16


Exhibit B

[FORM OF FACE OF EXCHANGE NOTE]

[Global Notes Legend]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[Definitive Notes Legend]

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

[OID Legend]

THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED AT ANY TIME BEGINNING NO LATER THAN 10 DAYS AFTER JANUARY 5, 2011 BY WRITING TO: THE COMPANY AT REALOGY CORPORATION, ONE CAMPUS DRIVE, PARSIPPANY, NJ 07054, ATTENTION: CHIEF FINANCIAL OFFICER.

 


CUSIP: [                    ]

ISIN: [                    ]

[GLOBAL] NOTE

12.00% Senior Notes due 2017

[                    ]

 

No.             

      Principal Amount [$                      ][, as revised by the Schedule of Exchanges of Interests in Global Security attached hereto] 1

REALOGY CORPORATION

promises to pay to [CEDE & CO.] 1 or registered assigns, the principal sum of                              United States Dollars [, revised by the Schedule of Exchanges of Interests in Global Security attached hereto,] 1 on April 15, 2017.

Interest Payment Dates: April 15 and October 15

Record Dates: April 1 and October 1

 

1

Insert in Global Notes

 

B-2


IN WITNESS HEREOF, the Issuer has caused this instrument to be duly executed as of the date first set forth above.

 

REALOGY CORPORATION
By:    
  Name:
  Title:

 

B-3


This is one of the Notes referred to in the within-mentioned Indenture:

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:    
  Authorized Signatory

Dated:

 

B-4


[FORM OF BACK OF EXCHANGE NOTE]

12.00% Senior Notes due 2017

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. Realogy Corporation, a Delaware corporation, promises to pay interest on the principal amount of this Note at 11.75% per annum from October 15, 2010 to, but not including the Issue Date, and 12.00% per annum from the Issue Date until maturity. The Issuer will pay interest, semi-annually in arrears on April 15 and October 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “ Interest Payment Date ”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from October 15, 2010; provided that the first Interest Payment Date shall be April 15, 2011. The Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the interest rate on the Notes; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the interest rate on the Notes. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

2. METHOD OF PAYMENT. The Issuer will pay interest on the Notes to the Persons who are registered Holders of Notes at the close of business on April 1 or October 1 (whether or not a Business Day), as the case may be, next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Principal of, premium, if any, and interest on the Notes will be payable at the office or agency of the Issuer maintained for such purpose or, at the option of the Issuer, payment of interest may be made by check mailed to the Holders at their respective addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium, on all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Issuer or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York Mellon Trust Company N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuer may change any Paying Agent or Registrar without notice to the Holders. The Issuer or any of its Wholly Owned Subsidiaries may act in any such capacity.

4. INDENTURE. The Issuer issued the Notes under an Indenture, dated as of January 5, 2011 (the “ Indenture ”), among Realogy Corporation, Domus Holdings Corp., the Note Guarantors named therein and the Trustee. This Note is one of a duly authorized issue of notes of the Issuer designated as its 12.00% Senior Notes due 2017. The Issuer shall be entitled to issue Additional Notes pursuant to Section 2.01 and 4.09 of the Indenture. The Notes (including any Exchange Notes issued in exchange therefor) and Additional Notes shall be treated as a single class of securities for all purposes under the Indenture. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “ TIA ”). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

 

B-5


5. OPTIONAL REDEMPTION.

(a) Except as described under clauses (b) and (c) below, the Notes will not be redeemable at the Issuer’s option before April 15, 2013.

(b) At any time and from time to time prior to April 15, 2013, the Issuer may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice mailed by first class mail to the registered address of each Holder (or electronically transmitted) or otherwise in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest to the date of redemption, subject to the rights of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(c) At any time and from time to time on or prior to April 15, 2013, the Issuer may redeem in the aggregate up to 100% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent of the Issuer, in each case to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer from it, at a redemption price (expressed as a percentage of the principal amount thereof) of 112.000%, plus accrued and unpaid interest and Additional Interest, if any, to the date of redemption (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided, however, that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed (or electronically transmitted) to each Holder of Notes being redeemed and otherwise in accordance with the procedures set forth in the Indenture.

(d) Notice of any redemption upon any Equity Offering may be given prior to the completion of such Equity Offering, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

(e) On and after April 15, 2013, the Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, upon notice pursuant to Section 3.03 of the Indenture at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon to the applicable date of redemption, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on April 15 of each of the years indicated below:

 

Year

   Redemption
Price
 

2013

     106.000

2014

     103.000

2015 and thereafter

     100.000

(f) Any redemption pursuant to this paragraph 5 shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.

6. MANDATORY REDEMPTION. The Issuer shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

 

B-6


7. NOTICE OF REDEMPTION. Subject to Section 3.09 of the Indenture, notice of redemption will be mailed by first class mail, postage prepaid (or electronically transmitted), at least 30 days but not more than 60 days before the redemption date (except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 13 of the Indenture) to each Holder whose Notes are to be redeemed at its registered address or otherwise in accordance with the procedures of DTC. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1 in excess of $2,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date, interest ceases to accrue on Notes or portions thereof called for redemption.

8. OFFERS TO REPURCHASE.

(a) Upon the occurrence of a Change of Control, each Holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Issuer to repurchase all or any part (equal to $2,000 or an integral multiple of $1 in excess thereof) of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase (subject to the right of the Holders of record on the relevant Record Date to receive interest due of the relevant Interest Payment Date), as provided in, and subject to the terms of, the Indenture. The Change of Control Offer shall be made in accordance with Section 4.14 of the Indenture.

(b) If the Issuer or any of its Restricted Subsidiaries consummates an Asset Sale, within 10 Business Days after the date that Excess Proceeds exceed $30.0 million, the Issuer shall commence an offer to all Holders of the Notes (and at the option of the Issuer to the holders of any Senior Pari Passu Indebtedness) (an “ Asset Sale Offer ”), to purchase the maximum principal amount of Notes (and such Senior Pari Passu Indebtedness) that is a minimum of $2,000 or an integral multiple of $1 that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Senior Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest (or, in respect of such Senior Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes (and such Senior Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes or any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes (and such Senior Pari Passu Indebtedness) surrendered by such holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes (and such Senior Pari Passu Indebtedness) to be purchased on a pro rata basis, by lot or by such other method as Trustee shall deem fair and appropriate (and in a manner as complies with applicable legal requirements); provided that no Notes of $2,000 or less shall be purchased in part, except that if all of the Notes of a Holder are to be purchased, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1 in excess thereof, shall be purchased. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Issuer prior to any related Purchase Date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” attached to the Notes.

9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents, and Holders shall be required to pay any taxes and fees required by law or permitted by the Indenture. The Issuer need not exchange or register the transfer of any Note or portion

 

B-7


of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuer need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed.

10. SUBORDINATION. The Holdings Guarantee is subordinated to Holdings Senior Indebtedness of Holdings on the terms and subject to the conditions set forth in the Indenture. To the extent provided in the Indenture, Holdings Senior Indebtedness must be paid before the Holdings Guarantee may be paid. The Issuer agrees, and each Holder by accepting a Note agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give effect thereto and appoints the Trustee as attorney-in-fact for such purpose.

11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.

12. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees or the Notes may be amended or supplemented as provided in the Indenture.

13. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes by notice to the Issuer may declare the principal of, premium, if any, interest, Additional Interest, if any, and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture, the Notes or the Guarantees except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default (except a Default relating to the payment of principal, premium, if any, or interest) if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture except a continuing Default in payment of the principal of, premium, if any, or interest on, any of the Notes held by a non-consenting Holder (including in connection with an Asset Sale Offer or a Change of Control Offer). The Issuer, Holdings, and each Note Guarantor (to the extent that Holdings or such Note Guarantor is so required under the TIA) are required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required to deliver to the Trustee, within thirty (30) days after the occurrence of a Default, written notice in the form of an Officer’s Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

14. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.

15. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE GUARANTEES.

16. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience

 

B-8


to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to the Issuer at the following address:

c/o Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

 

B-9


ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:                                                                                                                                                

                                                                              (Insert assignee’s legal name)

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                                                                                                                              to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.

Date:                                 

 

Your Signature:    
  (Sign exactly as your name appears on the face of this Note)

 

Signature Guarantee*:    

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

B-10


OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:

¨ Section 4.10              ¨ Section 4.14

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased:

$                     

 

Date:         Your Signature:     
        (Sign exactly as your name appears on the face of this Note)
    Tax Identification No.:    
Signature Guarantee*:         

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

B-11


SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $              . The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

 

Date of Exchange

  

Amount of
decrease
in Principal
Amount of this
Global Note

  

Amount of increase
in Principal
Amount of this
Global Note

  

Principal Amount
of this Global
Note following
such decrease or
increase

  

Signature of
authorized officer
of Trustee or
Custodian

 

 

* This schedule should be included only if the Note is issued in global form.

 

B-12


Exhibit C

FORM OF

TRANSFEREE LETTER OF REPRESENTATION

Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

In care of

The Bank of New York Mellon Trust Company, N.A.

525 William Penn Place, 38 th Floor

Pittsburgh, Pennsylvania 15259

Fax No.: (412) 234-7535

Attention: Corporate Trust Administration

Ladies and Gentlemen:

This certificate is delivered to request a transfer of [             ] principal amount of the 12.00% Senior Notes due 2017 (the “ Notes ”) of Realogy Corporation (the “ Issuer ”).

Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows:

Name:                                      

Address:                                  

Taxpayer ID Number:             

The undersigned represents and warrants to you that:

1. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “ Securities Act ”)), purchasing for our own account or for the account of such an institutional “accredited investor” at least $250,000 principal amount of the Securities, and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we invest in or purchase securities similar to the Notes in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment.

2. We understand that the Notes have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Notes to offer, sell or otherwise transfer such Notes prior to the date that is one year after the later of the date of original issue and the last


date on which the Issuer or any affiliate of the Issuer was the owner of such Notes (or any predecessor thereto) (the “ Resale Restriction Termination Date ”) only (a) to the Issuer, (b) pursuant to a registration statement that has been declared effective under the Securities Act, (c) in a transaction complying with the requirements of Rule 144A under the Securities Act (“ Rule 144A ”), to a person or entity we reasonably believe is a qualified institutional buyer under Rule 144A (a “ QIB ”) that is purchasing for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act, (e) to an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing for its own account or for the account of such an institutional “accredited investor,” in each case in a minimum principal amount of Notes of $250,000, or (f) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Notes is proposed to be made pursuant to clause (e) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuer and the Trustee, which shall provide, among other things, that the transferee is an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Notes for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Issuer and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Notes pursuant to clause (d), (e) or (f) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Issuer and the Trustee.

 

TRANSFEREE:                                   ,
        by:    
 

 

C-2


Exhibit D

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY FUTURE NOTE GUARANTORS

Supplemental Indenture (this “ Supplemental Indenture ”), dated as of              , among              (the “ Guaranteeing Subsidiary ”), a subsidiary of Realogy Corporation, a Delaware corporation (the “ Issuer ”), and The Bank of New York Mellon Trust Company, N.A., as trustee (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, each of the Issuer, Holdings and the Note Guarantors (as defined in the Indenture referred to below) has heretofore executed and delivered to the Trustee an indenture (the “ Indenture ”), dated as of January 5, 2011, providing for the issuance of an unlimited aggregate principal amount of 12.00% Senior Notes due 2017 (the “ Notes ”);

WHEREAS, the Section 4.15 of the Indenture provides that under certain circumstances the Issuer is required to cause the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Issuer, the Trustee and the Guaranteeing Subsidiary are authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee . The Guaranteeing Subsidiary hereby agrees as follows:

(a) Along with Holdings and all Note Guarantors named in the Indenture or any supplemental indenture, to jointly and severally unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that:

(i) the principal of, premium, if any or interest or Additional Interest, if any, on the Notes will be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder whether for payment of principal of, premium, if any, or interest on the Notes and all other monetary obligations of the Issuer under the Indenture and the Notes will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

(ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so


guaranteed or any performance so guaranteed for whatever reason, Holdings, the Note Guarantors and the Guaranteeing Subsidiary shall be jointly and severally obligated to pay the same immediately. This is a guarantee of payment and not a guarantee of collection.

(b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, the Indenture, the Holdings Guarantee or any other Note Guarantee, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, Holdings or any Note Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor.

(c) The following is hereby waived: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of either of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever.

(d) This Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, the Indenture and this Supplemental Indenture, and the Guaranteeing Subsidiary accepts all obligations of a Note Guarantor under the Indenture.

(e) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, Holdings, the Note Guarantors (including the Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer, Holdings or the Note Guarantors, any amount paid either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(f) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(g) As between the Guaranteeing Subsidiary, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guaranteeing Subsidiary for the purpose of this Note Guarantee.

(h) The Guaranteeing Subsidiary shall have the right to seek contribution from Holdings or any non-paying Note Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Note Guarantee.

(i) Pursuant to Section 10.02 of the Indenture, after giving effect to all other contingent and fixed liabilities that are relevant under any applicable Bankruptcy Law or fraudulent conveyance laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of Holdings or any other Note Guarantor in respect of the obligations of Holdings or such other Note Guarantor under Article 10 or Article 11 of the Indenture, this new Note Guarantee shall be limited to the maximum amount permissible such that the obligations of such Guaranteeing Subsidiary under this Note Guarantee will not

 

D-2


being voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

(j) This Note Guarantee shall be a continuing guarantee and shall (1) remain in full force and effect until payment in full of all the applicable obligations guaranteed hereby; (2) subject to Section 10.06 of the Indenture, be binding upon the Guaranteeing Subsidiary and its successors; and (3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

(k) This Note Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer, Holdings or any Note Guarantor for liquidation or reorganization, should the Issuer, Holdings or any Note Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s, Holdings’ or any Note Guarantor’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, the Holdings Guarantee or Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(l) In case any provision of this Note Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(m) This Note Guarantee shall be a general unsecured senior obligation of such Guaranteeing Subsidiary, ranking pari passu with all existing and future Senior Pari Passu Indebtedness of the Guaranteeing Subsidiary, if any.

(n) Each payment to be made by the Guaranteeing Subsidiary in respect of this Note Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

(3) Execution and Delivery . The Guaranteeing Subsidiary agrees that the Note Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Note Guarantee on the Notes.

(4) Merger, Consolidation or Sale of All or Substantially All Assets .

(a) Except as otherwise provided in Section 5.01(b) of the Indenture, the Guaranteeing Subsidiary may not, and the Issuer will not permit the Guaranteeing Subsidiary to, consolidate, amalgamate or merge with or into or wind up into (whether or not the Guaranteeing Subsidiary is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(i) either (a) such Guaranteeing Subsidiary is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Guaranteeing Subsidiary) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Guaranteeing

 

D-3


Subsidiary or such Person, as the case may be, being herein called the “ Successor Note Guarantor ”) and the Successor Note Guarantor (if other than the Guaranteeing Subsidiary) expressly assumes all the obligations of the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s applicable Note Guarantee pursuant to a supplemental indenture or other documents or instruments in form reasonably satisfactory to the Trustee, or (b) such sale or disposition or consolidation, amalgamation or merger is not in violation of Section 4.10 of the Indenture;

(ii) the Successor Note Guarantor (if other than the Guaranteeing Subsidiary) shall have delivered or caused to be delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with the Indenture; and

(iii) immediately after such transaction, no Default or Event of Default exists.

(b) Except as otherwise provided in the Indenture, the Successor Note Guarantor (if other than the Guaranteeing Subsidiary) will succeed to, and be substituted for, the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s applicable Note Guarantee, and the Guaranteeing Subsidiary will automatically be released and discharged from its obligations under the Indenture and the Guaranteeing Subsidiary’s applicable Note Guarantee, but in the case of a lease of all or substantially all of its assets, the Guaranteeing Subsidiary will not be released from its obligations under the Note Guarantee. Notwithstanding the foregoing, (1) a Guaranteeing Subsidiary may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating the Guaranteeing Subsidiary in another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness, Preferred Stock and Disqualified Stock of the Guaranteeing Subsidiary is not increased thereby and (2) a Guaranteeing Subsidiary may merge, amalgamate or consolidate with another Guaranteeing Subsidiary or the Issuer.

(c) In addition, notwithstanding the foregoing, the Guaranteeing Subsidiary may consolidate, amalgamate or merge with or into or wind up into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a “ Transfer ”) to (x) the Issuer or any Note Guarantor or (y) any Restricted Subsidiary that is not a Note Guarantor; provided that at the time of each such Transfer pursuant to clause (y) the aggregate amount of all such Transfers since the Original Issue Date shall not exceed the greater of $625.0 million and 5.0% of Total Assets after giving effect to each such Transfer and including all Transfers of the Guaranteeing Subsidiary and the Note Guarantors occurring from and after the Original Issue Date (excluding Transfers in connection with the Merger Transactions).

(5) Releases .

The Note Guarantee of the Guaranteeing Subsidiary shall be automatically and unconditionally released and discharged, and no further action by the Guaranteeing Subsidiary, the Issuer or the Trustee is required for the release of the Guaranteeing Subsidiary’s Guarantee, upon:

(1) (a) the sale, disposition or other transfer (including through merger or consolidation) of the Capital Stock (including any sale, disposition or other transfer following which the Guaranteeing Subsidiary is no longer a Restricted Subsidiary), of the Guaranteeing Subsidiary if such sale, disposition or other transfer is made in compliance with the applicable provisions of the Indenture;

(b) the Issuer designating the Guaranteeing Subsidiary to be an Unrestricted Subsidiary in accordance with the provisions set forth under Section 4.07 of the Indenture and the definition of “Unrestricted Subsidiary”;

 

D-4


(c) the release or discharge of such Restricted Subsidiary from (x) its guarantee of Indebtedness under the Credit Agreement (including by reason of the termination of the Credit Agreement) and/or (y) the guarantee of Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer or such Restricted Subsidiary or the repayment of the Indebtedness or Disqualified Stock (except in each case a discharge or release by or as a result of payment under such guarantee) that resulted in the obligation to guarantee the Notes, in the case of each of clauses (x) and (y) if the Guaranteeing Subsidiary would not then otherwise be required to guarantee the Notes pursuant to the Indenture; provided , that if such Person has incurred any Indebtedness or issued any Disqualified Stock in reliance on its status as a Note Guarantor under Section 4.09 of the Indenture, the Guaranteeing Subsidiary’s obligations under such Indebtedness or Disqualified Stock, as the case may be, so Incurred are satisfied in full and discharged or are otherwise permitted to be Incurred under Section 4.09 of the Indenture; or

(d) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 of the Indenture or the Issuer’s obligations under the Indenture being discharged in accordance with the terms of the Indenture; and

(2) in the case of clause (1)(a) above, the release of the Guaranteeing Subsidiary from its guarantee, if any, of, and all pledges and security, if any, granted in connection with, the Credit Agreement and any other Indebtedness of the Issuer or any Restricted Subsidiary.

In addition, a Note Guarantee will be automatically released upon the Guaranteeing Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest securing Bank Indebtedness or other exercise of remedies in respect thereof.

(6) No Recourse Against Others . No director, officer, employee, manager, incorporator or holder of any Equity Interests of the Guaranteeing Subsidiary or any direct or indirect parent, as such, shall have any liability for any obligations of the Issuer or the Note Guarantors under the Notes, the Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(7) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(8) Counterparts/Originals . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

(9) Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction hereof.

(10) The Trustee . The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary.

(11) Subrogation . The Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by the Guaranteeing Subsidiary pursuant to the provisions of Section 2 hereof and Section 10.01 of the Indenture; provided that, if an Event of Default has occurred and is continuing, the Guaranteeing Subsidiary shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under the Indenture or the Notes shall have been paid in full.

 

D-5


(12) Benefits Acknowledged . The Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. The Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Note Guarantee are knowingly made in contemplation of such benefits.

(13) Successors . All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in Section 2(k) hereof or elsewhere in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

 

D-6


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

 

[GUARANTEEING SUBSIDIARY]

By: 

   
  Name:
  Title:
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

By: 

   
  Name:
  Title:

 

D-7

Exhibit 4.62

 

 

 

INDENTURE

Dated as of January 5, 2011

Among

REALOGY CORPORATION,

DOMUS HOLDINGS CORP.,

THE NOTE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Trustee

13.375% SENIOR SUBORDINATED NOTES DUE 2018

 

 

 


CROSS-REFERENCE TABLE*

 

TIA Section

   Indenture Section

310(a)(1)

   7.10

      (a)(2)

   7.10

      (a)(3)

   N.A.

      (a)(4)

   N.A.

      (a)(5)

   7.10

      (b)

   7.10

      (c)

   N.A.

311(a)

   7.11

      (b)

   7.11

      (c)

   N.A.

312(a)

   2.05

      (b)

   16.03

      (c)

   16.03

313(a)

   7.06

      (b)(1)

   N.A.

      (b)(2)

   7.06;7.07

       (c)

   7.06;16.02

      (d)

   7.06

314(a)

   4.03; 4.04; 16.02; 16.05

      (b)

   N.A.

      (c)(1)

   16.04

      (c)(2)

   16.04

      (c)(3)

   N.A.

      (d)

   N.A.

      (e)

   16.05

      (f)

   N.A.

315(a)

   7.01

      (b)

   7.05;16.02

      (c)

   7.01

      (d)

   7.01

      (e)

   6.14

316(a)(last sentence)

   2.09

      (a)(1)(A)

   6.05

      (a)(1)(B)

   6.04

      (a)(2)

   N.A.

      (b)

   6.07

      (c)

   2.12;9.04

317(a)(1)

   6.08

      (a)(2)

   6.12

      (b)

   2.04

318(a)

   16.01

      (b)

   N.A.

      (c)

   16.01

N.A. means not applicable.

* This Cross-Reference Table is not part of the Indenture.


TABLE OF CONTENTS

 

     Page  

ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE

     1   

Section 1.01.    Definitions

     1   

Section 1.02.    Other Definitions

     47   

Section 1.03.    Incorporation by Reference of TIA

     49   

Section 1.04.    Rules of Construction

     50   

Section 1.05.    Acts of Holders

     50   

ARTICLE 2 THE NOTES

     52   

Section 2.01.    Form and Dating; Terms

     52   

Section 2.02.    Execution and Authentication

     52   

Section 2.03.    Registrar and Paying Agent

     53   

Section 2.04.    Paying Agent to Hold Money in Trust

     53   

Section 2.05.    Holder Lists

     53   

Section 2.06.    Transfer and Exchange

     54   

Section 2.07.    Replacement Notes

     55   

Section 2.08.    Outstanding Notes

     55   

Section 2.09.    Treasury Notes

     55   

Section 2.10.    Temporary Notes

     56   

Section 2.11.    Cancellation

     56   

Section 2.12.    Defaulted Interest

     56   

Section 2.13.    CUSIP Numbers

     57   

Section 2.14.    Calculation of Principal Amount of Notes

     57   

ARTICLE 3 REDEMPTION

     57   

Section 3.01.    Notices to Trustee

     57   

Section 3.02.    Selection of Notes to Be Redeemed or Purchased

     57   

Section 3.03.    Notice of Redemption

     58   

Section 3.04.    Effect of Notice of Redemption

     59   

Section 3.05.    Deposit of Redemption or Purchase Price

     59   

Section 3.06.    Notes Redeemed or Purchased in Part

     59   

Section 3.07.    Optional Redemption

     59   

Section 3.08.    Mandatory Redemption

     60   

Section 3.09.    Offers to Repurchase by Application of Excess Proceeds

     60   

ARTICLE 4 COVENANTS

     62   

Section 4.01.    Payment of Notes

     62   

Section 4.02.    Maintenance of Office or Agency

     63   

Section 4.03.    Reports and Other Information

     63   

Section 4.04.    Compliance Certificate

     64   

Section 4.05.    Taxes

     65   

Section 4.06.    Stay, Extension and Usury Laws

     65   

Section 4.07.    Limitation on Restricted Payments

     65   

Section 4.08.    Dividend and Other Payment Restrictions Affecting Subsidiaries

     71   

 

-i-


     Page  

Section 4.09.    Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock

     73   

Section 4.10.     Asset Sales

     79   

Section 4.11.    Transactions with Affiliates

     81   

Section 4.12.    Liens

     84   

Section 4.13.    Corporate Existence

     84   

Section 4.14.    Offer to Repurchase Upon Change of Control

     84   

Section 4.15.    Future Note Guarantor

     86   

Section 4.16.    Limitation on Repayments of Existing Notes

     87   

Section 4.17.    Limitation on Other Senior Subordinated Indebtedness

     87   

Section 4.18.    Suspension of Certain Covenant

     87   

ARTICLE 5 SUCCESSORS

     88   

Section 5.01.    Merger, Amalgamation Consolidation or Sale of All or Substantially All Assets

     88   

Section 5.02.    Successor Entity Substituted

     91   

ARTICLE 6 DEFAULTS AND REMEDIES

     91   

Section 6.01.    Events of Default

     91   

Section 6.02.    Acceleration

     93   

Section 6.03.    Other Remedies

     94   

Section 6.04.    Waiver of Past Defaults

     94   

Section 6.05.    Control by Majority

     94   

Section 6.06.    Limitation on Suits

     94   

Section 6.07.    Rights of Holders of Notes to Receive Payment

     95   

Section 6.08.    Collection Suit by Trustee

     95   

Section 6.09.    Restoration of Rights and Remedies

     95   

Section 6.10.    Rights and Remedies Cumulative

     95   

Section 6.11.    Delay or Omission Not Waiver

     95   

Section 6.12.    Trustee May File Proofs of Claim

     96   

Section 6.13.    Priorities

     96   

Section 6.14.    Undertaking for Costs

     96   

ARTICLE 7 TRUSTEE

     97   

Section 7.01.    Duties of Trustee

     97   

Section 7.02.    Rights of Trustee

     98   

Section 7.03.    Individual Rights of Trustee

     99   

Section 7.04.    Trustee’s Disclaimer

     99   

Section 7.05.    Notice of Defaults

     99   

Section 7.06.    Reports by Trustee to Holders of the Notes

     100   

Section 7.07.    Compensation and Indemnity

     100   

Section 7.08.    Replacement of Trustee

     101   

Section 7.09.    Successor Trustee by Merger, etc.

     102   

Section 7.10.    Eligibility; Disqualification

     102   

Section 7.11.    Preferential Collection of Claims Against the Issuer

     102   

 

-ii-


     Page  

ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE

     102   

Section 8.01.    Option to Effect Legal Defeasance or Covenant Defeasance

     102   

Section 8.02.    Legal Defeasance and Discharge

     102   

Section 8.03.    Covenant Defeasance

     103   

Section 8.04.    Conditions to Legal or Covenant Defeasance

     103   

Section 8.05.    Deposited Money and Government Obligations to Be Held in Trust; Other Miscellaneous Provisions

     105   

Section 8.06.    Repayment to the Issuer

     105   

Section 8.07.    Reinstatement

     105   

ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER

     106   

Section 9.01.    Without Consent of Holders of Notes

     106   

Section 9.02.    With Consent of Holders of Notes

     107   

Section 9.03.    Compliance with TIA

     108   

Section 9.04.    Revocation and Effect of Consents

     109   

Section 9.05.    Notation on or Exchange of Notes

     109   

Section 9.06.    Trustee to Sign Amendments, etc.

     109   

ARTICLE 10 SUBORDINATION

     109   

Section 10.01.    Agreement To Subordinate

     109   

Section 10.02.    Liquidation, Dissolution, Bankruptcy

     110   

Section 10.03.    Default on Senior Indebtedness of the Issuer

     110   

Section 10.04.    Acceleration of Payment of Notes

     111   

Section 10.05.    When Distribution Must Be Paid Over

     112   

Section 10.06.    Subrogation

     112   

Section 10.07.    Relative Rights

     112   

Section 10.08.    Subordination May Not Be Impaired by the Issuer

     112   

Section 10.09.    Rights of Trustee and Paying Agent

     112   

Section 10.10.    Distribution or Notice to Representative

     113   

Section 10.11.    Article 10 Not To Prevent Events of Default or Limit Right To Accelerate

     113   

Section 10.12.    Trust Moneys Not Subordinated

     113   

Section 10.13.    Trustee Entitled To Rely

     113   

Section 10.14.    Trustee To Effectuate Subordination

     114   

Section 10.15.    Trustee Not Fiduciary for Holders of Senior Indebtedness of the Issuer

     114   

Section 10.16.    Reliance by Holders of Senior Indebtedness of the Issuer on Subordination Provisions

     114   

ARTICLE 11 NOTE GUARANTEES

     115   

Section 11.01.    Note Guarantee

     115   

Section 11.02.    Limitation on Note Guarantor Liability

     116   

Section 11.03.    Execution and Delivery

     117   

Section 11.04.    Subrogation

     117   

Section 11.05.    Benefits Acknowledged

     117   

Section 11.06.    Release of Note Guarantees

     117   

Section 11.07.    Securitization Acknowledgement

     118   

 

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     Page  

ARTICLE 12 HOLDINGS GUARANTEE

     120   

Section 12.01.    Holdings Guarantee

     120   

Section 12.02.    Limitation on Holdings Liability

     122   

Section 12.03.    Execution and Delivery

     122   

Section 12.04.    Subrogation

     122   

Section 12.05.    Benefits Acknowledged

     123   

Section 12.06.    Release of Holdings Guarantee

     123   

ARTICLE 13 SUBORDINATION OF NOTE GUARANTEES

     123   

Section 13.01.    Agreement To Subordinate

     123   

Section 13.02.    Liquidation, Dissolution, Bankruptcy

     123   

Section 13.03.    Default on Senior Indebtedness of a Note Guarantor

     124   

Section 13.04.    Demand for Payment

     125   

Section 13.05.    When Distribution Must Be Paid Over

     125   

Section 13.06.    Subrogation

     125   

Section 13.07.    Relative Rights

     125   

Section 13.08.    Subordination May Not Be Impaired by a Note Guarantor

     126   

Section 13.09.    Rights of Trustee and Paying Agent

     126   

Section 13.10.    Distribution or Notice to Representative

     127   

Section 13.11.    Article 13 Not To Prevent Events of Default or Limit Right To Demand Payment

     127   

Section 13.12.    Trust Moneys Not Subordinated

     127   

Section 13.13.    Trustee Entitled To Rely

     127   

Section 13.14.    Trustee To Effectuate Subordination

     127   

Section 13.15.    Trustee Not Fiduciary for Holders of Senior Indebtedness of Note Guarantors

     128   

Section 13.16.    Reliance by Holders of Senior Indebtedness of a Note Guarantor on Subordination Provisions

     128   

ARTICLE 14 SUBORDINATION OF HOLDINGS GUARANTEE

     128   

Section 14.01.    Agreement To Subordinate

     128   

Section 14.02.    Liquidation, Dissolution, Bankruptcy

     129   

Section 14.03.    Default on Holdings Senior Indebtedness

     129   

Section 14.04.    Demand for Payment

     130   

Section 14.05.    When Distribution Must Be Paid Over

     130   

Section 14.06.    Subrogation

     131   

Section 14.07.    Relative Rights

     131   

Section 14.08.    Subordination May Not Be Impaired by Holdings

     131   

Section 14.09.    Rights of Trustee and Paying Agent

     131   

Section 14.10.    Distribution or Notice to Holdings Representative

     132   

Section 14.11.    Article 14 Not To Prevent Events of Default or Limit Right To Demand Payment

     132   

Section 14.12.    Trust Moneys Not Subordinated

     132   

Section 14.13.    Trustee Entitled To Rely

     132   

Section 14.14.    Trustee To Effectuate Subordination

     133   

Section 14.15.    Trustee Not Fiduciary for Holders of Holdings Senior Indebtedness

     133   

Section 14.16.    Reliance by Holders of Holdings Senior Indebtedness on Subordination Provisions

     133   

 

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     Page  

ARTICLE 15 SATISFACTION AND DISCHARGE

     133   

Section 15.01.    Satisfaction and Discharge

     133   

Section 15.02.    Application of Trust Money

     134   

ARTICLE 16 MISCELLANEOUS

     134   

Section 16.01.    TIA Controls

     134   

Section 16.02.    Notices

     135   

Section 16.03.    Communication by Holders of Notes with Other Holders of Notes

     136   

Section 16.04.    Certificate and Opinion as to Conditions Precedent

     136   

Section 16.05.    Statements Required in Certificate or Opinion

     136   

Section 16.06.    Rules by Trustee and Agents

     137   

Section 16.07.    No Personal Liability of Directors, Officers, Employees and Stockholders

     137   

Section 16.08.    Governing Law

     137   

Section 16.09.    Waiver of Jury Trial

     137   

Section 16.10.    Force Majeure

     137   

Section 16.11.    No Adverse Interpretation of Other Agreements

     137   

Section 16.12.    Successors

     137   

Section 16.13.    Severability

     138   

Section 16.14.    Counterpart Originals

     138   

Section 16.15.    Table of Contents, Headings, etc.

     138   

Section 16.16.    Qualification of Indenture

     138   

 

Appendix A

   Provisions Relating to Initial Notes, Additional Notes and Exchange Notes

Exhibit A

  

Form of Initial Note

Exhibit B

  

Form of Exchange Note

Exhibit C

  

Form of Transferee Letter of Representation

Exhibit D

  

Form of Supplemental Indenture to Be Delivered by Future Note Guarantors

 

-v-


INDENTURE, dated as of January 5, 2011, among Realogy Corporation, a Delaware corporation (the “ Issuer ”), Domus Holdings Corp., a Delaware corporation and the indirect parent of the Issuer (“Holdings”), the Note Guarantors (as defined herein) listed on the signature pages hereto and The Bank of New York Mellon Trust Company, N.A., as Trustee.

W I T N E S S E T H

WHEREAS, in connection with the Existing Notes Exchange Offer (as defined herein), the Issuer has duly authorized the creation of and issue of $10,282,000 aggregate principal amount of 13.375% Senior Subordinated Notes due 2018 (the “ Initial Notes ”); and

WHEREAS, the Issuer, Holdings and each of the Note Guarantors has duly authorized the execution and delivery of this Indenture.

NOW, THEREFORE, the Issuer, Holdings, the Note Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Notes.

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01.  Definitions.

Acquired Indebtedness ” means, with respect to any specified Person:

(1) Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging, consolidating or amalgamating with or into or becoming a Restricted Subsidiary of such specified Person, and

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

Additional Interest ” means all additional interest then owing pursuant to the Registration Rights Agreement.

Additional Notes ” means additional Notes (other than the Initial Notes and other than Exchange Notes for such Initial Notes) issued from time to time under this Indenture in accordance with Sections 2.01 and 4.09 hereof.

Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

Agent ” means any Registrar and Paying Agent.

Apple Ridge Documents ” means the Transfer and Servicing Agreement, dated as of April 25, 2000, as amended, by and among Apple Ridge Services Corporation, Cartus Corporation,


Cartus Financial Corporation, Apple Ridge Funding LLC and The Bank of New York Mellon (formerly known as The Bank of New York) (the “ Transfer and Servicing Agreement ”), the Receivables Purchase Agreement, dated as of April 25, 2000, as amended, by and between Cartus Financial Corporation and Apple Ridge Services Corporation (the “ Receivables Purchase Agreement ”), the Purchase Agreement, dated as of April 25, 2000, as amended, by and between Cartus Corporation and Cartus Financial Corporation (the “ Purchase Agreement ”), the Amended and Restated Note Purchase Agreement, dated as of April 10, 2007, as amended and restated as of July 6, 2007, by and among Apple Ridge Funding LLC, Cartus Corporation, Credit Agricole Corporate and Investment Bank, New York Branch (formerly known as Calyon New York Branch) and the Conduit Purchasers, Committed Purchasers and Managing Agents from time to time parties thereto, the Master Indenture, April 25, 2000, as amended, by and between Apple Ridge Funding LLC and The Bank of New York Mellon, the Amended and Restated Series 2007-1 Indenture Supplement, dated as of April 10, 2007, as amended and restated as of July 6, 2007, by and between Apple Ridge Funding LLC and The Bank of New York Mellon, the Performance Guaranty, dated as of May 12, 2006, as amended by the Fifth Omnibus Amendment dated as of April 10, 2007, by Realogy Corporation in favor of Apple Ridge Funding, LLC and Cartus Financial Corporation, and each other agreement or other document contemplated by or entered into in connection with and/or in replacement of the foregoing, each as amended, restated, refinanced, modified or supplemented on or prior to the Issue Date.

Applicable Insurance Regulatory Authority ” means, when used with respect to any Insurance Subsidiary, the insurance department or similar administrative authority or agency located in (x) the state or other jurisdiction in which such Insurance Subsidiary is domiciled or (y) to the extent asserting regulatory jurisdiction over such Insurance Subsidiary, the insurance department, authority or agency in each state or other jurisdiction in which such Insurance Subsidiary is licensed, and shall include any Federal insurance regulatory department, authority or agency that may be created in the future and that asserts regulatory jurisdiction over such Insurance Subsidiary.

Applicable Premium ” means, with respect to any Note on any applicable redemption date, the greater of:

(1) 1% of the then outstanding principal amount of the Note; and

(2) the excess of:

(a) the present value at such redemption date of (i) the redemption price of the Note, at April 15, 2013 (such redemption price being set forth in Section 3.07) plus (ii) all required interest payments due on the Note through April 15, 2013 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over

(b) the then outstanding principal amount of the Note.

Arbitrage Programs ” means Indebtedness and Investments relating to operational escrow accounts of NRT or Title Resource Group or any of their Restricted Subsidiaries.

Asset Sale ” means:

(1) the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of a Sale/Leaseback Transaction) of the Issuer or any Restricted Subsidiary (each referred to in this definition as a “disposition”) or

 

9


(2) the issuance or sale of Equity Interests (other than directors’ qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any Restricted Subsidiary (other than to the Issuer or another Restricted Subsidiary and other than the issuance of Preferred Stock of a Non-Guarantor Subsidiary issued in compliance with Section 4.09) (whether in a single transaction or a series of related transactions),

in each case other than:

(a) a disposition of Cash Equivalents or Investment Grade Securities or damaged, obsolete or worn out property or equipment in the ordinary course of business;

(b) the disposition of all or substantially all of the assets of the Issuer in a manner permitted pursuant to the provisions described under Section 5.01 hereof or any disposition that constitutes a Change of Control;

(c) any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 4.07;

(d) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary, which assets or Equity Interests so disposed or issued have an aggregate Fair Market Value of less than $25.0 million in any one transaction or series of related transactions;

(e) any disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary to the Issuer or by the Issuer or a Restricted Subsidiary to a Restricted Subsidiary;

(f) any exchange of assets (including a combination of assets and Cash Equivalents) for assets related to a Similar Business of comparable or greater market value or usefulness to the business of the Issuer and the Restricted Subsidiaries as a whole, as determined in good faith by the senior management or the Board of Directors of the Issuer;

(g) foreclosure on assets of the Issuer or any of the Restricted Subsidiaries;

(h) any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(i) the lease, assignment or sublease of any real or personal property in the ordinary course of business;

(j) any sale of inventory or other assets in the ordinary course of business;

(k) grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property or franchise rights;

(l) in the ordinary course of business, any swap of assets, or any lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing arrangements) of comparable or greater value or usefulness to the business of the Issuer and the Restricted Subsidiaries taken as a whole, as determined in good faith by senior management or the Board of Directors of the Issuer; provided, that any cash or Cash Equivalents received must be applied in accordance with Section 4.10;

 

10


(m) any financing transaction with respect to property built or acquired by the Issuer or any Restricted Subsidiary after the Issue Date, including any Sale/Leaseback Transaction or asset securitization permitted by this Indenture;

(n) any surrender or waiver of contract rights or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;

(o) a sale or other transfer of Securitization Assets or interests therein pursuant to a Permitted Securitization Financing;

(p) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and not as part of a Permitted Securitization Financing;

(q) dispositions in connection with Permitted Liens or Liens to secure the Notes in accordance with the terms of this Indenture;

(r) sales or other dispositions of Equity Interests in Existing Joint Ventures; and

(s) any disposition of Investments in connection with the Arbitrage Programs.

Bank Indebtedness ” means any and all amounts payable under or in respect of the Credit Agreement and the other Credit Agreement Documents as amended, restated, supplemented, waived, replaced, restructured, repaid, refunded, refinanced or otherwise modified from time to time (including after termination of the Credit Agreement), including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Issuer whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof.

Bankruptcy Law ” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

beneficial ownership ” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as such term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire, whether such right is currently exercisable or is exercisable only after the passage of time.

Board of Directors ” means, as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.

Business Day ” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or the city in which the Trustee’s principal office is located.

Capital Stock ” means:

(1) in the case of a corporation or a company, corporate stock or shares;

 

11


(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

Capitalized Lease Obligation ” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

Cash Equivalents ” means:

(1) U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business;

(2) securities issued or directly and fully guaranteed or insured by the U.S. government or any country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;

(3) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250.0 million and whose long-term debt is rated “A” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);

(4) repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5) commercial paper issued by a corporation (other than an Affiliate of the Issuer) rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency if both of the two named rating agencies cease publishing ratings of investments) and in each case maturing within one year after the date of acquisition;

(6) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency if both of the two named rating agencies cease publishing ratings of investments) in each case with maturities not exceeding two years from the date of acquisition;

(7) Indebtedness issued by Persons (other than the Permitted Holders or any of their Affiliates) with a rating of “A” or higher from S&P or “A-2” or higher from Moody’s (or

 

12


reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;

(8) investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above; and

(9) instruments equivalent to those referred to in clauses (1) through (8) above denominated in euros or any other foreign currency comparable in credit quality and tenor to those referred to above and commonly used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business conducted by any Subsidiary organized in such jurisdiction.

Cendant ” means Cendant Corporation, a Delaware corporation (now known as Avis Budget Group, Inc.).

Cendant Contingent Assets ” has the meaning assigned to “Cendant Contingent Asset” in the Separation and Distribution Agreement and shall also include any tax benefits and attributes allocated or inuring to the Issuer and its Subsidiaries under the Cendant Tax Sharing Agreement.

Cendant Contingent Liabilities ” has the meaning assigned to “Assumed Cendant Contingent Liabilities” in the Separation and Distribution Agreement and shall also include any liabilities that are related or attributable to or arising in connection with Taxes or Tax Returns (as each term is defined in the Cendant Tax Sharing Agreement).

Cendant Spin-Off ” means the distribution of all of the capital stock of the Issuer by Cendant to its stockholders and the transactions related thereto as described in that certain Information Statement of the Issuer dated July 13, 2006, as filed with the SEC.

Cendant Tax Sharing Agreement ” means the Tax Sharing Agreement, dated as of July 28, 2006, by and among Cendant, the Issuer, Wyndham Worldwide Corporation and Travelport Inc., as amended on or prior to the date of the Offering Memorandum.

Change of Control ” means the occurrence of any of the following:

(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of the Issuer and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or

(2) the Issuer becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of the Issuer or any direct or indirect parent of the Issuer. Notwithstanding the foregoing, a Specified Merger/Transfer Transaction shall not constitute a Change of Control.

Code ” means the Internal Revenue Code of 1986, as amended.

 

13


Consolidated Interest Expense ” means, with respect to any Person for any period, the sum, without duplication, of:

(1) consolidated interest expense of such Person and the Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount and bond premium, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations (provided, however, that if interest rate Hedging Obligations result in net benefits rather than costs, such benefits shall be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such net benefits are otherwise reflected in Consolidated Net Income) and excluding additional interest in respect of the Notes, amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and expensing of any bridge commitment or other financing fees); plus

(2) consolidated capitalized interest of such Person and the Restricted Subsidiaries for such period, whether paid or accrued; plus

(3) commissions, discounts, yield and other fees and charges Incurred in connection with any Permitted Securitization Financing to the extent such amounts have not been deducted in the presentation of consolidated revenues of such Person; minus

(4) interest income for such period.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

Consolidated Leverage Ratio ” means, with respect to any Person at any date, the ratio of (i) the aggregate amount of all outstanding Indebtedness and Disqualified Stock of such Person and its Restricted Subsidiaries and Preferred Stock of Non-Guarantor Subsidiaries of such Person as of such date (determined on a consolidated basis in accordance with GAAP) less the amount of cash and Cash Equivalents (other than cash and Cash Equivalents of Special Purpose Securitization Subsidiaries) in excess of any Restricted Cash that would be stated on the balance sheet of such Person and its Restricted Subsidiaries as of such date of determination to (ii) EBITDA of such Person for the four full fiscal quarters for which internal financial statements are available immediately preceding such date. In the event that the Issuer or any of the Restricted Subsidiaries Incurs or redeems any Indebtedness or issues or redeems Disqualified Stock or any Non-Guarantor Subsidiary issues or redeems Preferred Stock subsequent to the commencement of the period for which the Consolidated Leverage Ratio is being calculated but on or prior to or simultaneously with the event for which the calculation of the Consolidated Leverage Ratio is made (the “Consolidated Leverage Calculation Date”), then the Consolidated Leverage Ratio shall be calculated giving pro forma effect to such Incurrence or such issuance or redemption of Disqualified Stock or Preferred Stock or redemption of Indebtedness, as if the same had occurred at the beginning of the applicable four-quarter period; provided that the Issuer may elect, pursuant to an Officer’s Certificate delivered to the Trustee, that all or any portion of the commitment under any Indebtedness as being Incurred at the time such commitment is entered into and any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time. Notwithstanding the foregoing and for purposes of this calculation, the aggregate principal amount of Indebtedness shall be calculated without giving effect to purchase accounting adjustments.

 

14


For purposes of making the computation referred to above, Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to a company, operating unit, division, segment, business, group of assets or lines of business, that the Issuer or any of the Restricted Subsidiaries has made after the Issue Date and during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Consolidated Leverage Calculation Date (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation, in each case with respect to an operating unit, division, segment, business, group of assets or lines of business that would have required adjustment pursuant to this definition, then the Consolidated Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period.

For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer.

Consolidated Net Income ” means, with respect to any Person for any period, without duplication, the aggregate of the Net Income of such Person and the Restricted Subsidiaries for such period, on a consolidated basis; provided, however, that:

(1) any net after-tax extraordinary, nonrecurring or unusual gains or losses or income, expenses or charges (less all fees and expenses relating thereto), including, without limitation, (i) severance expenses, relocation or other restructuring expenses, fees, expenses or charges related to plant, facility, store and office closures, consolidations, downsizings and/or shutdowns (including future lease commitments and contract termination costs with respect thereto), (ii) fees, expenses or charges Incurred in connection with the Cendant Spin-Off, (iii) expenses or charges related to curtailments or modifications to pension or other post-employment benefit plans, (iv) any fees, expenses or charges related to any Equity Offering, Permitted Investment, acquisition (including integration costs) or Indebtedness permitted to be Incurred by this Indenture (in each case, whether or not successful), including any such fees, expenses, tender premiums, charges or change in control payments made under the Merger Documents or otherwise related to the Merger Transactions (including any transition-related expenses Incurred prior to, on or after the Original Issue Date) and (v) any fees, expenses or charges related to the Existing Notes Exchange Offers, in each case, shall be excluded;

(2) any increase in amortization or depreciation or any one-time non-cash charges or increases or reductions in Net Income, in each case resulting from purchase accounting in connection with the Merger Transactions or any acquisition that is consummated after the Original Issue Date shall be excluded (including any acquisition by a third party, directly or indirectly, of the Issuer);

(3) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;

 

15


(4) any net after-tax income or loss from abandoned, closed or discontinued operations and any net after-tax gains or losses on disposal of abandoned, closed or discontinued operations shall be excluded;

(5) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by senior management or the Board of Directors of the Issuer) shall be excluded;

(6) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of Indebtedness, Hedging Obligations and other derivative instruments shall be excluded;

(7) except with respect to joint ventures related to Title Resource Group and the Issuer’s mortgage origination business (whether conducted through PHH Home Loans, LLC or other joint ventures of the Issuer or its Restricted Subsidiaries), the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;

(8) solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of Cumulative Credit, the Net Income for such period of any Restricted Subsidiary (other than any Note Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;

(9) an amount equal to the amount of Tax Distributions actually made to any parent of such Person in respect of such period in accordance with Section 4.07(b)(12) shall be included as though such amounts had been paid as income taxes directly by such Person for such period;

(10) any non-cash impairment charges or asset write-offs and amortization of intangibles in each case arising pursuant to the application of GAAP shall be excluded;

(11) any (a) severance or relocation costs or expenses, (b) one-time non-cash compensation charges, (c) costs and expenses related to employment of terminated employees, (d) costs or expenses realized in connection with, resulting from or in anticipation of the Merger Transactions or (e) non-cash costs or expenses realized in connection with or resulting from employee benefit plans or post-employment benefit plans (including long-term incentive plans), stock appreciation or similar rights, stock options or other rights of officers, directors and employees, in each case of such Person or any of the Restricted Subsidiaries, shall be excluded;

(12) accruals and reserves that are established or adjusted within 12 months of the Original Issue Date, in each case, related to or as a result of the Merger Transactions and that are

 

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so required to be established or adjusted in accordance with GAAP, and changes in accruals and reserves as a result of the adoption or modification of accounting policies in connection with the Merger Transactions, shall be excluded;

(13) (a)(i) the non-cash portion of “straight-line” rent expense shall be excluded and (ii) the cash portion of “straight-line” rent expense which exceeds the amount expensed in respect of such rent expense shall be included and (b) non-cash gains, losses, income and expenses resulting from fair value accounting required by Accounting Standards Codification 815 (or successor rule) shall be excluded;

(14) unrealized gains and losses relating to hedging transactions and mark-to-market of Indebtedness denominated in foreign currencies resulting from the applications of Accounting Standards Codification 830 (or successor rule) shall be excluded;

(15) any currency translation gains and losses related to currency reimbursements of Indebtedness, and any net loss or gain resulting from Hedging Obligations for currency exchange risk, shall be excluded;

(16) solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of Cumulative Credit, the difference, if positive, of the Consolidated Taxes of the Issuer calculated in accordance with GAAP and the actual Consolidated Taxes paid in cash by the Issuer during any Reference Period shall be included;

(17) any expenses or income (including increases or reversals of reserves) relating to the Cendant Contingent Liabilities shall be excluded; and

(18) any income or other economic benefits accruing to the Issuer and its Subsidiaries pursuant to the Cendant Contingent Assets, whether in the form of cash or tax benefits shall be excluded, provided any economic benefits accruing to the Issuer and its Restricted Subsidiaries pursuant to assets out of or arising from payments to be received under Article III of the Tax Receivable Agreement dated as of February 22, 2005 by and among Cendant Corporation, Cendant Mobility Services Corporation and Wright Express Corporation shall be included.

Notwithstanding the foregoing, for the purpose of Section 4.07 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries or a Restricted Subsidiary to the extent such dividends, repayments, advances or transfers increase the amount of Restricted Payments permitted under Section 4.07 pursuant to clauses (5) and (6) of the definition of Cumulative Credit.

Consolidated Non-cash Charges ” means, with respect to any Person for any period, the aggregate depreciation, amortization and other non-cash expenses, including any deferred financing fees, write-offs or write-downs and amortization of expenses attributable to pending real estate brokerage transactions and property listings of Persons or operations acquired by such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP (provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA to such extent paid, and excluding amortization of a prepaid cash item that was paid in a prior period).

Consolidated Taxes ” means, with respect to any Person for any period, the provision for taxes based on income, profits or capital, including, without limitation, state, franchise and similar taxes,

 

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of such Person for such period on a consolidated basis and any Tax Distributions taken into account in calculating Consolidated Net Income.

Contingent Obligations ” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:

(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor;

(2) to advance or supply funds:

(a) for the purchase or payment of any such primary obligation; or

(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

Convertible Notes ” means, collectively, the Issuer’s 11.00% Series A Convertible Notes due 2018, 11.00% Series B Convertible Notes due 2018 and 11.00% Series C Convertible Notes due 2018.

Convertible Note Guarantee ” means any guarantee of the obligations of the Issuer under the Convertible Notes and the Convertible Note Indenture by any Person in accordance with the provisions of the Convertible Note Indenture.

Convertible Note Indenture ” means the indenture, dated as of the Issue Date, among the Issuer, Holdings, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, governing the Convertible Notes, as amended, supplemented or modified from time to time.

Corporate Trust Office of the Trustee ” means the designated office of the Trustee at which at any time its corporate trust business shall be administered, which office at the dated hereof is located at 525 William Penn Place, 38th Floor, Pittsburgh, PA 15259, Attention: Corporate Trust Administration, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

Credit Agreement ” means, collectively, (i) the credit agreement dated as of April 10, 2007, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof, among the Issuer, Domus Intermediate Holdings Corp., a Delaware limited liability company and the parent of the Issuer, as guarantor, the other guarantors named therein, the financial institutions named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent, and (ii) whether or

 

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not the credit agreement referred to in clause (i) remains outstanding, if designated by the Issuer to be included in the definition of “Credit Agreement,” one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, Permitted Securitization Financings (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers, guarantors or issuers or lenders or group of lenders, and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

Credit Agreement Documents ” means the collective reference to the Credit Agreement, any notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time.

Cumulative Credit ” means the sum of (without duplication):

(1) 50% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period, the “Reference Period”) from April 1, 2007 to the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit); provided, however that, to the extent the Consolidated Leverage Ratio of the Issuer on a pro forma basis as if the Restricted Payment had been made and any Indebtedness Incurred on such date had been Incurred would have been less than 3.0 to 1.0 and the Consolidated Net Income of the Issuer is positive, then 75% of the Consolidated Net Income of the Issuer for the aforementioned period shall be included pursuant to this clause (1), plus

(2) 100% of the aggregate net proceeds, including cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash, received by the Issuer after the Original Issue Date (other than net proceeds to the extent such net proceeds have been used to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 4.09(b)(19)) from the issue or sale of Equity Interests of the Issuer (excluding, without duplication, (i) Refunding Capital Stock, Designated Preferred Stock, Excluded Contributions and Disqualified Stock and (ii) any net cash proceeds of Equity Offerings to the extent used to redeem Notes in compliance with Section 3.07), including Equity Interests issued upon conversion of Indebtedness or Disqualified Stock or upon exercise of warrants or options (other than an issuance or sale to a Restricted Subsidiary of the Issuer), plus

(3) 100% of the aggregate amount of contributions to the capital of the Issuer received in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash received after the Original Issue Date (other than Refunding Capital Stock, Designated Preferred Stock, Excluded Contributions, Disqualified Stock and contributions to the extent such contributions have been used to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 4.09(b)(19)), plus

(4) the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of the Issuer or any Restricted Subsidiary issued after the Original Issue Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged

 

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for Equity Interests in the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer (provided that such Indebtedness or Disqualified Stock is retired or extinguished), plus

(5) 100% of the aggregate amount received by the Issuer or any Restricted Subsidiary in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash received by the Issuer or any Restricted Subsidiary from:

(A) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of Restricted Investments made by the Issuer and the Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from the Issuer and the Restricted Subsidiaries by any Person (other than the Issuer or any of the Restricted Subsidiaries) and from repayments of loans or advances (including the release of any guarantee that constituted a Restricted Investment when made) that constituted Restricted Investments (other than, in each case, to the extent that the Restricted Investment was made pursuant to clause (7) or (10) of Section 4.07(b)),

(B) the sale (other than to the Issuer or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary (other than an Unrestricted Subsidiary to the extent the investments in such Unrestricted Subsidiary was made by the Issuer or a Restricted Subsidiary pursuant to clause (7) or (10) of Section 4.07(b) or to the extent such Investment constituted a Permitted Investment), or

(C) a distribution or dividend from an Unrestricted Subsidiary, plus

(6) in the event any Unrestricted Subsidiary has been re-designated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary, the Fair Market Value (as determined in accordance with the next succeeding sentence) of the Investment of the Issuer in such Unrestricted Subsidiary at the time of such re-designation, combination or transfer (or of the assets transferred or conveyed, as applicable), after taking into account any Indebtedness associated with the Unrestricted Subsidiary so designated or combined or any Indebtedness associated with the assets so transferred or conveyed (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to clause (7) or (10) of Section 4.07(b) or constituted a Permitted Investment).

The Fair Market Value of property, other than cash, covered by clauses (2), (3), (5) and (6) of this definition of “Cumulative Credit” shall be determined in good faith by the Issuer, and

(1) in the case of property with a Fair Market Value in excess of $30.0 million, shall be set forth in an Officer’s Certificate or

(2) in the case of property with a Fair Market Value in excess of $60.0 million, shall be set forth in a resolution approved by at least a majority of the Board of Directors of the Issuer.

Custodian ” means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.

Dealer Managers ” means J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC and Goldman, Sachs & Co.

 

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Default ” means any event which is, or after notice or passage of time or both would be, an Event of Default.

Definitive Note ” means a certificated Initial Note, Additional Note or Exchange Note (bearing the Restricted Notes Legend if the transfer of such Note is restricted by applicable law) that does not include the Global Notes Legend.

Delayed Draw Term Lender ” shall mean a lender under the Credit Agreement with a Delayed Draw Term Loan Commitment or an outstanding Delayed Draw Term Loan.

Delayed Draw Term Loan ” shall mean the term loan made by one or more Delayed Draw Term Lenders pursuant to the terms of the Credit Agreement if and only to the extent that (i) such term loan was permitted under the Existing Indentures as in effect immediately prior to the Issue Date as “Refinancing Indebtedness” (as defined therein) in respect of Secured Indebtedness of the Issuer and its Restricted Subsidiaries that was existing on the Original Issue Date, (ii) such refinanced Secured Indebtedness was permitted under the Existing Indentures on the Original Issue Date under clause 4.09(b)(3) of each of the Existing Indentures and was not outstanding under the Credit Agreement as of the Original Issue Date and (iii) the aggregate principal amount of all such Delayed Draw Term Loans does not exceed $1.2 billion.

Delayed Draw Term Loan Commitment ” shall mean, with respect to each Delayed Draw Term Lender, the commitment of such lender to make Delayed Draw Term Loans to the Issuer after the closing date of the Credit Agreement in accordance with the terms thereof.

Depositary ” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

Designated Non-cash Consideration ” means the Fair Market Value of non-cash consideration received by the Issuer or one of the Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate, setting forth the basis of such valuation, executed by the principal financial officer of the Issuer, less the amount of Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.

Designated Preferred Stock ” means Preferred Stock of the Issuer or any direct or indirect parent of the Issuer (in each case other than Disqualified Stock), that is issued for cash (other than to the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in the definition of “Cumulative Credit”.

Designated Senior Indebtedness ” means, with respect to the Issuer or a Note Guarantor:

(1) the Bank Indebtedness (to the extent such Bank Indebtedness constitutes Senior Indebtedness);

(2) the New Senior Notes;

(3) the Existing Senior Notes; and

 

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(4) any other Senior Indebtedness of the Issuer or such Note Guarantor that, at the date of determination, has an aggregate principal amount outstanding of, or under which, at the date of determination, the holders thereof are committed to lend up to, at least $25.0 million and is specifically designated by the Issuer or such Note Guarantor in the instrument evidencing or governing such Senior Indebtedness as “Designated Senior Indebtedness” for purposes of this Indenture.

Disqualified Stock ” means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable, putable or exchangeable), or upon the happening of any event:

(1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale; provided that the relevant asset sale or change of control provisions, taken as a whole, are no more favorable in any material respect to holders of such Capital Stock than the asset sale and change of control provisions applicable to the Notes and any purchase requirement triggered thereby may not become operative until compliance with the asset sale and change of control provisions applicable to the Notes (including the purchase of any Notes tendered pursuant thereto)),

(2) is convertible or exchangeable at the option of the holder thereof for Indebtedness or Disqualified Stock of such Person, or

(3) is redeemable at the option of the holder thereof, in whole or in part,

in each case prior to 91 days after the maturity date of the Notes; provided, however, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable at the option of the holder thereof or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided, further, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the Issuer or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Issuer in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; provided, further, that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

Domestic Subsidiary ” means a Restricted Subsidiary that is not a Foreign Subsidiary.

EBITDA ” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication, to the extent the same was deducted in calculating Consolidated Net Income:

(1) Consolidated Taxes; plus

(2) Consolidated Interest Expense; plus

(3) Consolidated Non-cash Charges; plus

(4) business optimization expenses and other restructuring charges, expenses or reserves (which, for the avoidance of doubt, shall include, without limitation, the effect of retention, systems establishment costs, curtailments or modifications to pension and post retirement employee benefit plans that result in pension settlement charges); provided that with respect to each business optimization expense or other restructuring charge or reserve, the Issuer shall have delivered to the Trustee an Officer’s Certificate specifying and quantifying such

 

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expense, charge or reserve and stating that such expense, charge or reserve is a business optimization expense or other restructuring charge or reserve, as the case may be; plus

(5) the amount of management, monitoring, consulting, transaction and advisory fees and related expenses paid to the Sponsors (or any accruals relating to such fees and related expenses) during such period pursuant to the terms of the agreements between the Sponsors and the Issuer and its Subsidiaries as in effect on the Original Issue Date; provided that such amount shall not exceed the amount permitted to be paid to the Sponsors pursuant to Section 4.11(b)(3); plus

(6) all add backs reflected in the financial presentation of “Adjusted EBITDA” in the amounts set forth in and as further described in the Offering Memorandum, but only to the extent such add backs occurred in the consecutive four quarter period used in the calculations of Fixed Charge Coverage Ratio, Consolidated Leverage Ratio and Secured Indebtedness Leverage Ratio, as the case may be; plus

(7) the amount of net cost savings projected by the Issuer in good faith to be realized as a result of specified actions taken or to be taken (calculated on a pro forma basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that (w) such cost savings are reasonably identifiable and factually supportable, (x) such actions have been taken or are to be taken and must be expected to be achieved on a run-rate basis within 90 days after the date of determination to take such action, (y) no cost savings shall be added pursuant to this clause (7) to the extent duplicative of any expenses or charges relating to such cost savings that are included in the calculations of Consolidated Net Income or EBITDA with respect to such period and (z) the aggregate amount of cost savings added pursuant to this clause (7) shall not exceed $75.0 million for any four consecutive quarter period (which adjustments may be incremental to pro forma adjustments made pursuant to the second paragraph of the definitions of “Fixed Charge Coverage Ratio”, “Consolidated Leverage Ratio” or “Secured Indebtedness Leverage Ratio”, as applicable); plus

(8) the amount of loss on any sale of Securitization Assets to a Special Purpose Securitization Subsidiary in connection with any Permitted Securitization Financing that is not shown as a liability on a consolidated balance sheet prepared in accordance with GAAP; plus

(9) storefront conversion costs relating to acquired stores by the Issuer or any Restricted Subsidiary; plus

(10) any costs or expenses incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or stockholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of the Issuer or a Note Guarantor solely to the extent that such net cash proceeds are excluded from the calculation of the Cumulative Credit;

less , without duplication,

(11) non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items for which cash was received in a prior period); less

 

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(12) all deductions reflected in the financial presentation of “Adjusted EBITDA” in the amounts set forth in and as further described in the Offering Memorandum, but only to the extent such deductions occurred in the consecutive four quarter period used in the calculations of Fixed Charge Coverage Ratio, Consolidated Leverage Ratio and Secured Indebtedness Leverage Ratio, as the case may be.

Equity Interests ” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

Equity Offering ” means any public or private sale after the Issue Date of common stock or Preferred Stock of the Issuer or any direct or indirect parent of the Issuer, as applicable (other than Disqualified Stock), other than:

(1) public offerings with respect to the Issuer’s or such direct or indirect parent’s common stock registered on Form S-4 or Form S-8;

(2) issuances to any Subsidiary of the Issuer; and

(3) any such public or private sale that constitutes an Excluded Contribution.

Event of Default ” has the meaning set forth under Section 6.01 hereof.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

Exchange Notes ” means the Notes issued in exchange for the Notes pursuant to the Registration Rights Agreement or similar agreement.

Exchange Offer ” has the meaning set forth in the Registration Rights Agreement.

Exchange Offer Registration Statement ” has the meaning set forth in the Registration Rights Agreement.

Excluded Contributions ” means the Cash Equivalents or other assets (valued at their Fair Market Value as determined in good faith by senior management or the Board of Directors of the Issuer) received by the Issuer after the Issue Date from:

(1) contributions to its common Capital Stock, and

(2) the sale (other than to a Subsidiary of the Issuer or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Issuer or any Subsidiary, to the extent such sale to such equity, stock option or other plan is financed by loans from or guaranteed by, the Issuer or any Restricted Subsidiary) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Issuer,

in each case designated as Excluded Contributions pursuant to an Officer’s Certificate executed by an Officer of the Issuer on or promptly after the date such capital contributions are made or the date such Capital Stock is sold, as the case may be, which are excluded from the calculation set forth in the definition of the term “Cumulative Credit”.

 

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Existing Indentures ” means, collectively, the Existing Senior Note Indentures and the Existing Senior Subordinated Note Indenture.

Existing Joint Ventures ” means joint ventures in existence on the Issue Date.

Existing Note Guarantee ” means an Existing Senior Note Guarantee or an Existing Senior Subordinated Note Guarantee.

Existing Notes ” means the aggregate principal amount of the Existing Senior Cash Notes, Existing Senior Toggle Notes and Existing Senior Subordinated Notes in existence on the Issue Date (after giving effect to the Existing Notes Exchange Offers) less the aggregate principal amount of Existing Senior Notes and Existing Senior Subordinated Notes that are thereafter repurchased, redeemed, discharged or otherwise repaid.

Existing Notes Exchange Offers ” means the transactions contemplated by the Offering Memorandum, including those described therein under the caption “Certain Relationships and Related Transactions”.

Existing Notes Offering Memorandum ” means the offering memorandum, dated April 5, 2007, relating to the sale of the Existing Notes.

Existing Securitization Documents ” means the Apple Ridge Documents and the U.K. Documents.

Existing Securitization Financings ” means the financing programs pursuant to the Apple Ridge Documents and the U.K. Documents, each as amended, restated, refinanced, modified or supplemented on or prior to the Issue Date.

Existing Senior Cash Notes ” means the 10.50% Senior Notes due 2014, issued by the Issuer pursuant to the Existing Senior Cash Note Indenture.

Existing Senior Cash Note Indenture ” means the Indenture dated as of April 10, 2007 among the Issuer, the guarantors named therein and The Bank of New York Mellon, as successor Trustee, governing the Existing Senior Cash Notes, as amended, supplemented or modified from time to time.

Existing Senior Note Guarantee ” means any guarantee of the obligations of the Issuer under the Existing Senior Notes and the Existing Senior Note Indentures by any Restricted Subsidiary in accordance with the provisions of the Existing Senior Note Indentures.

Existing Senior Notes ” means the Existing Senior Cash Notes and the Existing Senior Toggle Notes.

Existing Senior Note Indentures ” means, collectively, the Existing Senior Cash Note Indenture and the Existing Senior Toggle Note Indenture.

Existing Senior Subordinated Notes ” means the 12.375% Senior Subordinated Notes due 2015, issued by the Issuer pursuant to the Existing Senior Subordinated Note Indenture.

Existing Senior Subordinated Note Guarantee ” means any guarantee of the obligations of the Issuer under the Existing Senior Subordinated Notes and the Existing Senior Subordinated Note Indenture by any Restricted Subsidiary in accordance with the provisions of the Existing Senior Subordinated Note Indenture.

 

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Existing Senior Subordinated Note Indenture ” means the Indenture dated as of April 10, 2007 among the Issuer, the guarantors named therein and The Bank of New York Mellon, as successor Trustee, governing the Existing Senior Subordinated Notes, as amended, supplemented or modified from time to time.

Existing Senior Toggle Notes ” means the 11.00%/11.75% Senior Toggle Notes due 2014, issued by the Issuer pursuant to the Existing Senior Toggle Note Indenture.

Existing Senior Toggle Note Indenture ” means the Indenture dated as of April 10, 2007 among the Issuer, the guarantors named therein and The Bank of New York Mellon, as successor Trustee, governing the Existing Senior Toggle Notes, as amended, supplemented or modified from time to time.

Extended Maturity Note Indentures ” means, collectively, the Indentures governing the Extended Maturity Notes.

Extended Maturity Notes ” means, collectively, the Notes, the New 11.50% Senior Notes and the New 12.00% Senior Notes.

Extended Maturity Notes Guarantees ” means any guarantee of the obligations of the Issuer under the Extended Maturity Notes and the Extended Maturity Note Indentures by any Person in accordance with the provisions of the Extended Maturity Note Indentures.

Fair Market Value ” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.

Fixed Charge Coverage Ratio ” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Issuer or any of the Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other than in the case of revolving credit borrowings in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but on or prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.

For purposes of making the computation referred to above, Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to a company, operating unit, division, segment, business, group of assets or lines of business, that the Issuer or any of the Restricted Subsidiaries has made after the Issue Date and during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation,

 

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in each case with respect to an operating unit, division, segment, business, group of assets or lines of business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period. For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting Officer of the Issuer.

If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of twelve months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate.

Fixed Charges ” means, with respect to any Person for any period, the sum, without duplication, of:

(1) Consolidated Interest Expense of such Person for such period, and

(2) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and the Restricted Subsidiaries.

Foreign Subsidiary ” means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state or territory thereof or the District of Columbia and any Restricted Subsidiary of such Foreign Subsidiary.

GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date. For the purposes of this Indenture, the term “consolidated” with respect to any Person shall mean such Person consolidated with the Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as an Investment.

Global Notes Legend ” means the legend set forth under that caption in Exhibit A to this Indenture.

Government Obligations ” means securities that are:

(1) direct obligations of the United States of America, for the timely payment of which its full faith and credit is pledged, or

 

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(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such Government Obligations or a specific payment of principal of or interest on any such Government Obligations held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Obligations or the specific payment of principal of or interest on the Government Obligations evidenced by such depository receipt.

guarantee ” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

Hedging Obligations ” means, with respect to any Person, the obligations of such Person under:

(1) currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and

(2) other similar agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

Holder ” means the Person in whose name a Note is registered on the Registrar’s books.

Holdings ” means the party named as such in the preamble to this Indenture and its successors.

Holdings Guarantee ” means the guarantee of the obligations of the Issuer under this Indenture and the Notes by Holdings in accordance with the provisions of this Indenture.

Holdings Pari Passu Indebtedness ” means with respect to Holdings, (i) the guarantee by Holdings of the obligations of the Issuer under the Existing Senior Subordinated Note Indenture, (ii) the guarantee by Holdings of the obligations of the Issuer under the Convertible Note Indenture and (iii) any Indebtedness that is not Holdings Senior Indebtedness or Holdings Subordinated Indebtedness.

Holdings Representative ” means the trustee, agent or representative (if any) for an issue of Holdings Senior Indebtedness; provided that if, and for so long as, such Holdings Senior Indebtedness lacks such a Holdings Representative, then the Holdings Representative for such Holdings Senior Indebtedness shall at all times constitute the holder or holders of a majority in outstanding principal amount of obligations under such Holdings Senior Indebtedness.

Holdings Senior Indebtedness ” means with respect to Holdings means any future Indebtedness of Holdings that is designated by Holdings as Holdings Senior Indebtedness.

The obligations of Holdings under its guarantees of the obligations of the Issuer under the Existing Senior Notes, the Existing Senior Note Indentures, the New 11.50% Senior Notes, the New 12.00% Senior Notes,

 

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the New 11.50% Senior Note Indenture and the New 12.00% Senior Note Indenture shall be Holdings Senior Indebtedness for all purposes under this Indenture.

Holdings Subordinated Indebtedness ” means with respect to Holdings, any Indebtedness of Holdings, guarantee of Holdings or obligation of Holdings that specifically provides that such Indebtedness of Holdings, guarantee of Holdings or obligation of Holdings is to rank junior in right of payment to the Holdings Guarantee.

Incur ” means issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.

Indebtedness ” means, with respect to any Person:

(1) the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except (i) any such balance that constitutes a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP), (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

(2) to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and

(3) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person;

provided, however , that notwithstanding the foregoing, Indebtedness shall be deemed to exclude (1) Contingent Obligations incurred in the ordinary course of business and the Cendant Contingent Liabilities (including the Contingent Obligations described in note 13 to the Issuer’s consolidated financial statements for the year ended December 31, 2009, incorporated by reference in the Offering Memorandum) (not in respect of borrowed money); (2) deferred or prepaid revenues or marketing fees; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) obligations under or in respect of a Permitted Securitization Financing (but including the excess, if any, of the amount of the obligations thereunder or in respect thereof over the aggregate receivables balances securing or otherwise supporting such obligations but only to the extent that the Issuer or any Subsidiary of the Issuer other than a Special Purpose Securitization Subsidiary is directly or indirectly liable for such excess); (5) obligations under or in respect of Arbitrage Programs except in connection with the calculation of the Consolidated Leverage Ratio and the Secured Indebtedness Leverage Ratio; (6) obligations to make payments in respect of funds

 

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held under escrow arrangements in the ordinary course of business; (7) obligations to make payments to third party insurance underwriters in respect of premiums collected by the Issuer and the Restricted Subsidiaries in the ordinary course of business; or (8) obligations under the Merger Documents.

Notwithstanding anything in this Indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Accounting Standards Codification 815 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture.

Indenture ” means this Indenture, as amended or supplemented from time to time.

Independent Financial Advisor ” means an accounting, appraisal, investment banking firm or consultant in each case of nationally recognized standing, that is, in the good faith determination of the Issuer, qualified to perform the task for which it has been engaged.

Initial Notes ” has the meaning set forth in the recitals hereto.

Insurance Business ” means one or more aspects of the business of soliciting, administering, selling, issuing or underwriting insurance or reinsurance.

Insurance Subsidiary ” means any Subsidiary that is licensed by any Applicable Insurance Regulatory Authority to conduct, and conducts, an Insurance Business.

Interest Payment Date ” means April 15 and October 15 of each year to Stated Maturity.

Investment Grade Rating ” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

Investment Grade Securities ” means:

(1) securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents);

(2) securities that have a rating equal to or higher than Baa3 (or equivalent) by Moody’s or BBB- (or equivalent) by S&P, or an equivalent rating by any other Rating Agency, but excluding any debt securities or loans or advances between and among the Issuer and its Subsidiaries;

(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution; and

(4) corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.

Investments ” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital

 

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contributions (excluding accounts receivable, trade credit, security deposits and advances to customers or suppliers, advances or loans to franchisees in the ordinary course of business (whether evidenced by a note or otherwise) and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of the Issuer in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section 4.07:

(1) “Investments” shall include the portion (proportionate to the Issuer’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of the Issuer at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a re-designation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to:

(a) the Issuer’s “Investment” in such Subsidiary at the time of such re-designation, less

(b) the portion (proportionate to the Issuer’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and

(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by the senior management or the Board of Directors of the Issuer.

Issue Date ” means January 5, 2011, the date on which the Notes are originally issued.

Issuer ” means the party named as such in the preamble to this Indenture and its successors and not any of its Subsidiaries.

Issuer Order ” means a written request or order signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of such Issuer, and delivered to the Trustee.

Lien ” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest, preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement), any lease in the nature thereof, any agreement to give a mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest or encumbrance of any kind and, except in connection with any Permitted Securitization Financing, any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction (other than a filing for informational purposes); provided that in no event shall an operating lease or an option or an agreement to sell be deemed to constitute a Lien.

Management Fee Agreement ” means the Management Fee Agreement, dated as of April 10, 2007, by and among the Issuer, Apollo Management VI, L.P. and Apollo Alternative Assets, L.P., as in existence on the Original Issue Date.

 

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Management Group ” means the group consisting of the directors, executive officers and other management personnel of the Issuer or any direct or indirect parent of the Issuer, as the case may be, on the Issue Date.

Merger ” means the acquisition by Affiliates of the Sponsors of the Issuer pursuant to the Merger Documents.

Merger Documents ” means the Agreement and Plan of Merger by and among Holdings, Domus Acquisition Corp. and the Issuer, dated as of December 15, 2006, and any other document entered into in connection therewith, in each case as amended, supplemented or modified from time to time on or prior to the Original Issue Date.

Merger Transactions ” means the Merger and the transactions contemplated by the Merger Documents, the offerings of the Existing Notes, and borrowings made pursuant to the Credit Agreement on the Original Issue Date and the refinancing of the then Existing Securitization Financings (which may have occurred prior to the Original Issue Date) and, in each case, the application of the proceeds therefrom.

Moody’s ” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

Net Income ” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

Net Proceeds ” means the aggregate cash proceeds received by the Issuer or any of the Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements related thereto), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to clause (1) of Section 4.10(b)) to be paid as a result of such transaction, and any deduction of appropriate amounts to be provided by the Issuer as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Issuer after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction and any distributions and payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Sale.

New 11.50% Senior Notes ” means the Issuer’s 11.50% Senior Notes due 2017 issued pursuant to the New 11.50% Senior Note Indenture.

New 11.50% Senior Note Indenture ” means the indenture governing the New 11.50% Senior Notes due 2017.

New Notes ” means, collectively, the Extended Maturity Notes and the Convertible Notes issued on the Issue Date.

 

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New Senior Notes ” means the New 11.50% Senior Notes and the New 12.00% Senior Notes.

New 12.00% Senior Notes ” means the Issuer’s 12.00% Senior Notes due 2017 issued pursuant to the New 12.00% Senior Note Indenture.

New 12.00% Senior Note Indenture ” means the indenture governing the New 12.00% Senior Notes.

Non-Guarantor Subsidiary ” means a Restricted Subsidiary that is not a Note Guarantor.

Note Guarantee ” means any guarantee of the obligations of the Issuer under this Indenture and the Notes by any Note Guarantor in accordance with the provisions of this Indenture.

Note Guarantor ” means any Restricted Subsidiary that Incurs a Note Guarantee and its successors; provided that upon the release or discharge of such Person from its Note Guarantee in accordance with this Indenture, such Person ceases to be a Note Guarantor.

Notes ” means the Initial Notes and more particularly means any Note authenticated and delivered under this Indenture. For all purposes of this Indenture, the term “Notes” shall also include Exchange Notes and any Additional Notes that may be issued under a supplemental indenture. The Initial Notes issued on the Issue Date, Additional Notes and Exchange Notes shall be treated as a single class for all purposes under this Indenture.

NRT ” means NRT Incorporated, a Delaware corporation, and any successors thereto.

Obligations ” means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness; provided that Obligations with respect to the Notes shall not include fees or indemnifications in favor of the Trustee and other third parties other than the Holders of the Notes.

Offering Memorandum ” means the offering memorandum, dated November 30, 2010, relating to the exchange of the Existing Notes for the New Notes, as supplemented by Supplement No. 1 dated December 6, 2010, Supplement No. 2 dated December 10, 2010, Supplement No. 3 dated December 13, 2010 and Supplement No. 4 dated December 15, 2010.

Officer ” means the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Issuer. “Officer” of any Note Guarantor or Holdings has a correlative meaning.

Officer’s Certificate ” means a certificate signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer that meets the requirements set forth in this Indenture. “Officer’s Certificate” of Holdings or any Note Guarantor has a correlative meaning.

OID Legend ” means the legend set forth in Section 2.3(e)(i) of Appendix A to this Indenture.

 

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Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer, Holdings, a Note Guarantor or the Trustee.

Original Issue Date ” means April 10, 2007.

Permitted Holders ” means, at any time, each of the Sponsors and members of the Management Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

Permitted Investments ” means:

(1) any Investment in the Issuer or any Restricted Subsidiary;

(2) any Investment in Cash Equivalents or Investment Grade Securities;

(3) any Investment by the Issuer or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary;

(4) any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of Section 4.10 or any other disposition of assets not constituting an Asset Sale;

(5) any Investment existing on, or made pursuant to binding commitments existing on, the Original Issue Date; provided, that the amount of any such Investment may only be increased as required by the terms of such Investment as in existence on the Original Issue Date;

(6) advances after the Original Issue Date to directors, officers or employees not in excess of $50.0 million outstanding at any one time;

(7) any Investment acquired by the Issuer or any of the Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Issuer or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable; (b) as a result of a foreclosure by the Issuer or any of the Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default; or (c) as a result of the settlement, compromise or resolution of litigation, arbitration or other disputes with Persons who are not Affiliates;

(8) Hedging Obligations permitted under clause (10) of Section 4.09(b);

(9) any Investment by the Issuer or any of the Restricted Subsidiaries in a Similar Business having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (9) after the Original Issue Date that are at that time outstanding (after giving effect to the sale or other transfer of an Unrestricted Subsidiary to the extent the proceeds of such sale received by the Issuer and its Restricted Subsidiaries consists of cash and Cash Equivalents), not to exceed the greater of (x) $325.0 million and (y) 2.75% of Total Assets at the

 

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time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however, that if any Investment pursuant to this clause (9) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be a Restricted Subsidiary;

(10) additional Investments by the Issuer or any of the Restricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (10) after the Original Issue Date that are at that time outstanding (after giving effect to the sale or other transfer of an Unrestricted Subsidiary to the extent the proceeds of such sale received by the Issuer and its Restricted Subsidiaries consists of cash and Cash Equivalents), not to exceed the greater of (x) $400.0 million and (y) 3.25% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(11) loans and advances to officers, directors and employees for business-related travel expenses, moving expenses and other similar expenses, in each case Incurred in the ordinary course of business;

(12) Investments the payment for which consists of Equity Interests of the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer, as applicable; provided, however, that such Equity Interests will not increase the amount available for Restricted Payments under clauses (2) and (3) of the definition of Cumulative Credit;

(13) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 4.11(b) (except transactions described in clauses (2), (6), (7), (17) and (18) of such Section);

(14) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

(15) guarantees issued in accordance with Section 4.09 and Section 4.15;

(16) Investments consisting of purchases and acquisitions of inventory, supplies, materials, services and equipment or purchases of contract rights or licenses or leases of intellectual property, in each case in the ordinary course of business;

(17) Investments arising as a result of Permitted Securitization Financings;

(18) additional Investments after the Original Issue Date in joint ventures of the Issuer or any of the Restricted Subsidiaries not to exceed the greater of $100.0 million at any one time outstanding and 0.75% of Total Assets at the time of Incurrence (plus an amount (without duplication of amounts reflected in Consolidated Net Income) equal to any return of capital actually received in respect of Investments theretofore made pursuant to this clause (18) in the aggregate, as valued at the Fair Market Value of such Investment at the time such Investment is made); provided, however, that if any Investment pursuant to this clause (18) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be

 

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deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (18) for so long as such Person continues to be a Restricted Subsidiary;

(19) Investments of a Restricted Subsidiary of the Issuer acquired after the Original Issue Date or of an entity merged into, amalgamated with, or consolidated with the Issuer or a Restricted Subsidiary in a transaction that is not prohibited by Section 5.01 after the Original Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;

(20) any Investments in connection with the Arbitrage Programs;

(21) Investments in connection with the defeasance or discharge of the Existing Notes or the New Notes (which Investments would otherwise constitute Permitted Investments);

(22) advances or loans to relocating employees of a customer in the relocation services business of the Issuer and its Restricted Subsidiaries made in the ordinary course of business; and

(23) guarantees by the Issuer or any of its Restricted Subsidiaries of operating leases (other than Capitalized Lease Obligations), trademarks, licenses, purchase agreements or of other obligations that do not constitute Indebtedness, in each case entered into by the Issuer or any Restricted Subsidiary in the ordinary course of business.

All Permitted Investments outstanding on the Issue Date and made on or after the after the Original Issue Date that were permitted under the Existing Indentures prior to the Issue Date pursuant to a clause corresponding to any of clauses (6), (9), (10) or (18) above shall be deemed to have been made on the Issue Date pursuant to the corresponding clause above in an amount equal to the amount of such Permitted Investment when actually made.

Permitted Junior Securities ” means unsecured debt or Equity Interests of the Issuer or any Note Guarantor or any successor corporation issued pursuant to a plan of reorganization or readjustment of the Issuer or any Note Guarantor, as applicable, that are subordinated to the payment of all then outstanding Senior Indebtedness of the Issuer or any Note Guarantor, as applicable (and any debt securities issued in exchange for Senior Indebtedness), at least to the same extent that the Notes and the related Note Guarantee are subordinated to the payment of all Senior Indebtedness of the Issuer or any Note Guarantor, as applicable, on the Issue Date, so long as to the extent that any Senior Indebtedness of the Issuer or any Note Guarantor, as applicable, outstanding on the date of consummation of any such plan of reorganization or readjustment is not paid in full in cash on such date, the holders of any such Senior Indebtedness not so paid in full in cash have consented to the terms of such plan of reorganization or readjustment.

Permitted Lien ” means, with respect to any Person:

(1) pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory or regulatory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

 

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(2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(3) Liens for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(4) Liens in favor of issuers of performance and surety bonds or bid bonds or similar liabilities or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

(5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties incurred in the ordinary course of business and title defects or irregularities that are of a minor nature and which do not in the aggregate interfere in any material respect with the ordinary course of business of such Person;

(6) (A) Liens on assets of a Restricted Subsidiary that is not a Note Guarantor securing Indebtedness of such Restricted Subsidiary permitted to be Incurred pursuant to Section 4.09 (provided that such Lien does not extend to the property or assets of the Issuer or any Subsidiary of the Issuer other than a Restricted Subsidiary that is not a Note Guarantor), (B) Liens securing Senior Indebtedness and (C) Liens securing Indebtedness permitted to be Incurred pursuant to clause (4) (provided that such Liens do not extend to any property or assets that are not property being purchased, leased, constructed or improved with the proceeds of such Indebtedness being Incurred pursuant to clause (4)), (12), (20) (provided that such Lien does not extend to the property or assets of any Subsidiary of the Issuer other than a Foreign Subsidiary) or (21) of Section 4.09(b);

(7) Liens existing on the Issue Date (other than with respect to Obligations in respect of the Credit Agreement, but including with respect to Obligations in respect of the Delayed Draw Term Loans);

(8) Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided, further, however, that such Liens may not extend to any other property owned by the Issuer or any Restricted Subsidiary;

(9) Liens on assets or property at the time the Issuer or a Restricted Subsidiary acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into the Issuer or any Restricted Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided, further, however, that the Liens may not extend to any other property owned by the Issuer or any Restricted Subsidiary;

 

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(10) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary permitted to be Incurred in accordance with Section 4.09;

(11) Liens securing Hedging Obligations not incurred in violation of this Indenture; provided that with respect to Hedging Obligations relating to Indebtedness, such Lien extends only to the property securing such Indebtedness;

(12) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(13) leases and subleases of real property granted to others in the normal course of business which do not materially interfere with the ordinary conduct of the business of the Issuer or any of the Restricted Subsidiaries;

(14) Liens arising from precautionary Uniform Commercial Code financing statements or consignments entered into in connection with any transaction otherwise permitted under this Indenture;

(15) Liens in favor of the Issuer or any Note Guarantor;

(16) Liens in respect of Permitted Securitization Financings on all or a portion of the assets of Special Purpose Securitization Subsidiaries (including without limitation, pursuant to UCC filings covering sales of accounts, chattel paper, payment intangibles, promissory notes with respect to Permitted Securitization Financings and beneficial interests therein);

(17) deposits made in the ordinary course of business to secure liability to insurance carriers;

(18) Liens on the Equity Interests of Unrestricted Subsidiaries;

(19) grants of software and other technology licenses in the ordinary course of business;

(20) [Reserved];

(21) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6)(B), (7), (8), (9), (15) and (20); provided, however, that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property) and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6)(B), (7), (8), (9), (15) and (20) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

 

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(22) Liens on equipment of the Issuer or any Restricted Subsidiary granted in the ordinary course of business to the Issuer’s or such Restricted Subsidiary’s client at which such equipment is located;

(23) judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

(24) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

(25) Liens incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business;

(26) liens arising by virtue of any statutory or common law provisions relating to banker’s liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution or as to purchase orders and other agreements entered into with customers in the ordinary course of business;

(27) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

(28) [Reserved];

(29) Liens securing the Arbitrage Programs and related segregated deposit and securities accounts;

(30) Liens on any property or assets of the Issuer or any Restricted Subsidiary securing Indebtedness permitted by clause (27) of Section 4.09; provided, that such Lien (i) does not apply to any other property or asset of the Issuer or any Restricted Subsidiary not securing such Indebtedness at the date of the acquisition of such property or asset and (ii) is not created in contemplation of or in connection with such acquisition;

(31) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(32) Liens solely on any cash earnest money deposits made by the Issuer or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement in respect of any Investment permitted hereunder;

(33) Liens on securities that are the subject of repurchase agreements constituting Cash Equivalents;

(34) Liens securing insurance premiums financing arrangements; provided, that such Liens are limited to the applicable unearned insurance premiums;

(35) other Liens securing obligations not to exceed $75.0 million at any one time outstanding; and

 

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(36) Liens on proceeds from Cendant Contingent Assets received by the Issuer and held in trust (or otherwise segregated or pledged) for the benefit of the other parties to the Separation and Distribution Agreement (other than Travelport Inc.) to secure the Issuer’s obligations under Section 7.9 thereof.

Permitted Securitization Documents ” means all documents and agreements evidencing, relating to or otherwise governing a Permitted Securitization Financing.

Permitted Securitization Financing ” means one or more transactions pursuant to which Securitization Assets are sold, conveyed or otherwise transferred to (x) a Special Purpose Securitization Subsidiary (in the case of the Issuer or a Restricted Subsidiary of the Issuer) or (y) any other Person (in the case of a transfer by a Special Purpose Securitization Subsidiary), or Liens are granted in Securitization Assets (whether existing on the Issue Date or arising in the future); provided, that (1) recourse to the Issuer or any Restricted Subsidiary (other than the Special Purpose Securitization Subsidiaries) in connection with such transactions shall be limited to Standard Securitization Undertakings; (2) no property or assets of the Issuer or any other Restricted Subsidiary of the Issuer (other than a Special Purpose Securitization Subsidiary) shall be subject to such Permitted Securitization Financing other than pursuant to Standard Securitization Undertakings; (3) any material contract, agreement, arrangement or understanding with the Issuer or any Restricted Subsidiary of the Issuer included in the Permitted Securitization Documents with respect to such Permitted Securitization Financing shall be on terms which the Issuer reasonably believes to be not materially less favorable to the Issuer or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Issuer; and (4) with respect to any Permitted Securitization Financing entered into after the Issue Date, the Board of Directors of the Issuer shall have determined in good faith that such Permitted Securitization Financing (including financing terms, advance rates, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to the Issuer and the Special Purpose Securitization Subsidiaries involved in such Permitted Securitization Financing. For the avoidance of doubt, the Existing Securitization Financings as in effect on the Issue Date shall be Permitted Securitization Financings.

Person ” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

Preferred Stock ” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.

Qualified CFC Holding Company ” shall mean a Wholly Owned Subsidiary of the Issuer that is a Delaware limited liability company that is treated as a disregarded entity for U.S. federal income tax purposes, the primary asset of which consists of Equity Interests in either (i) one or more Foreign Subsidiaries or (ii) a Delaware limited liability company the primary asset of which consists of Equity Interests in one or more Foreign Subsidiaries.

Rating Agency ” means (1) each of Moody’s and S&P and (2) if Moody’s or S&P ceases to rate the Notes for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(f) under the Exchange Act selected by the Issuer or any direct or indirect parent of the Issuer as a replacement agency for Moody’s or S&P, as the case may be.

Record Date ” for the interest or Additional Interest, if any, payable on any applicable Interest Payment Date means April 1 or October 1 (whether or not a Business Day) next preceding such Interest Payment Date.

 

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Registration Rights Agreement ” means the Registration Rights Agreement in respect of the Notes, dated as of the Issue Date, among the Dealer Managers, the Issuer, Holdings and the Note Guarantors.

Representative ” means the trustee, agent or representative (if any) for an issue of Senior Indebtedness or Designated Senior Indebtedness, as applicable; provided that if, and for so long as, such Senior Indebtedness lacks such a Representative, then the Representative for such Senior Indebtedness shall at all times constitute the holder or holders of a majority in outstanding principal amount of obligations under such Senior Indebtedness.

Restricted Cash ” means cash and Cash Equivalents held by Restricted Subsidiaries that is contractually restricted from being distributed to the Issuer or not available for general corporate purposes, except for such restrictions that are contained in agreements governing Indebtedness permitted under this Indenture and that is secured by such cash or Cash Equivalents.

Restricted Investment ” means an Investment other than a Permitted Investment.

Restricted Notes Legend ” means the legend set forth in Section 2.3(e)(i) of Appendix A to this Indenture.

Restricted Subsidiary ” means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person; provided that upon an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of “Restricted Subsidiary” (provided it continues to be a Subsidiary of such Person). Unless otherwise indicated in this Indenture, all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of the Issuer.

S&P ” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., or any successor to the rating agency business thereof.

Sale/Leaseback Transaction ” means an arrangement relating to property now owned or hereafter acquired by the Issuer or a Restricted Subsidiary whereby the Issuer or a Restricted Subsidiary transfers such property to a Person and the Issuer or such Restricted Subsidiary leases it from such Person, other than leases between the Issuer and a Restricted Subsidiary or between Restricted Subsidiaries.

SEC ” means the Securities and Exchange Commission.

Secured Indebtedness ” means any Indebtedness secured by a Lien.

Secured Indebtedness Leverage Ratio ” means, with respect to any Person at any date, the ratio of (i) Secured Indebtedness and Disqualified Stock of such Person and its Restricted Subsidiaries and Preferred Stock of Non-Guarantor Subsidiaries as of such date (determined on a consolidated basis in accordance with GAAP) less the amount of cash and Cash Equivalents in excess of any Restricted Cash that would be stated on the balance sheet of such Person and its Restricted Subsidiaries (other than Special Purpose Securitization Subsidiaries) and held by such Person and its Restricted Subsidiaries (other than Special Purpose Securitization Subsidiaries) as of such date of determination to (ii) EBITDA of such Person for the four full fiscal quarters for which internal financial statements are available immediately preceding such date. In the event that the Issuer or any of the Restricted Subsidiaries Incurs or redeems any Indebtedness or issues or redeems Disqualified Stock or Non-Guarantor Subsidiaries Incur or redeem Preferred Stock subsequent to the commencement of the period for which the Secured Indebtedness Leverage Ratio is being calculated but on or prior to or simultaneously with the event for which the calculation of the Secured Indebtedness Leverage Ratio is made (the “Secured Leverage

 

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Calculation Date”), then the Secured Indebtedness Leverage Ratio shall be calculated giving pro forma effect to such Incurrence or redemption of Indebtedness or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period; provided that the Issuer may elect, pursuant to an Officer’s Certificate delivered to the Trustee, that all or any portion of the commitment under any Secured Indebtedness as being Incurred at the time such commitment is entered into and any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be the creation or Incurrence of Indebtedness or a Lien at such subsequent time. Notwithstanding the foregoing and for purposes of this calculation, the aggregate principal amount of Indebtedness shall be calculated without giving effect to purchase accounting adjustments.

For purposes of making the computation referred to above, Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP) in each case with respect to a company, operating unit, division, segment, business, group of assets or lines of business, that the Issuer or any of the Restricted Subsidiaries has made after the Issue Date and during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Secured Leverage Calculation Date (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation, in each case with respect to an operating unit, division, segment, business, group of assets or lines of business, that would have required adjustment pursuant to this definition, then the Secured Indebtedness Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period. For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting Officer of the Issuer.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Securitization Assets ” means rights to receive payments and funds under relocation contracts and related contracts, homes held for resale, receivables relating to mortgage payments, equity payments and mortgage payoffs, other related receivables, beneficial interests in such assets and assets relating thereto and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving receivables and similar assets, made subject to a Permitted Securitization Financing, in each case related to the relocation services business.

Securitization Fees ” means distributions or payments made directly or by means of discounts with respect to any participation interests issued or sold in connection with, and all other fees paid to a Person other than the Issuer or any Restricted Subsidiary in connection with any Permitted Securitization Financing.

Securitization Repurchase Obligation ” means any obligation of a seller of Securitization Assets in a Permitted Securitization Financing to repurchase Securitization Assets as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a Securitization Asset or

 

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portion thereof becoming subject to any asserted defense, dispute, off set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

Senior Indebtedness ” with respect to the Issuer or any of the Note Guarantors means all Indebtedness and any Securitization Repurchase Obligation of the Issuer or any such Note Guarantor, including interest thereon (including interest accruing on or after the filing of any petition in bankruptcy or similar proceeding or for reorganization relating to the Issuer or any Note Guarantor at the rate specified in the documentation with respect thereto whether or not a claim for post-filing interest is allowed in such proceeding) and other amounts (including fees, expenses, reimbursement obligations under letters of credit and indemnities) owing in respect thereof, whether outstanding on the Issue Date or thereafter Incurred, unless the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such obligations are subordinated in right of payment to any other Indebtedness of the Issuer or such Note Guarantor, as applicable; provided, however , that Senior Indebtedness shall not include, as applicable:

(1) any obligation of the Issuer to any Subsidiary of the Issuer (other than any Securitization Repurchase Obligation) or of any Note Guarantor to the Issuer or any other Subsidiary of the Issuer,

(2) any liability for federal, state, local or other taxes owed or owing by the Issuer or such Note Guarantor,

(3) any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities),

(4) any Indebtedness or obligation of the Issuer or any Note Guarantor that by its terms is subordinate or junior in any respect (excluding the intercreditor arrangements benefiting the lenders under the Apple Ridge Documents) to any other Indebtedness or obligation of the Issuer or such Note Guarantor, as applicable, including any Senior Subordinated Pari Passu Indebtedness,

(5) any obligations with respect to any Capital Stock, or

(6) any Indebtedness Incurred in violation of this Indenture but, as to any such Indebtedness Incurred under the Credit Agreement, no such violation shall be deemed to exist for purposes of this clause (6) if the holders of such Indebtedness under the Credit Agreement, or their Representative shall have received an Officer’s Certificate to the effect that the Incurrence of such Indebtedness does not (or, in the case of a revolving credit facility thereunder, the Incurrence of the entire committed amount thereof at the date on which the initial borrowing thereunder is made, would not) violate this Indenture.

If any Senior Indebtedness is disallowed, avoided or subordinated pursuant to the provisions of Section 548 of Title 11 of the United States Code or any applicable state fraudulent conveyance law, such Senior Indebtedness nevertheless will constitute Senior Indebtedness.

Senior Subordinated Pari Passu Indebtedness ” means:

(1) with respect to the Issuer, the Notes and any Indebtedness that ranks pari passu in right of payment to the Notes; and

(2) with respect to any Note Guarantor, its Note Guarantee and any Indebtedness that ranks pari passu in right of payment to such Note Guarantor’s Note Guarantee.

 

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Separation and Distribution Agreement ” means the Separation and Distribution Agreement by and among Cendant, the Issuer, Travelport Inc. and Wyndham Worldwide Corporation, dated as of July 27, 2006.

Shelf Registration Statement ” means the Shelf Registration Statement as defined in the Registration Rights Agreement.

Significant Subsidiary ” means any Restricted Subsidiary that would be a “Significant Subsidiary” of the Issuer within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC, as such Regulation is in effect on the Issue Date.

Similar Business ” means a business, the majority of whose revenues are derived from the activities of the Issuer and its Restricted Subsidiaries as of the Issue Date or any business or activity that is reasonably similar or complementary to any business conducted or proposed to be conducted by the Issuer and the Restricted Subsidiaries as of the Issue Date or a reasonable extension, development or expansion thereof or ancillary thereto.

Special Purpose Securitization Subsidiary ” means any Restricted Subsidiary (x) party as of the Issue Date to any Existing Securitization Document or (y) (1) to which the Issuer or a Subsidiary of the Issuer transfers or otherwise conveys Securitization Assets, (2) which engages in no activities other than in connection with the receipt, management, transfer and financing of those Securitization Assets and activities incidental or related thereto, (3) none of the obligations of which are guaranteed by the Issuer or any Subsidiary of the Issuer (other than another Special Purpose Securitization Subsidiary) other than pursuant to Standard Securitization Undertakings, and (4) with respect to which neither the Issuer nor any Subsidiary of the Issuer has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.

Sponsors ” means (i) (x) one or more investment funds controlled by Apollo Management, L.P. and (y) Apollo Management, L.P. and its Affiliates (collectively, the “Apollo Sponsors”) and (ii) any Person that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) with any Apollo Sponsors; provided that in the case of clause (ii), any Apollo Sponsor (x) owns a majority of the voting power of such group and (y) controls a majority of the Board of Directors of the Issuer.

Standard Securitization Undertakings ” means representations, warranties (and any related repurchase obligations), servicer obligations, obligations to transfer Securitization Assets, guarantees of performance and payments (other than payments of the obligations backed by the Securitization Assets or obligations of Special Purpose Securitization Subsidiaries), and covenants and indemnities entered into by the Issuer or any Subsidiary of the Issuer of a type that the Board of Directors of the Issuer has determined in good faith to be reasonably customary in securitizations and/or are reasonably similar to those in the Existing Securitization Financings.

Stated Maturity ” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

Subordinated Indebtedness ” means (a) with respect to the Issuer, any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the Notes and (b) with respect to any Note Guarantor, any Indebtedness of such Note Guarantor which is by its terms subordinated in right of payment to its Note Guarantee.

 

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Subsidiary ” means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total ordinary voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof (or persons performing similar functions) is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company or similar entity of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

Tax Distributions ” means any distributions described in clause (12) of Section 4.07(b).

TIA ” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of this Indenture.

Title Resource Group ” means Title Resource Group LLC (formerly known as Cendant Settlement Services Group LLC), a Delaware limited liability company, and any successor thereto.

Total Assets ” means the total consolidated assets of the Issuer and the Restricted Subsidiaries, as shown on the most recent balance sheet of the Issuer.

Transfer Restricted Notes ” means Definitive Notes and any other Notes that bear or are required to bear the Restricted Notes Legend.

Treasury Rate ” means, as of the applicable redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to such redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to April 15, 2013; provided, however, that if the period from such redemption date to April 15, 2013 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

Trust Officer ” means:

(1) any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject, and

(2) who shall have direct responsibility for the administration of this Indenture.

Trustee ” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

U.K. Documents ” means the letter agreement, dated August 12, 2010, by and between Cartus Financing Limited and Lloyds TSB Bank plc and the letter agreement, dated August 13, 2010, by

 

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and between Cartus Financing Limited and Lloyds TSB Bank plc, and each other agreement or other document contemplated by or entered into in connection with and/or in replacement of the foregoing, each as amended, restated, refinanced, modified or supplemented on or prior to the Issue Date.

Unrestricted Subsidiary ” means:

(1) any Subsidiary of the Issuer that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of such Person in the manner provided below; and

(2) any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors of the Issuer may designate any Subsidiary of the Issuer (including any newly acquired or newly formed Subsidiary of the Issuer) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, the Issuer or any other Subsidiary of the Issuer that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of the Issuer or any of the Restricted Subsidiaries; provided, further, however, that either:

(a) the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or

(b) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.07

The Board of Directors of the Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation:

(x) (1) the Issuer could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described under Section 4.09 or (2) the Fixed Charge Coverage Ratio for the Issuer and the Restricted Subsidiaries would be greater than such ratio for the Issuer and the Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and

(y) no Event of Default shall have occurred and be continuing.

Any such designation by the Board of Directors of the Issuer shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors of the Issuer giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing provisions.

Voting Stock ” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

Weighted Average Life to Maturity ” means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years (calculated to the nearest one-twelfth) from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.

 

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Wholly Owned Restricted Subsidiary ” is any Wholly Owned Subsidiary that is a Restricted Subsidiary.

Wholly Owned Subsidiary ” of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or shares required to be held by foreign nationals) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.

Section 1.02.  Other Definitions.

 

Term

  

Defined in

Section

“Agent Members”    2.1(d) of Appendix A
“Affiliate Transaction”    4.11(a)
“Applicable Procedures”    1.1(a) of Appendix A
“ARSC”    11.07(a)
“Asset Sale Offer”    4.10(b)
“Authentication Order”    2.02
“Automatic Exchange”    2.3(i) of Appendix A
“Automatic Exchange Date”    2.3(i) of Appendix A
“Automatic Exchange Notice”    2.3(i) of Appendix A
“Automatic Exchange Notice Date”    2.3(i) of Appendix A
“Blockage Notice”    10.03
“Cartus”    11.07(a)
“CFC”    11.07(a)
“Change of Control Offer”    4.14(b)
“Change of Control Payment”    4.14(a)
“Change of Control Payment Date”    4.14(b)(3)
“Clearstream”    1.1(a) of Appendix A
“Commission”    1.03
“Covenant Defeasance”    8.03
“DTC”    2.03
“Euroclear”    1.1(a) of Appendix A
“Event of Default”    6.01
“Excess Proceeds”    4.10
“Global Note”    2.1(b) of Appendix A
“Guarantee Blockage Notice”    13.03
“Guarantee Payment Blockage Period”    13.03
“Holdings Guarantee Blockage Notice”    14.03
“Holdings Guarantee Payment Blockage Period”    14.03
“Holdings Non-Payment Default”    14.03

 

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Term

  

Defined in

Section

“Holdings Payment Default”    14.03
“Holdings Permitted Junior Securities”    14.02
“IAI”    1.1(a) of Appendix A
“IAI Global Note”    2.1(b) of Appendix A
“indenture securities”    1.03
“indenture security Holder”    1.03
“ indenture to be qualified”    1.03
“Indenture Trustee”    11.07(a)(i)
“indenture trustee” or “institutional trustee”    1.03
“Institutional Accredited Investor Notes”    1.1(a) of Appendix A
“Legal Defeasance”    8.02
“Non-Payment Default”    10.03
“Note Guarantor Non-Payment Default”    13.03
“Note Guarantor Payment Default”    13.03
“Note Register”    2.03
“obligor”    1.03
“Offer Amount”    3.09(b)
“Offer Period”    3.09(b)
“Paying Agent”    2.03
“pay its Guarantee”    12.03
“pay its Holdings Guarantee”    14.03
“pay the Notes”    10.03
“Payment Blockage Period”    10.03
“Payment Default”    10.03
“Pool Assets”    11.07(a)(ii)
“Purchase Date”    3.09(b)
“QIB”    1.1(a) of Appendix A
“Refinancing Indebtedness”    4.09(b)(14)
“Refunding Capital Stock”    4.07(b)(2)
“Registrar”    2.03
“Regulation S”    1.1(a) of Appendix A
“Regulation S Global Note”    2.1(b) of Appendix A
“Regulation S Notes”    1.1(a) of Appendix A
“Regulation S Permanent Global Note”    2.1(b) of Appendix A
“Regulation S Temporary Global Note”    2.1(b) of Appendix A
“Restricted Note”    2.3(i) of Appendix A
“Restricted Payments”    4.07(a)
“Restricted Period”    1.1(a) of Appendix A

 

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Term

  

Defined in

Section

“Retired Capital Stock”    4.07(b)(2)
“Reversion Date”    4.17(b)
“Rule 501”    1.1(a) of Appendix A
“Rule 144”    1.1(a) of Appendix A
“Rule 144A”    1.1(a) of Appendix A
“Rule 144A Global Note”    2.1(b) of Appendix A
“Rule 144A Notes”    1.1(a) of Appendix A
“Rule 904”    1.1(a) of Appendix A
“Specified Merger/Transfer Transaction”    5.01(a)
“Successor Company”    5.01(a)(1)
“Successor Note Guarantor”    5.01(b)(1)
“Suspended Covenants”    4.17(a)(2)
“Suspension Date”    4.17(a)
“Suspension Period”    4.17(b)
“Transfer”    5.01(b)
“Unrestricted Note”    2.3(i) of Appendix A

Section 1.03.  Incorporation by Reference of TIA.

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.

The following TIA terms used in this Indenture have the following meanings:

“Commission” means the SEC;

“indenture securities” means the Notes;

“indenture security Holder” means a Holder of a Note;

“indenture to be qualified” means this Indenture;

“indenture trustee” or “institutional trustee” means the Trustee; and

“obligor” on the Notes, the Holdings Guarantee and the Note Guarantees means the Issuer, Holdings and the Note Guarantors, respectively, and any successor obligor upon the Notes, the Holdings Guarantee and the Note Guarantees, respectively.

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

 

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Section 1.04.  Rules of Construction.

Unless the context otherwise requires:

(i) a term has the meaning assigned to it;

(ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(iii) “or” is not exclusive;

(iv) words in the singular include the plural, and in the plural include the singular;

(v) “will” shall be interpreted to express a command;

(vi) provisions apply to successive events and transactions;

(vii) references to sections of, or rules under, the Securities Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

(viii) unless the context otherwise requires, any reference to an “Article,” “Section” or “clause” refers to an Article, Section or clause, as the case may be, of this Indenture;

(ix) (1) unsecured Indebtedness shall not be deemed to be subordinated or junior to Secured Indebtedness merely because it is unsecured, (2) Senior Indebtedness shall not be deemed to be subordinated or junior to any other Senior Indebtedness merely because it has a junior priority with respect to the same collateral and (3) Indebtedness that is not guaranteed shall not be deemed to be subordinated or junior to Indebtedness that is guaranteed merely because of such guarantee; and

(x) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not any particular Article, Section, clause or other subdivision.

Section 1.05.  Acts of Holders.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Proof of execution of any such instrument or of a writing appointing any such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section 1.05.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing

 

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such instrument or writing acknowledged to him the execution thereof. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

(c) The ownership of Notes shall be proved by the Note Register.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

(e) The Issuer may, in the circumstances permitted by the TIA, set a record date for purposes of determining the identity of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or take any other act, or to vote or consent to any action by vote or consent authorized or permitted to be given or taken by Holders. Unless otherwise specified, if not set by the Issuer prior to the first solicitation of a Holder made by any Person in respect of any such action, or in the case of any such vote, prior to such vote, any such record date shall be the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee prior to such solicitation.

(f) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each such different part.

(g) Without limiting the generality of the foregoing, a Holder, including DTC that is the Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and DTC that is the Holder of a Global Note may provide its proxy or proxies to the beneficial owners of interests in any such Global Note through such depositary’s standing instructions and customary practices.

(h) The Issuer may fix a record date for the purpose of determining the Persons who are beneficial owners of interests in any Global Note held by DTC entitled under the procedures of such depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other action shall be valid or effective if made, given or taken more than 90 days after such record date.

 

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ARTICLE 2

THE NOTES

Section 2.01.  Form and Dating; Terms.

(a) General . Provisions relating to the Notes are set forth in Appendix A , which is hereby incorporated in and expressly made a part of this Indenture. The (a) Initial Notes and the Trustee’s certificate of authentication and (b) any Additional Notes (if issued as Transfer Restricted Notes) and the Trustee’s certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Exchange Notes and any Additional Notes issued other than as Transfer Restricted Notes and the Trustee’s certificate of authentication shall each be substantially in the form of Exhibit B hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuer, Holdings or any Note Guarantor is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Note shall be dated the date of its authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

(b) Terms . The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited.

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Issuer, Holdings, the Note Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

Additional Notes ranking pari passu with the Initial Notes may be created and issued from time to time by the Issuer without notice to or consent of the Holders and shall be consolidated with and form a single class with the Initial Notes and shall have the same terms as to status, redemption or otherwise as the Initial Notes; provided that the Issuer’s ability to issue Additional Notes shall be subject to the Issuer’s compliance with Section 4.09 hereof. Any Additional Notes shall be issued with the benefit of an indenture supplemental to this Indenture.

Section 2.02.  Execution and Authentication.

At least one Officer shall execute the Notes on behalf of the Issuer by manual or facsimile signature.

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid.

A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated substantially in the form of Exhibit A or Exhibit B attached hereto, as the case may be, by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been duly authenticated and delivered under this Indenture.

On the Issue Date, the Trustee shall, upon receipt of an Issuer Order (an “ Authentication Order ”), authenticate and deliver the Initial Notes. In addition, at any time, from time to time, the Trustee shall upon an Authentication Order authenticate and deliver any Additional Notes and Exchange Notes

 

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for an aggregate principal amount specified in such Authentication Order for such Additional Notes or Exchange Notes issued hereunder.

The Trustee shall not be required to authenticate any Additional Notes, nor will it be liable for its refusal to authenticate any Additional Notes, if the authentication of such Additional Notes will affect the Trustee’s own rights, duties or immunities under the Notes and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee or if the Trustee, being advised by counsel, determines that such action may not lawfully be taken or may expose the Trustee to personal liability to existing Holders or others.

The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Issuer.

Section 2.03.  Registrar and Paying Agent.

The Issuer shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“ Registrar ”) and an office or agency where Notes may be presented for payment (“ Paying Agent ”). The Registrar shall keep a register of the Notes (“ Note Register ”) and of their transfer and exchange. The Issuer may appoint one or more co-registrars and one or more additional paying agents. The term “ Registrar ” includes any co-registrar, and the term “ Paying Agent ” includes any additional paying agent. The Issuer may change any Paying Agent or Registrar without prior notice to any Holder. The Issuer shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Issuer or any of its Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

The Issuer initially appoints The Depository Trust Company (“ DTC ”) to act as Depositary with respect to the Global Notes.

The Issuer initially appoints the Trustee to act as the Paying Agent and Registrar for the Notes and to act as Custodian with respect to the Global Notes.

Section 2.04.  Paying Agent to Hold Money in Trust .

The Issuer shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, or Additional Interest, if any, or interest on the Notes, and will notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary of the Issuer) shall have no further liability for the money. If the Issuer or a Subsidiary of the Issuer acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee shall serve as Paying Agent for the Notes.

Section 2.05.  Holder Lists .

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA

 

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Section 312(a). If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least two Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes, and the Issuer shall otherwise comply with TIA Section 312(a).

Section 2.06.  Transfer and Exchange.

(a) The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with Appendix A .

(b) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

(c) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Holders shall be required to pay any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).

(d) Neither the Registrar nor the Issuer shall be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

(e) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

(f) The Issuer shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between a Record Date and the next succeeding Interest Payment Date.

(g) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest (including Additional Interest, if any) on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.

(h) Upon surrender for registration of transfer of any Note at the office or agency of the Issuer designated pursuant to Section 4.02 hereof, the Issuer shall execute, and the Trustee shall authenticate and mail, in the name of the designated transferee or transferees, one or more replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.

(i) At the option of the Holder, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and mail, the

 

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replacement Global Notes and Definitive Notes which the Holder making the exchange is entitled to in accordance with the provisions of Section 2.02 hereof.

(j) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

Section 2.07.  Replacement Notes.

If any mutilated Note is surrendered to the Trustee, the Registrar or the Issuer and the Trustee receives evidence to its satisfaction of the ownership and destruction, loss or theft of any Note, the Issuer shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Issuer, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuer and the Trustee may charge for their expenses in replacing a Note.

Every replacement Note is a contractual obligation of the Issuer and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

Section 2.08.  Outstanding Notes.

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Note.

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.

If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

If the Paying Agent (other than the Issuer, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.

Section 2.09.  Treasury Notes.

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer, or by any Affiliate of the Issuer, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Trust Officer of the Trustee actually knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right to deliver any such direction, waiver or consent with respect to the Notes and that the pledgee is not the Issuer or any obligor upon the Notes or any Affiliate of the Issuer or of such other obligor.

 

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Section 2.10.  Temporary Notes.

Until certificates representing Notes are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Issuer considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes.

Holders and beneficial holders, as the case may be, of temporary Notes shall be entitled to all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this Indenture.

Section 2.11.  Cancellation.

The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee or, at the direction of the Trustee, the Registrar or the Paying Agent and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy cancelled Notes in accordance with its customary procedures (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all cancelled Notes shall upon the written request of the Issuer be delivered to the Issuer. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.

Section 2.12.  Defaulted Interest.

If the Issuer defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Issuer shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such defaulted interest as provided in this Section 2.12. The Trustee shall fix or cause to be fixed each such special record date and payment date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. The Trustee shall promptly notify the Issuer of such special record date. At least 15 days before the special record date, the Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) shall mail or cause to be mailed, first-class postage prepaid, to each Holder a notice at his or her address as it appears in the Note Register that states the special record date, the related payment date and the amount of such interest to be paid.

Subject to the foregoing provisions of this Section 2.12 and for greater certainty, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.

 

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Section 2.13.  CUSIP Numbers .

The Issuer in issuing the Notes may use CUSIP numbers (if then generally in use) and, if so, the Trustee shall use CUSIP numbers in notices of redemption as a convenience to Holders; provided , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will as promptly as practicable notify the Trustee in writing of any change in the CUSIP numbers.

Section 2.14.  Calculation of Principal Amount of Notes .

The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes at such date of determination. With respect to any matter requiring consent, waiver, approval or other action of the Holders of a specified percentage of the principal amount of all the Notes, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes, the Holders of which have so consented, by (b) the aggregate principal amount, as of such date of determination, of the Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.08 and Section 2.09 of this Indenture. Any such calculation made pursuant to this Section 2.14 shall be made by the Issuer and delivered to the Trustee pursuant to an Officer’s Certificate.

ARTICLE 3

REDEMPTION

Section 3.01.  Notices to Trustee.

If the Issuer elects to redeem Notes pursuant to Section 3.07 hereof, it shall furnish to the Trustee, at least 5 Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to Section 3.03 hereof but not more than 70 days before a redemption date, an Officer’s Certificate setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of the Notes to be redeemed and (iv) the redemption price.

Section 3.02.  Selection of Notes to Be Redeemed or Purchased.

If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee shall select the Notes to be redeemed or purchased (a) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed or (b) on a pro rata basis or, to the extent that selection on a pro rata basis is not practicable, by lot or by such other method the Trustee shall deem fair and appropriate in accordance with the procedures of DTC, and in each case, such manner as complies with applicable legal requirements. In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption or purchase.

The Trustee shall promptly notify the Issuer in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected shall be in

 

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amounts of $2,000 or whole multiples of $1,000 in excess thereof; no Notes of $2,000 or less shall be redeemed or purchased in part, except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1,000 in excess thereof, shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.

Section 3.03.  Notice of Redemption.

Subject to Section 3.09 hereof, the Issuer shall mail or cause to be mailed by first-class mail, postage prepaid (or electronically transmit), notices of redemption at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at such Holder’s registered address or otherwise in accordance with the procedures of DTC, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 15 hereof. Except as set forth in Section 3.07 hereof, notices of redemption may not be conditional.

The notice shall identify the Notes to be redeemed and shall state:

(i) the redemption date;

(ii) the redemption price;

(iii) if any Note is to be redeemed in part only, the portion of the principal amount of that Note that is to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion of the original Note representing the same indebtedness to the extent not redeemed will be issued in the name of the Holder of the Notes upon cancellation of the original Note;

(iv) the name and address of the Paying Agent;

(v) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(vi) that, unless the Issuer defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;

(vii) the paragraph or subparagraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;

(viii) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes; and

(ix) if in connection with a redemption pursuant to Section 3.07(b) hereof, any condition to such redemption.

At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at the Issuer’s expense; provided that the Issuer shall have delivered to the Trustee, at least 5 Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to this Section 3.03 (unless a shorter notice shall be agreed to by the Trustee), an Officer’s

 

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Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

Section 3.04.  Effect of Notice of Redemption.

Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price (except as provided for in Section 3.07(b)). The notice, if mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note.

Section 3.05.  Deposit of Redemption or Purchase Price.

Prior to 10:00 a.m. (New York City time) on the redemption or purchase date, the Issuer shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued and unpaid interest (including Additional Interest, if any) on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest on, all Notes to be redeemed or purchased.

If the Issuer complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest to the redemption or purchase date shall be paid to the Person in whose name such Note was registered at the close of business on such Record Date. If any Note called for redemption or purchase shall not be so paid upon surrender for redemption or purchase because of the failure of the Issuer to comply with the preceding paragraph, interest (including Additional Interest, if any) shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest accrued to the redemption or purchase date not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

Section 3.06.  Notes Redeemed or Purchased in Part.

Upon surrender of a Note that is redeemed or purchased in part, the Issuer shall issue and the Trustee shall authenticate for the Holder at the expense of the Issuer a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered representing the same indebtedness to the extent not redeemed or purchased; provided that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. It is understood that, notwithstanding anything in this Indenture to the contrary, only an Authentication Order and not an Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate such new Note.

Section 3.07.  Optional Redemption.

(a) At any time and from time to time prior to April 15, 2013, the Issuer may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice mailed by first class mail to the registered address of each Holder (or electronically transmitted) or otherwise in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if

 

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any, to the date of redemption, subject to the rights of Holders of Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(b) At any time and from time to time on or prior to April 15, 2013, the Issuer may redeem in the aggregate up to 100% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent of the Issuer, in each case to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer from it, at a redemption price (expressed as a percentage of the principal amount thereof) of 113.375%, plus accrued and unpaid interest and Additional Interest, if any, to the date of redemption (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided, however, that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed (or electronically transmitted) to each Holder of Notes being redeemed and otherwise in accordance with the procedures set forth in this Indenture. Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

(c) Except pursuant to clauses (a) or (b) of this Section 3.07, the Notes will not be redeemable at the Issuer’s option prior to April 15, 2013.

(d) On or after April 15, 2013, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time, upon notice pursuant to Section 3.03 hereof at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable date of redemption, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on April 15 of each of the years indicated below:

 

Year

   Redemption
Price
 

2013

     106.688

2014

     104.458

2015 and thereafter

     100.000

(e) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

Section 3.08.  Mandatory Redemption.

The Issuer shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes.

Section 3.09.  Offers to Repurchase by Application of Excess Proceeds.

(a) In the event that, pursuant to Section 4.10 hereof, the Issuer shall be required to commence an Asset Sale Offer, it shall follow the procedures specified below.

(b) The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law

 

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(the “ Offer Period ”). No later than five Business Days after the termination of the Offer Period (the “ Purchase Date ”), the Issuer shall apply all Excess Proceeds (the “ Offer Amount ”) to the purchase of Notes and, if required, Senior Subordinated Pari Passu Indebtedness (on a pro rata basis, if applicable), or, if less than the Offer Amount has been tendered, all Notes and Senior Subordinated Pari Passu Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.

(c) If the Purchase Date is on or after a Record Date and on or before the related Interest Payment Date, any accrued and unpaid interest and Additional Interest, if any, up to but excluding the Purchase Date, shall be paid to the Person in whose name a Note is registered at the close of business on such Record Date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

(d) The Issuer shall send, by first-class mail (or electronic transmission) at least 30 but not more than 60 days before the Purchase Date, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders and holders of Senior Subordinated Pari Passu Indebtedness. The notice, which shall govern the terms of the Asset Sale Offer, shall state:

(1) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open;

(2) the Offer Amount, the purchase price and the Purchase Date;

(3) that any Note not tendered or accepted for payment shall continue to accrue interest;

(4) that, unless the Issuer defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Purchase Date;

(5) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in amounts of $2,000 or in integral multiples of $1,000 in excess thereof only;

(6) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Note completed, or transfer by book-entry transfer, to the Issuer, the Depositary, if appointed by the Issuer, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

(7) that Holders shall be entitled to withdraw their election if the Issuer, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

(8) that, if the aggregate principal amount of Notes and Senior Subordinated Pari Passu Indebtedness surrendered by the holders thereof exceeds the Offer Amount, the Trustee shall select the Notes and such Senior Subordinated Pari Passu Indebtedness

 

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to be purchased in compliance with the requirements of the principal national securities exchange, if any, on which such Notes are listed or, if such Notes are not so listed, on a pro rata basis, by lot or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies with applicable legal requirements) on a pro rata basis based on the accreted value or principal amount of the Notes or such Senior Subordinated Pari Passu Indebtedness tendered (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $2,000 or in integral multiples of $1,000 in excess thereof, shall be purchased); and

(9) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer) representing the same indebtedness to the extent not repurchased.

(e) On or before the Purchase Date, the Issuer shall, to the extent lawful, (1) accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof validly tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered and (2) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof so tendered.

(f) The Issuer, the Depositary or the Paying Agent, as the case may be, shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes properly tendered by such Holder and accepted by the Issuer for purchase, and the Issuer shall promptly issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and mail or deliver (or cause to be transferred by book-entry) such new Note to such Holder (it being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate and mail or deliver such new Note) in a principal amount equal to any unpurchased portion of the Note surrendered representing the same indebtedness to the extent not repurchased; provided , that each such new Note shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. Any Note not so accepted shall be promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer shall notify the Holders of the results of the Asset Sale Offer on or as soon as practicable after the Purchase Date.

Other than as specifically provided in this Section 3.09 or Section 4.10 hereof, any purchase pursuant to this Section 3.09 shall be made pursuant to the applicable provisions of Sections 3.01 through 3.06 hereof.

ARTICLE 4

COVENANTS

Section 4.01.  Payment of Notes.

The Issuer shall pay or cause to be paid the principal of, premium, if any, Additional Interest, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, Additional Interest, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Issuer or a Wholly Owned Subsidiary, holds as of noon Eastern Time on the due date money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, Additional Interest, if any, and interest then due.

 

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The Issuer shall pay all Additional Interest, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement.

The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest (without regard to any applicable grace period) at the same rate to the extent lawful.

Section 4.02.  Maintenance of Office or Agency.

The Issuer shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

Subject to the preceding paragraph, the Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency for such purposes. The Issuer shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Issuer hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Issuer in accordance with Section 2.03 hereof.

Section 4.03.  Reports and Other Information.

(a) Notwithstanding that the Issuer may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Issuer shall file with the SEC (and provide the Trustee and Holders with copies thereof by posting such information on its primary website),

(1) as soon as available and in any event on or before the date on which such reports would be required to be filed with the SEC (if the Issuer were a non-accelerated filer subject to Section 13 or 15(d) of the Exchange Act), annual reports on Form 10-K (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form),

(2) as soon as available and in any event on or before the date on which such reports would be required to be filed with the SEC (if the Issuer were a non-accelerated filer subject to Section 13 or 15(d) of the Exchange Act), reports on Form 10-Q (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form),

 

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(3) promptly from time to time after the occurrence of an event required to be therein reported (and in any event within the time period specified for filing current reports on Form 8-K by the SEC), reports on Form 8-K (or any successor or comparable form), and

(4) any other information, documents and other reports which the Issuer would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;

in each case in a manner that complies in all material respects with the requirements specified in such form.

Notwithstanding the foregoing, all required reports, information and documents referred to in this Section 4.03(a) shall be deemed to be delivered to the Trustee at the time when (i) the Issuer has filed such reports, information and documents with the SEC via the EDGAR filing system (or any successor system) and (ii) such reports are publicly available.

(b) If at any time any direct or indirect parent of the Issuer (x) becomes a Guarantor (there being no obligation of any parent to do so), (y) holds no material assets other than cash, Cash Equivalents and the Capital Stock of the Issuer or of any direct or indirect parent corporation of the Issuer (and performs the related incidental activities associated with such ownership) and (z) complies with the requirements of Rule 3-10 of Regulation S-X promulgated by the SEC (or any successor provision), the reports, information and other documents required to be filed and furnished to Holders of the Notes pursuant to this Section 4.03 may, at the option of the Issuer, be filed or furnished by and be those of such direct and indirect parent of the Issuer rather than the Issuer.

(c) The Issuer will make such information available to prospective investors upon request. In addition, the Issuer has agreed that, for so long as any Notes remain outstanding during any period when it is not subject to Section 13 or 15(d) of the Exchange Act, it will furnish to the Holders of the Notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(d) If the Issuer has designated any of its Subsidiaries as Unrestricted Subsidiaries and such Unrestricted Subsidiaries, either individually or collectively, would otherwise have been a Significant Subsidiary, then the quarterly and annual financial information required by this Section 4.03 shall include a reasonably detailed unaudited discussion (as determined in good faith by senior management of the Issuer) of the financial condition and results of operations of the Issuer and the Restricted Subsidiaries of the Issuer separate from the financial condition and results of operations of the Unrestricted Subsidiaries.

(e) Notwithstanding anything herein to the contrary, the Issuer will not be deemed to have failed to comply with any of its agreements under this Section 4.03 for purposes of Section 6.01(a)(4) until 120 days after the date any report hereunder is required to be filed with the SEC (or otherwise made available to Holders or the Trustee) pursuant to this Section 4.03.

Section 4.04.  Compliance Certificate.

The Issuer, Holdings and each Note Guarantor (to the extent that Holdings or such Note Guarantor is so required under the TIA) shall deliver to the Trustee, within 120 days after the end of each fiscal year ending after the Issue Date, a certificate from the principal executive officer, principal financial officer or principal accounting officer stating, as to such Officer signing such certificate, that to the best of his or her knowledge, the Issuer has complied with each and every condition and covenant contained in this Indenture and is not in default in the performance or observance of any of the terms,

 

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provisions, covenants and conditions of this Indenture (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action the Issuer is taking or proposes to take with respect thereto). The Issuer, Holdings and the Note Guarantors shall also comply with Section 314(a)(4) of the TIA.

Section 4.05.  Taxes.

The Issuer shall pay, and shall cause each of its Restricted Subsidiaries to pay, prior to delinquency, all material taxes, assessments and governmental levies except such as are contested in good faith and by appropriate negotiations or proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.

Section 4.06.  Stay, Extension and Usury Laws.

The Issuer, Holdings and each of the Note Guarantors covenant (to the extent that they may lawfully do so) that they shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer, Holdings and each of the Note Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant that they shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.

Section 4.07.  Limitation on Restricted Payments.

(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly:

(I) declare or pay any dividend or make any distribution on account of the Issuer’s or any of the Restricted Subsidiaries’ Equity Interests, including any payment made in connection with any merger, amalgamation or consolidation involving the Issuer other than:

(A) dividends or distributions by the Issuer payable solely in Equity Interests (other than Disqualified Stock) of the Issuer; or

(B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, the Issuer or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities;

(II) purchase or otherwise acquire or retire for value any Equity Interests of the Issuer or any direct or indirect parent of the Issuer, including in connection with any merger or consolidation;

(III) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of the Issuer or any Note Guarantor other than the payment, redemption, repurchase, defeasance, acquisition or retirement of:

 

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(A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement; and

(B) Indebtedness permitted under clauses (7) and (9) of Section 4.09(b); or

(IV) make any Restricted Investment (all such payments and other actions set forth in clauses (I) through (IV) above being collectively referred to as “ Restricted Payments ”), unless, at the time of such Restricted Payment:

(A) no Default shall have occurred and be continuing or would occur as a consequence thereof;

(B) immediately after giving effect to such transaction on a pro forma basis, the Issuer could Incur $1.00 of additional Indebtedness under Section 4.09(a); and

(C) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and the Restricted Subsidiaries after the Original Issue Date (including Restricted Payments permitted by clauses (1), (4) (only to the extent of one-half of the amounts paid pursuant to such clause), (6), (8) and (18) of Section 4.07(b), but excluding all other Restricted Payments permitted by Section 4.07(b), is less than the amount equal to the Cumulative Credit.

(b) The foregoing provisions of Section 4.07(a) hereof shall not prohibit:

(1) the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Indenture;

(2) (a) the redemption, repurchase, retirement or other acquisition of any Equity Interests (“ Retired Capital Stock ”) or Subordinated Indebtedness of the Issuer, any direct or indirect parent of the Issuer or any Note Guarantor in exchange for, or out of the proceeds of, the substantially concurrent sale of Equity Interests of the Issuer or any direct or indirect parent of the Issuer or contributions to the equity capital of the Issuer (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of the Issuer) (collectively, including any such contributions, “ Refunding Capital Stock ”); and (b) the declaration and payment of accrued dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of the Issuer) of Refunding Capital Stock and if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6) of this Section 4.07(b) and not made pursuant to this clause (2)(b), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent of the Issuer) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Retired Capital Stock immediately prior to such retirement;

(3) the redemption, repurchase, defeasance or other acquisition or retirement of Subordinated Indebtedness of the Issuer or any Note Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale (or as promptly as practicable after giving any requisite notice to the Holders of such Subordinated Indebtedness) of, new Indebtedness of the Issuer or a Note Guarantor that is Incurred in accordance with Section 4.09 so long as:

 

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(a) the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable), plus any accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired plus any tender premiums, defeasance costs or other fees and expenses incurred in connection therewith),

(b) such new Indebtedness is subordinated to the Notes or the related Note Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,

(c) such new Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) 91 days following the maturity date of the Notes, and

(d) such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired that were due on or after the date one year following the maturity date of any Notes then outstanding were instead due on such date one year following the maturity date of such Notes (provided that, in the case of this sub-clause (d)(y), such Indebtedness does not provide for any scheduled principal payments prior to the maturity date of the Notes in excess of, or prior to, the scheduled principal payments due prior to such maturity for the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased);

(4) a Restricted Payment to pay for the redemption, repurchase, retirement or other acquisition for value of Equity Interests of the Issuer or any direct or indirect parent of the Issuer held by any future, present or former employee, director or consultant of the Issuer or any direct or indirect parent of the Issuer or any Subsidiary of the Issuer pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided, however, that the aggregate amounts paid under this clause (4) do not exceed $30.0 million in any calendar year (with unused amounts in any calendar year being permitted to be carried over for the two succeeding calendar years subject to a maximum payment (without giving effect to the following proviso) of $60.0 million in any calendar year); provided, further, however, that such amount in any calendar year may be increased by an amount not to exceed:

(a) the cash proceeds received by the Issuer or any of the Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of the Issuer or any direct or indirect parent of the Issuer (to the extent contributed to the Issuer) to members of management, directors or consultants of the Issuer and the Restricted Subsidiaries or any direct or indirect parent of the Issuer that occurs after the Original Issue Date; plus

 

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(b) the cash proceeds of key man life insurance policies received by the Issuer or any direct or indirect parent of the Issuer (to the extent contributed to the Issuer) or the Restricted Subsidiaries after the Original Issue Date; less

(c) the amount of any Restricted Payments previously made pursuant to sub-clauses (a) and (b) of this second proviso of clause (4);

provided that the Issuer may elect to apply all or any portion of the aggregate increase contemplated by sub-clauses (a) and (b) above in any calendar year;

(5) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Issuer or any of the Restricted Subsidiaries issued or Incurred in accordance with Section 4.09;

(6) (a) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date, (b) a Restricted Payment to any direct or indirect parent of the Issuer, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent of the Issuer issued after the Issue Date and (c) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (2) of this paragraph; provided, however, that, (x) in the case of sub-clauses (a), (b) and (c) of this clause (6), for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or Refunding Capital Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis, the Issuer would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00 and (y) the aggregate amount of dividends declared and paid pursuant to sub-clauses (a) and (b) of this clause (6) does not exceed the net cash proceeds actually received by the Issuer from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date;

(7) Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (7) that are at that time outstanding, not to exceed the greater of $75.0 million and 0.625% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, that the dollar amount of Investments made pursuant to this clause (7) may be reduced by the Fair Market Value of the proceeds received by the Issuer and/or its Restricted Subsidiaries from the subsequent sale, disposition or other transfer of such Investments (with such Fair Market Value being measured at the time of such sale, disposition or other transfer without giving effect to subsequent changes in value);

(8) the payment of dividends on the Issuer’s common stock (or a Restricted Payment to any direct or indirect parent of the Issuer to fund the payment by such direct or indirect parent of the Issuer of dividends on such entity’s common stock) of up to 6.0% per annum of the net cash proceeds received (including, without limitation, contributions to the Issuer with the proceeds of sales of common stock of any direct or indirect parent) by the Issuer from any public offering of common stock of the Issuer or any direct or indirect parent of the Issuer;

(9) Restricted Payments that are made with Excluded Contributions;

 

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(10) other Restricted Payments in an aggregate amount taken together with all other Restricted Payments made pursuant to this clause (10) not to exceed the greater of $125.0 million and 1.00% of Total Assets at the time made; provided that the aggregate amount of Restricted Payments made pursuant to this clause (10) for Restricted Payments of the types described in clauses (I) and (II) of the definition of Restricted Payment shall not exceed $25.0 million;

(11) the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Issuer or a Restricted Subsidiary by, Unrestricted Subsidiaries;

(12) the payment of dividends or other distributions to any direct or indirect parent of the Issuer in amounts required for such parent to pay federal, state or local income taxes (as the case may be) imposed directly on such parent to the extent such income taxes are attributable to the income of the Issuer and the Restricted Subsidiaries (including, without limitation, by virtue of such parent being the common parent of a consolidated or combined tax group of which the Issuer and/or the Restricted Subsidiaries are members);

(13) the payment of any Restricted Payment, if applicable:

(a) in amounts required for any direct or indirect parent of the Issuer, if applicable, to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of the Issuer, if applicable, and general corporate overhead expenses of any direct or indirect parent of the Issuer, if applicable, in each case to the extent such fees and expenses are attributable to the ownership or operation of the Issuer, if applicable, and its Restricted Subsidiaries (provided, that for so long as such direct or indirect parent owns no assets other than the Equity Interests in the Issuer or another direct or indirect parent of the Issuer, such fees and expenses shall be deemed for purposes of this clause (13)(a) to be so attributable to such ownership or operation);

(b) in amounts required for any direct or indirect parent of the Issuer, if applicable, to pay interest and/or principal on Indebtedness that satisfies each of the following: (i) the proceeds of which have been contributed to the Issuer or any of the Restricted Subsidiaries and (ii) that has been guaranteed by, or is otherwise considered Indebtedness of, the Issuer Incurred in accordance with Section 4.09; and

(c) in amounts required for any direct or indirect parent of the Issuer to pay fees and expenses, other than to Affiliates of the Issuer, related to any unsuccessful equity or debt offering of such parent;

(14) Restricted Payments used to fund the Merger Transactions and the payment of fees and expenses incurred in connection with the Merger Transactions (including as a result of the cancellation or vesting of outstanding options and other equity-based awards in connection therewith) as described in the Existing Notes Offering Memorandum (including payments made pursuant to or as contemplated by the Merger Documents, whether payable on the Original Issue Date or thereafter) or owed by the Issuer, any direct or indirect parent of the Issuer or any Restricted Subsidiary to Affiliates, in each case to the extent permitted by Section 4.11; provided that payments to Affiliates due to the termination of the Management Fee Agreement or similar agreements shall be permitted by this clause (14) only to the extent such termination is attributable to an underwritten registered public offering of the common stock of the Issuer or any direct or indirect parent of the Issuer or to a Change of Control;

 

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(15) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(16) purchases of receivables pursuant to a Securitization Repurchase Obligation in connection with a Permitted Securitization Financing and the payment or distribution of Securitization Fees;

(17) Restricted Payments by the Issuer or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock or debt securities that are convertible into, or exchangeable for, Capital Stock of any such Person;

(18) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions described under, or provisions similar to those described under Sections 4.10 and 4.14; provided that a Change of Control Offer or Asset Sale Offer, as applicable, has been made and all Notes tendered by Holders of the Notes in connection with a Change of Control or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value;

(19) cash dividends or other distributions in respect of the Issuer’s Capital Stock used to, or the making of loans to any direct or indirect parent of the Issuer in order to, fund the payment of expenses of the type and in the amount described in clauses (3) and (5) of Section 4.11(b) to the extent that such amounts are not paid directly by the Issuer or any its Subsidiaries;

(20) the redemption, repurchase, defeasance or other acquisition or retirement of the Existing Senior Subordinated Notes and the related Existing Senior Subordinated Note Guarantees; provided that the aggregate amounts paid under this clause (20) do not exceed $50.0 million; and

(21) the redemption of the Convertible Notes and the related Convertible Note Guarantees not owned by the Apollo Sponsors upon a Qualified Public Offering (as defined in the Convertible Note Indenture) or at any time thereafter at a price equal to no greater than 90% of the principal amount thereof in accordance with the terms of the Convertible Note Indenture; provided that to the extent the Issuer uses the proceeds of the substantially concurrent sale of Equity Interests of the Issuer or any direct or indirect parent of the Issuer or contributions to the equity capital of the Issuer to redeem the Convertible Notes not owned by the Apollo Sponsors, such redemption shall be deemed to have been made pursuant to clause 2(a) above.

provided , however , that at the time of, and after giving effect to, any Restricted Payment permitted under clause (6), (7), (10), (11) or (14) (with respect to payments owed to the Sponsors or their Affiliates as permitted by Section 4.11) of this Section 4.07(b), no Default shall have occurred and be continuing or would occur as a consequence thereof.

(c) For the avoidance of doubt, payments made after the Original Issue Date of the Cendant Contingent Liabilities shall not be deemed Restricted Payments.

(d) The amount of any Restricted Payment (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Issuer or such Subsidiary, as the case may be, pursuant to the Restricted Payment. Except as otherwise provided herein, the Fair Market Value of any assets or securities that are required to be valued

 

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by this Section 4.07 will be determined in good faith by senior management or the Board of Directors of the Issuer.

(e) As of the Issue Date, all of the Issuer’s Subsidiaries will be Restricted Subsidiaries. The Issuer will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and the Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of “Investments.” Such designation will only be permitted if a Restricted Payment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

(f) Notwithstanding the foregoing, the Issuer will not, and will not permit any of the Restricted Subsidiaries to, pay any cash dividend or make any cash distribution on account of the Issuer’s Equity Interests or purchase for cash or otherwise redeem, acquire or retire for cash any Equity Interests of the Issuer or any direct or indirect parent of the Issuer or guarantee any Indebtedness of an Affiliate of the Issuer for the purposes of any of the foregoing, in each case for the benefit of the Sponsors, by means of (i) the application of the Cumulative Credit in accordance with the definition thereof and Section 4.07(a), (ii) utilization of clauses (1), (7), (10) or (11) of Section 4.07(b) or (iii) utilization of clauses (9), (10) or (18) of the definition of Permitted Investments, unless in each case at the time of such payment the Consolidated Leverage Ratio of the Issuer would have been equal to or less than 6.0 to 1.0 on a pro forma basis and otherwise in compliance with this Section 4.07.

Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries .

(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

(1) (A) pay dividends or make any other distributions to the Issuer or any of the Restricted Subsidiaries (i) on its Capital Stock or (ii) with respect to any other interest or participation in, or measured by, its profits or (B) pay any Indebtedness owed to the Issuer or any of the Restricted Subsidiaries;

(2) make loans or advances to the Issuer or any of the Restricted Subsidiaries; or

(3) sell, lease or transfer any of its properties or assets to the Issuer or any of the Restricted Subsidiaries.

(b) Section 4.08(a) hereof shall not apply to encumbrances or restrictions existing under or by reason of:

(1) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Credit Agreement and the other Credit Agreement Documents;

(2) the Extended Maturity Note Indentures and the Extended Maturity Notes and the Extended Maturity Notes Guarantees (and any exchange Extended Maturity Notes and guarantees thereof) and the Existing Indentures and the Existing Notes and the Existing Note Guarantees;

(3) applicable law or any applicable rule, regulation or order;

 

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(4) any agreement or other instrument of a Person acquired by the Issuer or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or its Subsidiaries, or the property or assets of the Person or its Subsidiaries, so acquired;

(5) contracts or agreements for the sale of assets, including restrictions with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition;

(6) Secured Indebtedness otherwise permitted to be Incurred pursuant to Sections 4.09 and 4.12 hereof that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(7) restrictions on cash or other deposits (including escrowed funds) or net worth imposed by customers and franchisees under contracts entered into in the ordinary course of business;

(8) customary provisions in joint venture agreements and other similar agreements relating solely to such joint venture entered into in the ordinary course of business;

(9) purchase money obligations and Capitalized Lease Obligations, in each case for property acquired or leased in the ordinary course of business that impose restrictions of the nature discussed in clause (3) of Section 4.08(a) above on the property so acquired or leased;

(10) customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business that impose restrictions of the type described in clause (3) of Section 4.08(a) above on the property subject to such lease;

(11) any encumbrance or restriction on a Special Purpose Securitization Subsidiary that, in the good faith judgment of senior management or the Board of Directors of the Issuer, is reasonably required in connection therewith; provided , however , that such restrictions apply only to Special Purpose Securitization Subsidiaries;

(12) other Indebtedness or Disqualified Stock of the Issuer or any of its Restricted Subsidiaries or Preferred Stock of any Non-Guarantor Subsidiary that is Incurred subsequent to the Issue Date and permitted pursuant to Section 4.09; provided that such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Issuer’s ability to make anticipated principal or interest payments on the Notes (as determined in good faith by senior management or the Board of Directors of the Issuer); or

(13) any encumbrances or restrictions of the type referred to in clauses (1), (2) and (3) of Section 4.08(a) imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (12) of this Section 4.08(b); provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of senior management or the Board of Directors of the Issuer, no more restrictive with respect to such encumbrances and other restrictions taken as a whole than those contained in the encumbrances or other restrictions prior

 

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to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

(c) For purposes of determining compliance with this Section 4.08, (1) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (2) the subordination of loans or advances made to the Issuer or a Restricted Subsidiary to other Indebtedness Incurred by the Issuer or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

Section 4.09. Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock .

(a) (1) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (2) the Issuer shall not permit any of the Non-Guarantor Subsidiaries to issue any shares of Preferred Stock; provided , however , that the Issuer and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Non-Guarantor Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Issuer for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided , further , that the amount of Indebtedness that may be Incurred and Disqualified Stock or Preferred Stock that may be issued in each case pursuant to the foregoing by Non-Guarantor Subsidiaries shall not exceed $300.0 million at any one time outstanding.

(b) The limitations set forth in Section 4.09(a) hereof shall not apply to:

(1) the Incurrence by the Issuer or the Restricted Subsidiaries of Indebtedness under the Credit Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $3,300.0 million at any one time outstanding, less all principal repayments of Indebtedness Incurred under this clause (1) with the Net Proceeds of Asset Sales utilized in accordance with Section 4.10(b)(1)(a) that permanently reduces the commitments thereunder;

(2) the Incurrence by the Issuer and the Note Guarantors of Indebtedness represented by the New Notes (not including any additional Extended Maturity Notes), the Extended Maturity Notes Guarantees and the Convertible Note Guarantees (including exchange Extended Maturity Notes and related guarantees thereof);

(3) Indebtedness of the Issuer and its Restricted Subsidiaries existing on the Original Issue Date (other than Indebtedness described in clause (1) of this Section 4.09(b) but including the Existing Notes and Existing Note Guarantees);

(4) (A) Indebtedness (including Capitalized Lease Obligations) Incurred by the Issuer or any of the Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of the Restricted Subsidiaries and Preferred Stock issued by any Non-Guarantor Subsidiaries to finance

 

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(whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) (whether through the direct purchase of property or the Capital Stock of any Person owning such property) and (B) Acquired Indebtedness, in an aggregate principal amount that, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (4), does not exceed $325.0 million;

(5) Indebtedness Incurred by the Issuer or any of the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;

(6) Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or acquisition price or similar obligations, in each case Incurred in connection with the Merger Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;

(7) Indebtedness of the Issuer to a Restricted Subsidiary; provided that, other than in the case of intercompany current liabilities Incurred in the ordinary course of business in connection with the cash management operations of the Issuer and its Subsidiaries to finance working capital needs of the Subsidiaries, any such Indebtedness owed to a Restricted Subsidiary that is not a Note Guarantor is expressly subordinated (if legally permissible) in right of payment to the obligations of the Issuer under the Notes; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (7);

(8) shares of Preferred Stock of a Non-Guarantor Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Non-Guarantor Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (8);

(9) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that, other than in the case of intercompany current liabilities Incurred in the ordinary course of business in connection with the cash management operations of the Issuer and its Subsidiaries to finance working capital needs of its Subsidiaries, if a Note Guarantor incurs such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that is not a Note Guarantor, such Indebtedness is expressly subordinated (if legally permissible) in right of payment to the Note Guarantee of such Note Guarantor; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted

 

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Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (9);

(10) Hedging Obligations that are not incurred for speculative purposes and are either (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; (C) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales; or (D) any combination of the foregoing;

(11) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Issuer or any Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice;

(12) Indebtedness or Disqualified Stock of the Issuer or any Restricted Subsidiary and Preferred Stock of any Non-Guarantor Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and deemed Incurred pursuant to this clause (12), does not exceed $325.0 million; provided that the aggregate principal amount or liquidation preference of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued, as the case may be, under this clause (12) by Non-Guarantor Subsidiaries shall not exceed $50.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (12) shall cease to be deemed Incurred or outstanding for purposes of this clause (12) but shall be deemed Incurred for purposes of Section 4.09(a) from and after the first date on which the Issuer, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.09(a) without reliance upon this clause (12));

(13) any guarantee by (x) the Issuer or a Note Guarantor of Indebtedness or other obligations of the Issuer or any of the Restricted Subsidiaries, (y) a Foreign Subsidiary of Indebtedness or other obligations of another Foreign Subsidiary or (z) a Non-Guarantor Subsidiary of Indebtedness or other obligations of another Non-Guarantor Subsidiary, in each case so long as the Incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of the Issuer or such Note Guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Notes (in the case of a guarantee by the Issuer) or to such Note Guarantor’s Note Guarantee (in the case of a guarantee by a Note Guarantor) substantially to the same extent as such Indebtedness is subordinated to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable;

(14) the Incurrence by the Issuer or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or the Incurrence by a Non-Guarantor Subsidiary of Preferred Stock that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.09(a) and clauses (2), (3), (4), (14), (15), (19) and (20) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums

 

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(including tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “ Refinancing Indebtedness ”) prior to its respective maturity; provided , however , that such Refinancing Indebtedness:

 

  (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the maturity date of any Notes then outstanding were instead due on such date one year following the maturity date of such Notes ( provided that any Refinancing Indebtedness Incurred in reliance on this sub-clause (A)(y) does not provide for any scheduled principal payments prior to the maturity date of the Notes in excess of, or prior to, the scheduled principal payments due prior to such maturity for the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased);

 

  (B) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or defeased or (y) 91 days following the maturity date of the Notes;

 

  (C) to the extent such Refinancing Indebtedness refinances (i) Indebtedness junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock, as the case may be;

 

  (D) is Incurred in an aggregate amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premiums (including tender premiums), expenses, defeasance costs and fees Incurred in connection with such refinancing;

 

  (E) shall not include (x) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that is not a Note Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary that is a Note Guarantor, or (y) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and

 

  (F) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (4), (19) or (20), shall be deemed to have been Incurred and to be outstanding under such clause (4), (19) or (20), as applicable, and not this clause (14) for purposes of determining amounts outstanding under such clauses (4), (19) and (20);

and provided , further , that sub-clauses (A) and (B) of this clause (14) shall not apply to any refunding, refinancing or defeasance of any Senior Indebtedness.

 

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(15) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Issuer or any of the Restricted Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any of the Restricted Subsidiaries or merged or amalgamated with or into the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided , however , that after giving effect to such acquisition, merger or amalgamation and the Incurrence of such Indebtedness either:

 

  (1) the Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a); or

 

  (2) the Fixed Charge Coverage Ratio of the Issuer would be equal to or greater than immediately prior to such acquisition, merger or amalgamation;

(16) [Reserved];

(17) Indebtedness (x) arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business or other cash management services in the ordinary course of business; provided , that (i) such Indebtedness (other than credit or purchase cards) is extinguished within ten Business Days of notification to the Issuer of its incurrence and (ii) such Indebtedness in respect of credit or purchase cards is extinguished within 60 days from its Incurrence and (y) in respect of cash management lines or facilities so long as the Indebtedness deemed Incurred pursuant to this clause (17)(y) does not exceed $50.0 million at any one time outstanding;

(18) Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit or bank guarantee;

(19) Indebtedness or Disqualified Stock of the Issuer or any Restricted Subsidiary and Preferred Stock of any Non-Guarantor Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference not exceeding at any time outstanding 200% of the net cash proceeds received by the Issuer and the Restricted Subsidiaries since immediately after the Original Issue Date from the issue or sale of Equity Interests of the Issuer or any direct or indirect parent entity of the Issuer (which proceeds are contributed to the Issuer or a Restricted Subsidiary) or cash contributed to the capital of the Issuer (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, the Issuer or any of its Subsidiaries), as determined in accordance with clauses (2) and (3) of the definition of Cumulative Credit, to the extent such net cash proceeds or cash have not been applied to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);

(20) Indebtedness of Foreign Subsidiaries; provided , however , that the aggregate principal amount of Indebtedness Incurred under this clause (20), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (20), does not exceed the greater of $100.0 million at any one time outstanding and 0.75% of Total Assets at the time of Incurrence (it being understood that any Indebtedness Incurred under this clause (20) shall cease to be deemed Incurred or outstanding for purposes of this clause (20) but shall be deemed Incurred for purposes of Section 4.09(a) from and after the first date on which the Foreign Subsidiary could have Incurred such Indebtedness under Section 4.09(a), and the other provisions of this Indenture, without reliance upon this clause (20));

 

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(21) Indebtedness of the Issuer or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;

(22) Indebtedness Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Issuer or any Restricted Subsidiary not in excess of the greater of $50.0 million at any one time outstanding and 0.5% of Total Assets at the time of Incurrence;

(23) Indebtedness issued by the Issuer or a Restricted Subsidiary to current or former officers, directors and employees thereof or any direct or indirect parent thereof, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer or any of its direct or indirect parent companies to the extent permitted under Section 4.07(b)(4);

(24) Indebtedness in respect of letters of credit issued under the Credit Agreement to support Contingent Obligations of the Issuer and the Restricted Subsidiaries arising under the Separation and Distribution Agreement not to exceed $300.0 million (including any refinancing thereof under the Credit Agreement);

(25) Indebtedness representing deferred compensation or other similar arrangements to employees and directors of the Issuer or any Subsidiary Incurred in the ordinary course of business or in connection with the Merger Transactions, an acquisition or any other Permitted Investment;

(26) Indebtedness of the Issuer or any Restricted Subsidiary in respect of Arbitrage Programs in an aggregate principal amount not to exceed the sum of (i) $10 million and (ii) the aggregate amount of Permitted Investments related thereto from time to time made after the Original Issue Date; and

(27) Indebtedness of the Issuer or any Restricted Subsidiary assumed in connection with the acquisition of homes and related assets in the ordinary course of its relocation services business, which Indebtedness in each case exists at the time of such acquisition and is not created in contemplation of such event.

For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (1) through (27) above or is entitled to be Incurred pursuant to Section 4.09(a), the Issuer shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section 4.09 and the other provisions of this Indenture; provided that (A) all Indebtedness under the Credit Agreement outstanding on the Issue Date (except for Indebtedness outstanding under the Delayed Draw Term Loan, which Delayed Draw Term Loan shall be deemed to have been Incurred on the Issue Date pursuant to clause (14) above as Refinancing Indebtedness in respect of Secured Indebtedness existing on the Original Issue Date and permitted under clause (3) above) shall be deemed to have been Incurred on the Issue Date pursuant to clause (1) above and the Issuer shall not be permitted to later reclassify all or any portion of such Indebtedness under the Credit Agreement outstanding on the Issue Date, (B) the Issuer shall not be permitted to later reclassify or divide all or any portion of the Indebtedness Incurred pursuant to clause (24) above and (C) all Indebtedness outstanding on the Issue Date and Incurred on or after the Original Issue Date that was permitted under the Existing Indentures prior to the Issue Date pursuant to a clause corresponding to any of clauses (4), (12), (17)(y), (19), (20), (22), (24) or (26) above shall be deemed to

 

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have been Incurred and outstanding on the Issue Date pursuant to the corresponding clause above. Accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness with the same terms (including pay-in-kind payments with respect to the Existing Senior Toggle Notes), the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.09. Note Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.09.

For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.

The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

Section 4.10. Asset Sales .

(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, cause or make an Asset Sale, unless:

(1) the Issuer or any of the Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by senior management or the Board of Directors of the Issuer) of the assets sold or otherwise disposed of; and

(2) at least 75% of the consideration therefor received by the Issuer or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided that the amount of:

(A) any liabilities (as shown on the Issuer’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of the Issuer or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Note Guarantee) (x) that are assumed by the transferee of any such assets and from which the Issuer and all of its Restricted Subsidiaries have been validly released by all creditors in writing or (y) in respect of which neither the Issuer nor any Restricted Subsidiary following such Asset Sale has any obligation,

 

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(B) any notes or other obligations or other securities or assets received by the Issuer or such Restricted Subsidiary from such transferee that are converted by the Issuer or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received), and

(C) any Designated Non-cash Consideration received by the Issuer or any of the Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by senior management or the Board of Directors of the Issuer), taken together with all other Designated Non-cash Consideration received pursuant to this clause (C) that is at that time outstanding, not to exceed the greater of (x) 1.50% of Total Assets and (y) $175 million at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value),

shall be deemed to be Cash Equivalents for purposes of this Section 4.10(a).

(b) Within 450 days after the Issuer’s or any Restricted Subsidiary’s receipt of the Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary may apply the Net Proceeds from such Asset Sale, at its option:

(1) to repay (other than obligations in respect of a Permitted Securitization Financing) (a) Secured Indebtedness, including Indebtedness under the Credit Agreement (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), (b) Indebtedness of a Non-Guarantor Subsidiary, (c) Senior Indebtedness, or (d) Senior Subordinated Pari Passu Indebtedness (provided that if the Issuer or any Note Guarantor shall so reduce Obligations under unsecured Senior Subordinated Pari Passu Indebtedness, the Issuer will equally and ratably reduce Obligations under the Notes as provided in Section 3.07, through open market purchases (provided that such purchases are at or above 100% of the principal amount thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders of Notes to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, the pro rata principal amount of Notes), in each case other than Indebtedness owed to the Issuer or an Affiliate of the Issuer, or

(2) to make an investment in any one or more businesses ( provided that if such investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary), assets, or property or capital expenditures, in each case (a) used or useful in a Similar Business or (b) that replace the properties and assets that are the subject of such Asset Sale.

In the case of clause (2) of this Section 4.10(b), a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment; provided that in the event such binding commitment is later canceled or terminated for any reason before such Net Proceeds are so applied, the Issuer or such Restricted Subsidiary may satisfy its obligation as to any Net Proceeds by entering into another binding commitment within nine months of such cancellation or termination of the prior binding commitment; provided , further that the Issuer or such Restricted Subsidiary may only enter into such a commitment under the foregoing provision one time with respect to each Asset Sale. Pending the final application of any such Net Proceeds, the Issuer or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Proceeds in any manner not otherwise prohibited by this Indenture. Any Net Proceeds from any Asset Sale that are not

 

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applied as provided and within the time period set forth in the first sentence of this Section 4.10(b) (it being understood that any portion of such Net Proceeds used to make an offer to purchase Notes, as described in clause (1) of this Section 4.10(b), shall be deemed to have been invested within the meaning of the prior sentence whether or not such offer is accepted) will be deemed to constitute “ Excess Proceeds .” When the aggregate amount of Excess Proceeds exceeds $30.0 million, the Issuer shall make an offer to all Holders of Notes (and, at the option of the Issuer, to holders of any Senior Subordinated Pari Passu Indebtedness) (an “ Asset Sale Offer ”) to purchase the maximum principal amount of Notes (and such Senior Subordinated Pari Passu Indebtedness), that is at least $2,000 and an integral multiple of $1,000 that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Senior Subordinated Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and Additional Interest, if any (or, in respect of such Senior Subordinated Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture. The Issuer will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceeds $30.0 million by mailing or electronically transmitting the notice required pursuant to the terms of this Indenture, with a copy to the Trustee. To the extent that the aggregate amount of Notes (and such Senior Subordinated Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes or any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes (and such Senior Subordinated Pari Passu Indebtedness) surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes (and such Senior Subordinated Pari Passu Indebtedness) to be purchased in the manner described in Section 3.09. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. For purposes of this clause (b) and the preceding clause (a), the terms “Asset Sale” and “Net Proceeds” shall include any “Asset Sale” and “Net Proceeds”, respectively, as defined in the Existing Senior Subordinated Note Indenture as in effect immediately prior to the Issue Date.

(c) The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

Section 4.11. Transactions with Affiliates .

(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an “ Affiliate Transaction ”) involving aggregate consideration in excess of $20.0 million, unless:

(1) such Affiliate Transaction is on terms that are not materially less favorable to the Issuer or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person; and

(2) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $60.0 million, the Issuer delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of the

 

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Issuer approving such Affiliate Transaction and set forth in an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (1) of this Section 4.11(a).

(b) The provisions of Section 4.11(a) hereof shall not apply to the following:

(1) transactions between or among the Issuer and/or any of the Restricted Subsidiaries and any merger of the Issuer and any direct parent of the Issuer; provided that at the time of such merger such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of the Issuer and such merger is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose;

(2) Restricted Payments permitted by Section 4.07 hereof and the definition of “Permitted Investments”;

(3) (x) the entering into of the Management Fee Agreement (and any amendment or modification of such agreement) and the payment (whether before or after the Issue Date) of, annual management, consulting, monitoring and advisory fees to the Sponsors (A) in an aggregate amount in any fiscal year not to exceed the sum of (1) the greater of $15.0 million and 2.0% of EBITDA (as defined in the relevant agreement) for the immediately preceding year, plus out of pocket costs and expenses in connection therewith and unpaid amounts accrued for prior periods; plus (2) any deferred fees (to the extent such fees were within such amount in clause (A) (1) above originally), plus (B) 1.0% of the aggregate transaction value or enterprise value with respect to transactions in which the Sponsors provide any transaction, advisory or other services and (y) the payment of the present value of all future amounts payable pursuant to any agreement referred to in clause (3)(x) above in connection with the termination of such agreement;

(4) the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Issuer or any Restricted Subsidiary or any direct or indirect parent of the Issuer;

(5) payments by the Issuer or any of the Restricted Subsidiaries to the Sponsors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, which payments are (x) made pursuant to the Management Fee Agreement or (y) approved by a majority of the Board of Directors (or a majority of the disinterested directors serving on the Board of Directors) of the Issuer in good faith;

(6) transactions in which the Issuer or any of the Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (1) of the preceding paragraph;

(7) payments or loans (or cancellation of loans) to directors, officers, employees or consultants that are approved by a majority of the Board of Directors of the Issuer in good faith;

(8) any agreement as in effect as of the Issue Date or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the Holders of the Notes in any material respect than the original agreement as in effect on the Issue Date) or any transaction contemplated thereby as determined in good faith by senior management or the Board of Directors of the Issuer;

 

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(9) the existence of, or the performance by the Issuer or any of the Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, and any agreement described in the Offering Memorandum under the heading “Certain Relationships and Related Transactions”, and, in each case, any amendment thereto or similar agreements that it may enter into thereafter; provided, however, that the existence of, or the performance by the Issuer or any of the Restricted Subsidiaries of its obligations under, any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (9) to the extent that the terms of any such existing agreement together with all amendments thereto, taken as a whole, or any such new agreement are not otherwise more disadvantageous to the Holders of the Notes in any material respect than the original agreement as in effect on the Issue Date;

(10) the execution of the Existing Notes Exchange Offers and the issuance of the Extended Maturity Notes pursuant to the Extended Maturity Note Indentures (and any amendment or modification thereto) and Convertible Notes pursuant to the Convertible Note Indenture (and any amendment or modification thereto) and the payment of any amounts pursuant to each of the Extended Maturity Note Indentures and the Convertible Note Indenture;

(11) transactions with joint ventures, customers, clients, suppliers or purchasers or sellers of goods or services or equipment, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture, which are fair to the Issuer and the Restricted Subsidiaries in the reasonable determination of the Board of Directors or the senior management of the Issuer, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(12) transactions pursuant to any Permitted Securitization Financing;

(13) the issuance of Equity Interests (other than Disqualified Stock) of the Issuer to any Person;

(14) the issuances of securities or the making of other payments, loans (or cancellation of loans), awards or grants in cash, securities or otherwise pursuant to, or the funding of or the entering into of, employment agreements or arrangements (including severance or termination provisions), stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of the Issuer or any direct or indirect parent of the Issuer or of a Restricted Subsidiary, as appropriate, in good faith;

(15) the entering into of any tax sharing agreement or arrangement and any payments permitted by clause (12) of Section 4.07(b);

(16) any contribution to the capital of the Issuer;

(17) transactions permitted by, and complying with, the provisions of Section 5.01;

(18) transactions between the Issuer or any of the Restricted Subsidiaries and any Person, a director of which is also a director of the Issuer or any direct or indirect parent of the Issuer; provided , however , that such director abstains from voting as a director of the Issuer or such direct or indirect parent, as the case may be, on any matter involving such other Person;

(19) pledges of Equity Interests of Unrestricted Subsidiaries; and

 

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(20) intercompany transactions undertaken in good faith (as certified by a responsible financial or accounting officer of the Issuer in an Officer’s Certificate) for the purpose of improving the consolidated tax efficiency of the Issuer and its Subsidiaries and not for the purpose of circumventing any covenant set forth in this Indenture.

Section 4.12. Liens .

The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer to exist any Lien on any asset or property of the Issuer or such Restricted Subsidiary securing Indebtedness unless the Notes or, in respect of Liens on any asset or property of a Restricted Subsidiary, any Note Guarantee of such Restricted Subsidiary, are equally and ratably secured with (or on a senior basis to, in the case of obligations subordinated in right of payment to the Notes or the Note Guarantees, as the case may be) the obligations so secured until such time as such obligations are no longer secured by a Lien. The preceding sentence shall not require the Issuer or any Restricted Subsidiary to secure the Notes if the Lien consists of a Permitted Lien. Any Lien that is granted to secure the Notes or such Note Guarantee under this Section 4.12 shall be automatically released and discharged at the same time as the release of the Lien that gave rise to the obligation to secure the Notes or such Note Guarantee under Section 4.12.

Section 4.13. Corporate Existence .

Subject to Article 5 hereof, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence and the corporate, partnership, limited liability company or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Issuer or any such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Issuer and its Restricted Subsidiaries; provided that the Issuer shall not be required to preserve any such right, license or franchise, or the corporate, partnership, limited liability company or other existence of any of its Restricted Subsidiaries, if the Issuer in good faith shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer and its Restricted Subsidiaries, taken as a whole.

Section 4.14. Offer to Repurchase Upon Change of Control .

(a) Upon a Change of Control, each Holder shall have the right to require the Issuer to repurchase all or any part of such Holder’s Notes at a purchase price in cash (the “ Change of Control Payment ”) equal to 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase (subject to the right of the Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), in accordance with the terms contemplated in this Section 4.14; provided , however , that notwithstanding the occurrence of a Change of Control, the Issuer shall not be obligated to purchase any Notes pursuant to this Section 4.14 in the event that the Issuer has exercised its right to redeem such Notes in accordance with Section 3.07 of this Indenture. In the event that at the time of such Change of Control the terms of the Bank Indebtedness and/or other Senior Indebtedness restrict or prohibit the repurchase of Notes pursuant to this Section 4.14, then prior to the mailing or transmission of the notice to the Holders provided for in Section 4.14(b) but in any event within 30 days following any Change of Control, the Issuer shall (i) repay in full all Bank Indebtedness and/or such other Senior Indebtedness or, if doing so will allow the purchase of Notes, offer to repay in full all Bank Indebtedness and/or such other Senior Indebtedness and repay the Bank Indebtedness and/or such other Senior Indebtedness of each lender or holder, as the case may be, who has accepted such offer, or (ii) obtain the requisite consent under the agreements governing the Bank

 

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Indebtedness and/or such other Senior Indebtedness to permit the repurchase of the Notes as provided for in Section 4.14(b).

(b) Within 30 days following any Change of Control, except to the extent that the Issuer has exercised its right to redeem the Notes in accordance with Section 3.07 of this Indenture, the Issuer shall mail or electronically transmit a notice (a “ Change of Control Offer ”) to each Holder to the address of such Holder appearing in the Note Register with a copy to the Trustee, or otherwise in accordance with the procedures of DTC, with the following information:

(1) that a Change of Control has occurred and that such Holder has the right to require the Issuer to repurchase such Holder’s Notes at a repurchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase (subject to the right of Holders of record on a Record Date to receive interest on the relevant Interest Payment Date);

(2) the circumstances and relevant facts and financial information regarding such Change of Control;

(3) the repurchase price and the repurchase date, (which shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed or electronically transmitted) (the “ Change of Control Payment Date ”);

(4) that any Note not properly tendered will remain outstanding and continue to accrue interest;

(5) that unless the Issuer defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;

(6) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, to the Paying Agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(7) that Holders shall be entitled to withdraw their tendered Notes and their election to require the Issuer to purchase such Notes; provided that the Paying Agent receives, not later than the close of business on the 30th day following the date of the Change of Control notice, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder of the Notes, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;

(8) that if the Issuer is redeeming less than all of the Notes, the Holders of the remaining Notes will be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered; the unpurchased portion of the Notes must be equal to $2,000 or an integral multiple of $1,000 in excess thereof; and

(9) the other instructions, as determined by the Issuer, consistent with this Section 4.14, that a Holder must follow in order to have its Notes purchased.

 

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The notice, if mailed or electronically transmitted in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. If (a) the notice is mailed or electronically transmitted in a manner herein provided and (b) any Holder fails to receive such notice or a Holder receives such notice but it is defective, such Holder’s failure to receive such notice or such defect shall not affect the validity of the proceedings for the purchase of the Notes as to all other Holders that properly received such notice without defect. The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Indenture by virtue thereof.

(c) On the Change of Control Payment Date, the Issuer shall, to the extent permitted by law,

(1) accept for payment all Notes issued by it or portions thereof properly tendered pursuant to the Change of Control Offer;

(2) deposit with the Paying Agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered; and

(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Issuer.

(d) The Issuer shall not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.14 applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

(e) Notes repurchased by the Issuer pursuant to a Change of Control Offer will have the status of Notes issued but not outstanding or will be retired and canceled at the option of the Issuer. Notes purchased by a third party pursuant to the preceding clause (d) will have the status of Notes issued and outstanding.

(f) Other than as specifically provided in this Section 4.14, any purchase pursuant to this Section 4.14 shall be made pursuant to the provisions of Sections 3.02, 3.05 and 3.06 hereof.

Section 4.15. Future Note Guarantors .

The Issuer shall cause each Restricted Subsidiary that is a Domestic Subsidiary (unless such Subsidiary is already a Note Guarantor, or is a Special Purpose Securitization Subsidiary, an Insurance Subsidiary, a Qualified CFC Holding Company or a Domestic Subsidiary that is Wholly Owned by one or more Foreign Subsidiaries and created to enhance the tax efficiency of the Issuer and its Subsidiaries) that:

 

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(a) guarantees any Indebtedness of the Issuer or any of the Note Guarantors on the Issue Date or at any time thereafter, or

(b) Incurs any Indebtedness or issues any shares of Disqualified Stock permitted to be Incurred or issued pursuant to clause (1) of Section 4.09(b), to execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit D pursuant to which such Restricted Subsidiary will become a Note Guarantor. In addition, if requested by the Trustee, such Restricted Subsidiary shall deliver to the Trustee an Opinion of Counsel to the effect that:

(1) such Note Guarantee has been duly executed and authorized; and

(2) such Note Guarantee constitutes a valid, binding and enforceable obligation of such Restricted Subsidiary, except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without limitation, all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principles of equity.

Section 4.16. Limitation on Repayments of Existing Notes .

Notwithstanding anything to the contrary herein, the Issuer shall not, and shall not permit any of its Restricted Subsidiaries to make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case, any Existing Notes of the Issuer prior to April 15, 2012, in the case of the Existing Senior Notes, and April 15, 2013, in the case of the Existing Senior Subordinated Notes; provided that the repurchase, redemption or other acquisition or retirement for value of any Existing Notes pursuant to Sections 4.10 and 4.14 of each of the Existing Senior Note Indentures and the Existing Senior Subordinated Note Indenture shall be permitted, so long as a Change of Control Offer or Asset Sale Offer, as applicable, has been made and the Notes tendered by Holders in connection with a Change of Control or Asset Sale Offer, as applicable, have been repurchased in accordance with the terms of this Indenture.

Section 4.17. Limitation on Other Senior Subordinated Indebtedness .

The Issuer shall not, and shall not permit any Note Guarantor to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) that is subordinate in right of payment to any Indebtedness of the Issuer or any Indebtedness of any such Note Guarantor, as the case may be, unless such Indebtedness is either:

(i) pari passu in right of payment with the Notes or such Note Guarantor’s Note Guarantee, as the case may be, or

(ii) expressly subordinated in right of payment to the Notes or such Note Guarantor’s Note Guarantee, as the case may be.

Section 4.18. Suspension of Certain Covenants .

(a) Following the first day (the “Suspension Date”) that:

(1) the Notes have Investment Grade Ratings from both Rating Agencies, and the Issuer has delivered written notice of such Investment Grade Ratings to the Trustee, and

(2) no Default has occurred and is continuing under this Indenture,

 

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then, beginning on that date, the Issuer and the Restricted Subsidiaries will not be subject to Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.14, 4.15 and 4.17 and Section 5.01(a)(4) (collectively, the “ Suspended Covenants ”).

(b) In the event that the Issuer and the Restricted Subsidiaries are not subject to the Suspended Covenants for any period of time as a result of the foregoing, and on any subsequent date (the “ Reversion Date ”) (1) one or both of the Rating Agencies withdraws their Investment Grade Rating or downgrades the rating assigned to the Notes below an Investment Grade Rating and/or (2) the Issuer or any of its Affiliates enters into an agreement to effect a transaction that would result in a Change of Control and one or more of the Rating Agencies indicate that if consummated, such transaction (alone or together with any related recapitalization or refinancing transactions) would cause such Rating Agency to withdraw its Investment Grade Rating or downgrade the ratings assigned to the Notes below an Investment Grade Rating, then the Issuer and the Restricted Subsidiaries shall thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events, including, without limitation, a proposed transaction described in clause (b)(2) above. The period of time between the Suspension Date and the Reversion Date is referred to herein as the “ Suspension Period .”

(c) Notwithstanding that the Suspended Covenants may be reinstated, no Default shall be deemed to have occurred as a result of a failure to comply with the Suspended Covenants during the Suspension Period. During any Suspension Period, the Issuer may not designate any Subsidiary as an Unrestricted Subsidiary unless the Issuer would have been permitted to designate such Subsidiary to be an Unrestricted Subsidiary if a Suspension Period had not been in effect for any period.

(d) On the Reversion Date, all Indebtedness Incurred during the Suspension Period shall be classified to have been Incurred pursuant to Section 4.09(a) or one of the clauses set forth in Section 4.09(b) (in each case, to the extent such Indebtedness would be permitted to be Incurred thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred prior to the Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness would not be so permitted to be Incurred pursuant to Section 4.09(a) or Section 4.09(b), such Indebtedness shall be deemed to have been outstanding on the Original Issue Date, so that it is classified as permitted under Section 4.09(b)(3). For purposes of Section 4.15, all Indebtedness Incurred during the Suspension Period and outstanding on the Reversion Date by any Restricted Subsidiary that is not a Note Guarantor will be deemed to have been Incurred on the Reversion Date. Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 4.07 shall be made as though Section 4.07 had been in effect since the Original Issue Date and throughout the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period shall reduce the amount available to be made as Restricted Payments under Section 4.07(a) and the items specified in clauses (1) through (6) of the definition of “Cumulative Credit” shall increase the amount available to be made as Restricted Payments under Section 4.07(a). For purposes of determining compliance with Section 4.10, on the Reversion Date, the Net Proceeds from all Asset Sales not applied in accordance with Section 4.10 shall be deemed to be reset to zero.

ARTICLE 5

SUCCESSORS

Section 5.01. Merger, Amalgamation Consolidation or Sale of All or Substantially All Assets .

(a) The Issuer shall not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up or convert into (whether or not the Issuer is the surviving Person), or sell, assign, transfer,

 

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lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless:

(1) the Issuer is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than the Issuer) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Issuer or such Person, as the case may be, being herein called the “ Successor Company ”); provided that in the case where the surviving Person is not a corporation, a co-obligor of the Notes is a corporation;

(2) the Successor Company (if other than the Issuer) expressly assumes all the obligations of the Issuer under this Indenture and the Notes pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(3) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Company or any of the Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing;

(4) immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period (and treating any Indebtedness that becomes an obligation of the Successor Company or any of the Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), either

(A) the Successor Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a), or

(B) the Fixed Charge Coverage Ratio for the Successor Company and the Restricted Subsidiaries would be greater than or equal to such ratio for the Issuer and the Restricted Subsidiaries immediately prior to such transaction;

(5) if the Successor Company is not the Issuer, each Note Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Note Guarantee shall apply to such Person’s obligations under this Indenture and the Notes; and

(6) the Successor Company (if other than the Issuer) shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation merger or transfer and such supplemental indentures (if any) comply with this Indenture.

Notwithstanding the foregoing clauses (3) and (4) of this Section 5.01(a), (a) subject to the restrictions on Note Guarantors described in Section 5.01(b), any Restricted Subsidiary may merge, consolidate or amalgamate with or transfer all or part of its properties and assets to the Issuer or to another Restricted Subsidiary, and (b) the Issuer may merge, consolidate or amalgamate with an Affiliate incorporated solely for the purpose of reincorporating the Issuer in another state of the United States, the District of Columbia

 

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or any territory of the United States or may convert into a limited liability company (provided that a co-obligor of the Notes is a corporation), so long as the amount of Indebtedness, Disqualified Stock and Preferred Stock of the Issuer and the Restricted Subsidiaries is not increased thereby (any transaction described in this sentence a “ Specified Merger/Transfer Transaction ”). This Section 5.01 will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among the Issuer and the Restricted Subsidiaries.

(b) Subject to the provisions of Section 11.06, each Note Guarantor will not, and the Issuer will not permit any Note Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Note Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(1) either (a) such Note Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Note Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Note Guarantor or such Person, as the case may be, being herein called the “ Successor Note Guarantor ”) and the Successor Note Guarantor (if other than such Note Guarantor) expressly assumes all the obligations of such Note Guarantor under this Indenture and such Note Guarantor’s applicable Note Guarantee pursuant to a supplemental indenture or other documents or instruments in form reasonably satisfactory to the Trustee, or (b) such sale or disposition or consolidation, amalgamation or merger is not in violation of Section 4.10;

(2) the Successor Note Guarantor (if other than such Note Guarantor) shall have delivered or caused to be delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with this Indenture; and

(3) immediately after such transaction, no Default or Event of Default exists.

Notwithstanding the foregoing, (1) a Note Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating such Note Guarantor in another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness, Preferred Stock and Disqualified Stock of the Note Guarantor is not increased thereby and (2) a Note Guarantor may merge, amalgamate or consolidate with another Note Guarantor or the Issuer.

In addition, notwithstanding the foregoing, any Note Guarantor may consolidate, amalgamate or merge with or into or wind up into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a “ Transfer ”) to (x) the Issuer or any Note Guarantor or (y) any Restricted Subsidiary that is not a Note Guarantor; provided that at the time of each such Transfer pursuant to clause (y) the aggregate amount of all such Transfers since the Original Issue Date shall not exceed the greater of $625.0 million and 5.0% of Total Assets after giving effect to each such Transfer and including all Transfers occurring from and after the Original Issue Date (excluding Transfers in connection with the Merger Transactions).

(c) For purposes of this Section 5.01, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Issuer, which properties and assets, if held by the Issuer instead of such Subsidiaries, would constitute all

 

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or substantially all of the properties and assets of the Issuer on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Issuer.

Section 5.02. Successor Entity Substituted .

Upon any consolidation, amalgamation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Issuer in accordance with Section 5.01(a), the Successor Company (if other than the Issuer) will succeed to, and be substituted for, the Issuer under this Indenture and the Notes, and in such event the Issuer will automatically be released and discharged from its obligations under this Indenture and the Notes, but in the case of a lease of all or substantially all of its assets, the Issuer will not be released from the obligations to pay the principal of, interest and Additional Interest, if any, on the Notes. Upon any consolidation, amalgamation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of a Note Guarantor in accordance with Section 5.01(b), the Successor Note Guarantor (if other than such Note Guarantor) will succeed to, and be substituted for, such Note Guarantor under this Indenture and such Note Guarantor’s applicable Note Guarantee, and such Note Guarantor will automatically be released and discharged from its obligations under this Indenture and such Note Guarantor’s applicable Note Guarantee, but in the case of a lease of all or substantially all of its assets, the Note Guarantor will not be released from its obligations under the Note Guarantee.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01. Events of Default .

An “ Event of Default ” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1) a default in any payment of interest (including any Additional Interest) on any Note when the same becomes due and payable (whether or not prohibited by the subordination provisions of this Indenture), and such default continues for a period of 30 days,

(2) there is a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise (whether or not prohibited by the subordination provisions of this Indenture),

(3) the Issuer or any of the Restricted Subsidiaries fails to comply with its obligations under Section 5.01,

(4) the Issuer or any of the Restricted Subsidiaries fails to comply with any of its agreements in the Notes or this Indenture (other than those referred to in clause (1), (2) or (3) of this Section 6.01(a)) and such failure continues for 60 days after the notice specified below,

(5) the Issuer or any Significant Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to the Issuer or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of

 

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a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $100.0 million or its foreign currency equivalent,

(6) the Issuer, any Restricted Subsidiary that is a Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

(i) commences proceedings to be adjudicated bankrupt or insolvent;

(ii) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under applicable Bankruptcy law;

(iii) consents to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;

(iv) makes a general assignment for the benefit of its creditors; or

(v) generally is not paying its debts as they become due;

(7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief against the Issuer or any Restricted Subsidiary that is a Significant Subsidiary, in a proceeding in which the Issuer, any such Restricted Subsidiary that is a Significant Subsidiary, is to be adjudicated bankrupt or insolvent;

(ii) appoints a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or any Restricted Subsidiary that is a Significant Subsidiary, or for all or substantially all of the property of the Issuer or any Restricted Subsidiary that is a Significant Subsidiary; or

(iii) orders the liquidation of the Issuer or any Restricted Subsidiary that is a Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days; or

(8) the Issuer or any Significant Subsidiary fails to pay final judgments aggregating in excess of $100.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days following the entry thereof, or

(9) any Note Guarantee of a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms thereof) or any Note Guarantor that qualifies as a Significant Subsidiary (or one or more Note Guarantors that, taken together as of the date of the most recent audited financial statements of the Issuer, would constitute a Significant Subsidiary) denies or disaffirms its obligations under this Indenture or any Note Guarantee and such Default continues for 10 days after the notice specified below.

A Default under clause (4) above shall not constitute an Event of Default until the Trustee notifies the Issuer or the Holders of at least 25% in principal amount of the outstanding Notes notify the Issuer and the Trustee of the Default and the Issuer does not cure such Default within the time specified in clause (4)

 

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above after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a “Notice of Default.”

The Issuer shall deliver to the Trustee, within thirty (30) days after the occurrence thereof, written notice in the form of an Officer’s Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

Section 6.02. Acceleration .

(a) If an Event of Default (other than an Event of Default specified in clauses (6) or (7) of Section 6.01(a) with respect to the Issuer) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Notes, by notice to the Issuer may declare the principal of, premium, if any, and accrued but unpaid interest (including Additional Interest, if any) on all the Notes to be due and payable; provided , however , that so long as any Bank Indebtedness remains outstanding, no such acceleration shall be effective until the earlier of:

(i) five Business Days after the giving of written notice to the Issuer and the Representative under the Credit Agreement; and

(ii) the day on which any Bank Indebtedness is accelerated.

Upon such a declaration, such principal and interest (including Additional Interest, if any) shall be due and payable immediately. If an Event of Default specified in clauses (6) or (7) of Section 6.01(a) with respect to the Issuer occurs, the principal of, premium, if any, and interest (including Additional Interest, if any) on all the Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

In the event of any Event of Default specified in clause (5) of Section 6.01(a), such Event of Default and all consequences thereof (excluding, however, any resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders of the Notes, if within 20 days after such Event of Default arose the Issuer delivers an Officer’s Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of the Notes as described above be annulled, waived or rescinded upon the happening of any such events.

(b) Subject to Section 6.02(a), at any time after a declaration of acceleration with respect to the Notes, the Holders of a majority in principal amount of Notes may rescind and cancel such declaration and its consequences:

(1) if the rescission would not conflict with any judgment or decree;

(2) if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration;

(3) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid; and

 

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(4) if the Issuer has paid the Trustee its reasonable compensation and reimbursed the Trustee for its expenses, disbursements and advances.

No such rescission shall affect any subsequent Default or impair any right consequent thereto.

Section 6.03. Other Remedies .

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

Section 6.04. Waiver of Past Defaults .

Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences hereunder, except a continuing Default in the payment of the principal of, premium, if any, Additional Interest, if any, or interest on, any Note held by a non-consenting Holder (including in connection with an Asset Sale Offer or a Change of Control Offer); provided , subject to Section 6.02 hereof, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

Section 6.05. Control by Majority .

Subject to Sections 7.01(e), 7.02(f), 7.02(k) and 7.07, Holders of a majority in principal amount of the then total outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or that would involve the Trustee in personal liability.

Section 6.06. Limitation on Suits .

Subject to Section 6.07 hereof, no Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:

(1) such Holder has previously given the Trustee notice that an Event of Default is continuing;

(2) Holders of at least 25% in principal amount of the total outstanding Notes have requested the Trustee to pursue the remedy;

 

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(3) Holders of the Notes have offered the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(5) Holders of a majority in principal amount of the total outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

Section 6.07. Rights of Holders of Notes to Receive Payment .

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, and Additional Interest, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an Asset Sale Offer or a Change of Control Offer), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

Section 6.08. Collection Suit by Trustee .

If an Event of Default specified in Section 6.01(a)(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount of principal of, premium, if any, and Additional Interest, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.09. Restoration of Rights and Remedies .

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceedings, the Issuer, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding has been instituted.

Section 6.10. Rights and Remedies Cumulative .

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07 hereof, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 6.11. Delay or Omission Not Waiver .

 

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No delay or omission of the Trustee or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

Section 6.12. Trustee May File Proofs of Claim .

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Notes including Holdings and the Note Guarantors), their creditors or their property and shall be entitled and empowered to participate as a member in any official committee of creditors appointed in such matter and to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.13. Priorities .

If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:

(i) to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

(ii) to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, and Additional Interest, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and Additional Interest, if any, and interest, respectively; and

(iii) to the Issuer or to such party as a court of competent jurisdiction shall direct including Holdings or a Note Guarantor, if applicable.

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.13.

Section 6.14. Undertaking for Costs .

 

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In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.14 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

ARTICLE 7

TRUSTEE

Section 7.01. Duties of Trustee .

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of an Event of Default:

(1) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

(2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved in a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and

(3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.

 

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(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

(e) The Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of the Holders of the Notes unless the Holders have offered to the Trustee indemnity or security satisfactory to the Trustee against any loss, liability or expense.

(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

Section 7.02. Rights of Trustee.

(a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation. Any permissive right or authority granted to the Trustee shall not be construed as a mandatory duty.

(b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both subject to the other provisions of this Indenture. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer shall be sufficient if signed by an Officer of the Issuer. The Trustee shall have no duty to inquire as to the performance of the Issuer’s, Holdings’ or any Note Guarantor’s covenants herein.

(f) None of the provisions of this Indenture shall require the Trustee to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.

(g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the existence of a Default or Event of Default, the Notes and this Indenture.

 

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(h) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

(j) In the event the Issuer is required to pay Additional Interest, the Issuer will provide written notice to the Trustee of the Issuer’s obligation to pay Additional Interest no later than 15 days prior to the next Interest Payment Date, which notice shall set forth the amount of the Additional Interest to be paid by the Issuer. The Trustee shall not at any time be under any duty or responsibility to any Holders to determine whether the Additional Interest is payable and the amount thereof.

(k) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers or duties.

(l) The Trustee may request that the Issuer deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officer’s Certificate may be signed by any person authorized to sign an Officer’s Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.

(m) The permissive rights of the Trustee enumerated herein shall not be construed as duties.

Section 7.03. Individual Rights of Trustee.

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

Section 7.04. Trustee’s Disclaimer.

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuer’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

Section 7.05. Notice of Defaults.

If a Default occurs and is continuing and if it is actually known to a Trust Officer of the Trustee, the Trustee shall mail or electronically transmit to Holders of Notes a notice of the Default within

 

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the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default relating to the payment of principal, premium, if any, or interest on any Note, the Trustee may withhold from the Holders notice of any continuing Default if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. The Trustee shall not be deemed to know of any Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee and references a Default or Event of Default.

Section 7.06. Reports by Trustee to Holders of the Notes.

Within 60 days after each December 31, beginning with the December 31 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c).

A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Issuer and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA Section 313(d). The Issuer shall promptly notify the Trustee when the Notes are listed on any stock exchange and of any delisting thereof.

Section 7.07. Compensation and Indemnity.

The Issuer and the Note Guarantors, jointly and severally, shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as the parties shall agree in writing from time to time. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

The Issuer and the Note Guarantors, jointly and severally, shall indemnify the Trustee and any predecessor Trustee and their agents for, and hold the Trustee harmless against, any and all loss, damage, claims, liability or expense (including attorneys’ fees and including taxes (other than taxes based upon, measured by or determined by the income of the Trustee)) incurred by it in connection with the acceptance or administration of this trust and the performance of its duties hereunder (including the costs and expenses of enforcing this Indenture against the Issuer, Holdings or any of the Note Guarantors (including this Section 7.07) or defending itself against any claim whether asserted by any Holder, the Issuer, Holdings, any Note Guarantor or any other Person, or liability in connective with the acceptance, exercise or performance of any of its powers or duties hereunder). The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Trustee may have separate counsel and the Issuer shall pay the fees and expenses of such counsel. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee’s own willful misconduct, negligence or bad faith.

The obligations of the Issuer under this Section 7.07 shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee.

 

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To secure the payment obligations of the Issuer and the Note Guarantors in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(a)(6) or (7) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

The Trustee shall comply with the provisions of TIA Section 313(b)(2) to the extent applicable.

Section 7.08. Replacement of Trustee.

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Holders of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuer in writing. The Issuer may remove the Trustee if:

(i) the Trustee fails to comply with Section 7.10 hereof;

(ii) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

(iii) a custodian or public officer takes charge of the Trustee or its property; or

(iv) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the Issuer’s expense), the Issuer or the Holders of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07

 

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hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

Section 7.09. Successor Trustee by Merger, etc.

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee.

Section 7.10. Eligibility; Disqualification.

There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.

This Indenture shall always have a Trustee who satisfies the requirements of TIA Sections 310(a)(1), (2) and (5). The Trustee is subject to TIA Section 310(b); provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met.

Section 7.11. Preferential Collection of Claims Against the Issuer.

The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein.

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.

The Issuer may, at its option and at any time, elect to have either Section 8.02 or 8.03 hereof applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.

Section 8.02. Legal Defeasance and Discharge.

Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Issuer, Holdings and the Note Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes, the Holdings Guarantee and the Note Guarantees on the date the conditions set forth below are satisfied (“ Legal Defeasance ”). For this purpose, Legal Defeasance means that the Issuer shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all of its other obligations under such Notes and this Indenture including that of Holdings and the Note Guarantors (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper

 

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instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:

(a) the rights of Holders of Notes to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due, solely out of the trust created pursuant to this Indenture referred to in Section 8.04 hereof;

(b) the Issuer’s obligations with respect to Notes concerning issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(c) the rights, powers, trusts, duties and immunities of the Trustee, and the Issuer’s obligations in connection therewith; and

(d) this Section 8.02.

Subject to compliance with this Article 8, the Issuer may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

Section 8.03. Covenant Defeasance.

Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Issuer and the Note Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants contained in Sections 3.09, 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 (solely with respect to Restricted Subsidiaries), 4.14, 4.15, 4.16 and 4.17 hereof, and clause (4) of Section 5.01(a), hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 hereof are satisfied (“ Covenant Defeasance ”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(a)(3) (solely with respect to clause (4) of Section 5.01(a)), 6.01(a)(4), 6.01(a)(5), 6.01(a)(6) (solely with respect to Restricted Subsidiaries that are Significant Subsidiaries), 6.01(a)(7) (solely with respect to Restricted Subsidiaries that are Significant Subsidiaries), 6.01(a)(8) and 6.01(a)(9) hereof shall not constitute Events of Default.

Section 8.04. Conditions to Legal or Covenant Defeasance.

The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes:

In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes:

 

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(1) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, U.S. dollar-denominated Government Obligations, or a combination thereof, in such amounts as shall be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest due on the Notes on the stated maturity date or on the date of redemption, as the case may be, of such principal, premium, if any, or interest on such Notes, and the Issuer must specify whether such Notes are being defeased to maturity or to a particular date of redemption;

(2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions,

(a) the Issuer has received from, or there has been published by, the United States Internal Revenue Service a ruling, or

(b) since the issuance of the Notes, there has been a change in the applicable U.S. federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes, as applicable, as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; provided , however , the Opinion of Counsel required with respect to a Legal Defeasance need not be delivered if all Notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer;

(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to such tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under the Credit Agreement or any other material agreement or instrument (other than this Indenture) to which the Issuer or any Restricted Subsidiary is a party or by which the Issuer or any Restricted Subsidiary is bound (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith);

(6) the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that, as of the date of such opinion and subject to customary assumptions and exclusions

 

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following the deposit, the trust funds will not be subject to the effect of Section 547 of Title 11 of the United States Code;

(7) the Issuer shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Issuer with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuer, Holdings or any Note Guarantor or others; and

(8) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions), each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.

Section 8.05. Deposited Money and Government Obligations to Be Held in Trust; Other Miscellaneous Provisions.

Subject to Section 8.06 hereof, all money and Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “ Trustee ”) pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer, Holdings or a Note Guarantor acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and Additional Interest, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.

The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or Government Obligations deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon the request of the Issuer any money or Government Obligations held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 8.06. Repayment to the Issuer.

Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium and Additional Interest, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium and Additional Interest, if any, or interest has become due and payable shall be paid to the Issuer on its request or (if then held by the Issuer) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon cease.

Section 8.07. Reinstatement.

If the Trustee or Paying Agent is unable to apply any United States dollars or Government Obligations in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise

 

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prohibiting such application, then the Issuer’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided that, if the Issuer makes any payment of principal of, premium and Additional Interest, if any, or interest on any Note following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01. Without Consent of Holders of Notes.

Notwithstanding Section 9.02 hereof, the Issuer, Holdings (with respect to the Holdings Guarantee or this Indenture), any Note Guarantor (with respect to its Note Guarantee or this Indenture) and the Trustee may amend or supplement this Indenture and the Notes, the Holdings Guarantee or any Note Guarantee without the consent of any Holder:

(1) to cure any ambiguity, omission, mistake, defect or inconsistency;

(2) to provide for uncertificated Notes in addition to or in place of certificated Notes; provided , however , that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code;

(3) to comply with Section 5.01 hereof;

(4) to provide for the assumption of the Issuer’s, Holdings’ or any Note Guarantor’s obligations to the Holders;

(5) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under this Indenture of any such Holder;

(6) to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Issuer, Holdings or any Note Guarantor;

(7) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA;

(8) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee thereunder pursuant to the requirements thereof;

(9) to provide for the issuance of Exchange Notes or private exchange notes, which are identical to Exchange Notes except that they are not freely transferable, and for Additional Notes;

(10) to add a Note Guarantor under this Indenture;

(11) to secure the Notes, the Holdings Guarantee or any Note Guarantees;

 

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(12) to conform the text of this Indenture, the Holdings Guarantee, Note Guarantees or the Notes to any provision of the “Description of the Extended Maturity Notes” section of the Offering Memorandum to the extent that such provision in such “Description of the Extended Maturity Notes” section was intended to be a verbatim recitation of a provision of this Indenture, Note Guarantee, the Holdings Guarantee or Notes;

(13) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including, without limitation to facilitate the issuance and administration of the Notes; provided , however , that (i) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of Holders to transfer Notes; or

(14) to make any change that does not adversely affect the rights of any Holder in any material respect.

Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Issuer, Holdings and the Note Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.

Section 9.02. With Consent of Holders of Notes.

Except as provided below in this Section 9.02, the Issuer, Holdings (with respect to the Holdings Guarantee or this Indenture), any Note Guarantor (with respect to its Note Guarantee or this Indenture) and the Trustee may amend or supplement this Indenture, any Note Guarantee, the Holdings Guarantee and the Notes with the consent of the Holders of at least a majority in principal amount of the Notes (including Additional Notes, if any) then outstanding voting as a single class (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and, subject to Sections 6.02 and 6.04 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium and Additional Interest, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Note Guarantees, the Holdings Guarantee or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) voting as a single class (including consents obtained in connection with the purchase of, or tender offer or exchange offer for, Notes). Sections 2.08 and 2.09 hereof shall determine which Notes are considered to be “outstanding” for the purposes of this Section 9.02.

Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Issuer, the Note Guarantors and Holdings in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

 

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It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer shall mail or electronically transmit to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to mail or electronically transmit such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

Without the consent of each affected Holder of Notes, an amendment or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):

(1) reduce the principal amount of such Notes whose Holders must consent to an amendment, supplement or waiver;

(2) reduce the principal of or change the Stated Maturity of any such Note, reduce the premium payable upon redemption or repurchase of any Note or change the time at which any Note may be redeemed under Section 3.07 hereof (other than the notice periods relating to an optional redemption of the Notes, so long as such notice periods comply with DTC’s procedures);

(3) reduce the rate of or change the time for payment of interest on any Note;

(4) waive a Default in the payment of principal of, premium, if any, or interest on the Notes, except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes with respect to a non payment default and a waiver of the payment default that resulted from such acceleration, or in respect of a covenant or provision contained in this Indenture or any Note Guarantee that cannot be amended or modified without the consent of all Holders;

(5) make any Note payable in money other than that stated therein;

(6) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of, premium, if any, or interest on the Notes;

(7) make any change in these amendment and waiver provisions;

(8) impair the right of any Holder to receive payment of principal of, premium, if any, or interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes;

(9) make any change to the subordination provisions of this Indenture that adversely affects the rights of any Holder of Notes; or

(10) except as expressly permitted by this Indenture, modify the Note Guarantees of any Significant Subsidiary or any group of Restricted Subsidiaries that, taken together as of the date of the amendment or waiver, would constitute a Significant Subsidiary in any manner adverse to the Holders of the Notes.

Section 9.03. Compliance with TIA.

 

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Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies with the TIA as then in effect.

Section 9.04. Revocation and Effect of Consents.

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement, or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date unless the consent of the requisite number of Holders has been obtained.

Section 9.05. Notation on or Exchange of Notes.

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

Section 9.06. Trustee to Sign Amendments, etc.

The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Issuer may not sign an amendment, supplement or waiver until its board of directors approves it. In executing any amendment, supplement or waiver, the Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 16.04 hereof, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer, Holdings and any Note Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03).

ARTICLE 10

SUBORDINATION

Section 10.01. Agreement To Subordinate.

The Issuer agrees, and each Holder by accepting a Note agrees, that the payment of all Obligations owing in respect of the Notes is subordinated in right of payment, to the extent and in the

 

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manner provided in this Article 10, to the prior payment in full of all existing and future Senior Indebtedness of the Issuer and that the subordination is for the benefit of and enforceable by the holders of such Senior Indebtedness. The Notes shall in all respects rank pari passu in right of payment with all existing and future Senior Subordinated Indebtedness of the Issuer, and will be senior in right of payment to all existing and future Subordinated Indebtedness of the Issuer; and only Indebtedness of the Issuer that is Senior Indebtedness shall rank senior to the Notes in accordance with the provisions set forth herein. All provisions of this Article 10 shall be subject to Section 10.12.

Section 10.02. Liquidation, Dissolution, Bankruptcy.

Upon any payment or distribution of the assets of the Issuer to creditors upon a total or partial liquidation or a total or partial dissolution of the Issuer or in a reorganization of or similar proceeding relating to the Issuer or its property:

(i) the holders of Senior Indebtedness of the Issuer shall be entitled to receive payment in full in cash of such Senior Indebtedness (including interest accruing after, or which would accrue but for, the commencement of any such proceeding at the rate specified in the applicable Senior Indebtedness, whether or not a claim for such interest would be allowed) before Holders of the Notes shall be entitled to receive any payment; and

(ii) until the Senior Indebtedness of the Issuer is paid in full in cash, any payment or distribution to which Holders of the Notes would be entitled but for the subordination provisions of this Indenture shall be made to holders of such Senior Indebtedness as their interests may appear, except that Holders of the Notes may receive and retain (x) Permitted Junior Securities and (y) payments or deposits made pursuant to Article 8 or Article 15 so long as, on the date or dates the respective amounts were paid into the trust, such payments were made with respect to the Notes without violating the subordination provisions described herein; and

(iii) if a distribution is made to Holders of the Notes that, due to the subordination provisions, should not have been made to them, such Holders of the Notes are required to hold it in trust for the holders of Senior Indebtedness of the Issuer and pay it over to them as their interests may appear.

Section 10.03. Default on Senior Indebtedness of the Issuer.

The Issuer shall not pay principal of, premium, if any, or interest on the Notes (or pay any other Obligations relating to the Notes, including Additional Interest, fees, costs, expenses, indemnities and rescission or damage claims) or make any deposit pursuant to Article 8 or Article 15 hereof and may not purchase, redeem or otherwise retire any Notes (collectively, “ pay the Notes ”) (except that Holders of the Notes may receive and retain (x) Permitted Junior Securities and (y) payments or deposits made pursuant to Article 8 or Article 15), if either of the following occurs (a “ Payment Default ”):

(i) a default in the payment of the principal of, premium, if any, or interest on any Designated Senior Indebtedness of the Issuer occurs and is continuing or any other amount owing in respect of any Designated Senior Indebtedness of the Issuer is not paid when due, or

 

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(ii) any other default on Designated Senior Indebtedness of the Issuer occurs and the maturity of such Designated Senior Indebtedness of the Issuer is accelerated in accordance with its terms,

unless, in either case, the Payment Default has been cured or waived and any such acceleration has been rescinded or such Designated Senior Indebtedness has been paid in full in cash; provided , however , that the Issuer shall be entitled to pay the Notes without regard to the foregoing if the Issuer and the Trustee receive written notice approving such payment from the Representatives of all Designated Senior Indebtedness with respect to which the Payment Default has occurred and is continuing.

During the continuance of any default (other than a Payment Default) (a “ Non-Payment Default ”) with respect to any Designated Senior Indebtedness of the Issuer pursuant to which the maturity thereof may be accelerated without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, the Issuer shall not pay the Notes (except in the form of Permitted Junior Securities) for a period (a “ Payment Blockage Period ”) commencing upon the receipt by the Trustee (with a copy to the Issuer) of written notice (a “ Blockage Notice ”) of such Non-Payment Default from the Representative of such Designated Senior Indebtedness specifying an election to effect a Payment Blockage Period and ending 179 days thereafter, unless earlier terminated as provided below. With respect to Indebtedness under the Credit Agreement, a Blockage Notice may be given only by the administrative agent thereunder unless otherwise agreed to in writing by the requisite lenders named therein. The Payment Blockage Period shall end earlier if such Payment Blockage Period is terminated (i) by written notice to the Trustee and the Issuer from the Person or Persons who gave such Blockage Notice; (ii) because the default giving rise to such Blockage Notice is cured, waived or otherwise no longer continuing; or (iii) because such Designated Senior Indebtedness has been repaid in full in cash.

Notwithstanding the provisions described in the immediately preceding paragraph (but subject to the provisions contained in the first paragraph of this Section 10.03 and Section 10.02 hereof), unless the holders of such Designated Senior Indebtedness or the Representative of such Designated Senior Indebtedness shall have accelerated the maturity of such Designated Senior Indebtedness or a Payment Default exists, the Issuer shall be permitted to resume paying the Notes after the end of such Payment Blockage Period (including any missed payments). The Notes shall not be subject to more than one Payment Blockage Period in any consecutive 360-day period, irrespective of the number of defaults with respect to Designated Senior Indebtedness during such period; provided that if any Blockage Notice is delivered to the Trustee by or on behalf of the holders of Designated Senior Indebtedness of the Issuer (other than the holders of Indebtedness under the Credit Agreement), a Representative of holders of Indebtedness under the Credit Agreement may give another Blockage Notice within such period. However, in no event shall the total number of days during which any Payment Blockage Period or Periods on the Notes is in effect exceed 179 days in the aggregate during any consecutive 360-day period. Notwithstanding the foregoing, however, no default or event of default that existed or was continuing on the date of commencement of any Payment Blockage Period with respect to Designated Senior Indebtedness initiating such Payment Blockage Period shall be, or be made, the basis for a subsequent Payment Blockage Period by the Representative of such Designated Senior Indebtedness whether or not within a period of 360 consecutive days unless such default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenants during the period after the date of delivery of a Blockage Notice, that, in either case, would give rise to a Non-Payment Default pursuant to any provisions of the Designated Senior Indebtedness under which a Non-Payment Default previously existed or was continuing shall constitute a new Non-Payment Default for this purpose).

Section 10.04. Acceleration of Payment of Notes.

 

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If payment of the Notes is accelerated because of an Event of Default, the Issuer or the Trustee shall promptly notify the holders of the Designated Senior Indebtedness of the Issuer or the Representative of such Designated Senior Indebtedness of the acceleration; provided that any failure to give such notice shall have no effect whatsoever on the provisions of this Article 10. If any Designated Senior Indebtedness of the Issuer is outstanding, the Issuer may not pay the Notes until five Business Days after the Representatives of all such Designated Senior Indebtedness receive notice of such acceleration and, thereafter, may pay the Notes only if this Indenture otherwise permits payment at that time.

Section 10.05. When Distribution Must Be Paid Over.

If a distribution is made to Holders that, due to the subordination provisions, should not have been made to them, such Holders are required to hold it in trust for the holders of Senior Indebtedness of the Issuer, and pay it over to them as their interests may appear.

Section 10.06. Subrogation.

After all Senior Indebtedness of the Issuer is paid in full and until the Notes are paid in full, Holders shall be subrogated to the rights of holders of such Senior Indebtedness to receive distributions applicable to such Senior Indebtedness. A distribution made under this Article 10 to holders of such Senior Indebtedness which otherwise would have been made to Holders is not, as between the Issuer and Holders, a payment by the Issuer on such Senior Indebtedness.

Section 10.07. Relative Rights.

This Article 10 defines the relative rights of Holders and holders of Senior Indebtedness of the Issuer. Nothing in this Indenture shall:

(i) impair, as between the Issuer and Holders, the obligation of the Issuer, which is absolute and unconditional, to pay principal of and interest on the Notes in accordance with their terms;

(ii) prevent the Trustee or any Holder from exercising its available remedies upon a Default, subject to the rights of holders of Senior Indebtedness of the Issuer to receive payments or distributions otherwise payable to Holders and such other rights of such holders of Senior Indebtedness as set forth herein; or

(iii) affect the relative rights of Holders and creditors of the Issuer other than their rights in relation to holders of Senior Indebtedness.

Section 10.08. Subordination May Not Be Impaired by the Issuer.

No right of any holder of Senior Indebtedness of the Issuer to enforce the subordination of the Indebtedness evidenced by the Notes shall be impaired by any act or failure to act by the Issuer or by their failure to comply with this Indenture.

Section 10.09. Rights of Trustee and Paying Agent.

Notwithstanding Section 10.03 hereof, the Trustee or any Paying Agent may continue to make payments on the Notes and shall not be charged with knowledge of the existence of facts that would prohibit the making of any payments unless, not less than three Business Days prior to the date of such payment, a Trust Officer at the Corporate Trust Office of the Trustee receives notice satisfactory to him

 

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that payments may not be made under this Article 10; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 7.01, shall be entitled in all respects to assume that no such facts exist; provided , however , that if a Trust Officer of the Trustee shall not have received, at least three Business Days prior to the date upon which by the terms hereof any such money may become payable for any purpose (including, without limitation, the payment of principal, premium, if any, interest, Additional Interest, the redemption price or the Change of Control Payment, as the case may be, in respect of any Note), the notice with respect to such money provided for in this Section 10.09 then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within three Business Days prior to such date. The Issuer, a Representative, a holder of Senior Indebtedness of the Issuer or any trustee of or agent thereof shall be entitled to give the notice; provided , however , that, if an issue of Senior Indebtedness of the Issuer has a Representative, only the Representative shall be entitled to give the notice.

The Trustee in its individual or any other capacity shall be entitled to hold Senior Indebtedness of the Issuer with the same rights it would have if it were not Trustee. The Registrar and the Paying Agent shall be entitled to do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article 10 with respect to any Senior Indebtedness of the Issuer which may at any time be held by it, to the same extent as any other holder of such Senior Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing in this Article 10 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof or any other Section of this Indenture.

Section 10.10. Distribution or Notice to Representative.

Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness of the Issuer, the distribution may be made and the notice given to their Representative (if any).

Section 10.11. Article 10 Not To Prevent Events of Default or Limit Right To Accelerate.

The failure to make a payment pursuant to the Notes by reason of any provision in this Article 10 shall not be construed as preventing the occurrence of a Default. Nothing in this Article 10 shall have any effect on the right of the Holders or the Trustee to accelerate the maturity of the Notes.

Section 10.12. Trust Moneys Not Subordinated.

Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of Government Obligations held in trust by the Trustee for the payment of principal of and interest on the Notes pursuant to Article 8 or Article 15 hereof shall not be subordinated to the prior payment of any Senior Indebtedness of the Issuer or subject to the restrictions set forth in this Article 10, and none of the Holders shall be obligated to pay over any such amount to the Issuer or any holder of Senior Indebtedness of the Issuer or any other creditor of the Issuer; provided that the subordination provisions of this Article 10 were not violated at the time the applicable amounts were deposited in trust pursuant to Article 8 or Article 15 hereof, as the case may be.

Section 10.13. Trustee Entitled To Rely.

Upon any payment or distribution pursuant to this Article 10, the Trustee and the Holders shall be entitled to conclusively rely (a) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 10.02 hereof are pending, (b) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to

 

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the Holders or (c) upon the Representatives of Senior Indebtedness of the Issuer for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of such Senior Indebtedness and other Indebtedness of the Issuer, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 10. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Indebtedness of the Issuer to participate in any payment or distribution pursuant to this Article 10, the Trustee shall be entitled to request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article 10, and, if such evidence is not furnished, the Trustee shall be entitled to defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 hereof shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article 10.

Section 10.14. Trustee To Effectuate Subordination.

A Holder by its acceptance of a Note agrees to be bound by this Article 10 and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be necessary or appropriate to effectuate the subordination between the Holders and the holders of Senior Indebtedness of the Issuer as provided in this Article 10 and appoints the Trustee as attorney-in-fact for any and all such purposes.

Section 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness of the Issuer.

The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of the Issuer and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders or the Issuer or any other Person, money or assets to which any holders of Senior Indebtedness of the Issuer shall be entitled by virtue of this Article 10 or otherwise.

Section 10.16. Reliance by Holders of Senior Indebtedness of the Issuer on Subordination Provisions.

Each Holder by accepting a Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness of the Issuer, whether such Senior Indebtedness was created or acquired before or after the issuance of the Notes, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness and such holder of such Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness.

Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness of the Issuer may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Trustee or the Holders and without impairing or releasing the subordination provided in this Article 10 or the obligations hereunder of the Holders to the holders of the Senior Indebtedness of the Issuer, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness of the Issuer, or otherwise amend or supplement in any manner Senior Indebtedness of the Issuer, or any instrument evidencing the same or any agreement under which Senior Indebtedness of the Issuer is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness of the Issuer; (iii) release any Person liable in any manner for the payment or collection of Senior Indebtedness of the Issuer; and (iv) exercise or refrain from exercising any rights against the Issuer and any other Person.

 

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ARTICLE 11

NOTE GUARANTEES

Section 11.01. Note Guarantee .

Subject to this Article 11, each of the Note Guarantors hereby, jointly and severally irrevocably and unconditionally guarantees, on an unsecured senior subordinated basis, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that: (a) the principal of and interest, premium and Additional Interest, if any, on the Notes shall be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder whether for payment of principal of, premium, if any, or interest and Additional Interest, if any, on the Notes and all other monetary obligations of the Issuer under this Indenture and the Notes shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, each Note Guarantor, together with Holdings as described in Article 12, shall be jointly and severally with each other Note Guarantor and with Holdings, obligated to pay the same immediately. Each Note Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

The Note Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, the Holdings Guarantee, any Note Guarantee or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, Holdings or any Note Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Note Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.

Each Note Guarantor also agrees to pay, in addition to the amount stated above, any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 11.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, Holdings, the Note Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer, Holdings or the Note Guarantors, any amount paid either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Each Note Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Note Guarantor further agrees that, as between the Note Guarantors and Holdings, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this

 

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Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Note Guarantors for the purpose of this Note Guarantee. The Note Guarantors shall have the right to seek contribution from any non-paying Note Guarantor or Holdings so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantees.

Each Note Guarantee will be a continuing guarantee and shall:

(1) remain in full force and effect until payment in full of all the applicable guaranteed obligations;

(2) subject to the next succeeding paragraph, be binding upon each such Note Guarantor and its successors; and

(3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

Each Note Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer, Holdings or any Note Guarantor for liquidation or reorganization, should the Issuer, Holdings or any Note Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s, Holdings’ or any other Note Guarantor’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, the Holdings Guarantee or Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

In case any provision of any Note Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

The Note Guarantee issued by any Note Guarantor shall be a general unsecured senior subordinated obligation of such Note Guarantor and shall be subordinated in right of payment to all existing and future Senior Indebtedness of such Note Guarantor, if any.

Each payment to be made by a Note Guarantor in respect of its Note Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

Section 11.02. Limitation on Note Guarantor Liability.

Each Note Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Note Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders, Holdings and the Note Guarantors hereby irrevocably agree that the obligations of each Note Guarantor shall be limited to

 

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the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Note Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Note Guarantor or Holdings in respect of the obligations of such other Note Guarantor or Holdings under this Article 11 or Holdings under Article 12, result in the obligations of such Note Guarantor under its Note Guarantee not being voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. Each Note Guarantor that makes a payment under its Note Guarantee shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each other Note Guarantor and Holdings in an amount equal to such other Note Guarantor’s or Holdings’ pro rata portion of such payment based on the respective net assets of all the Note Guarantors and Holdings at the time of such payment determined in accordance with GAAP.

Section 11.03. Execution and Delivery.

To evidence its Note Guarantee set forth in Section 11.01 hereof, each Note Guarantor hereby agrees that this Indenture shall be executed on behalf of such Note Guarantor by its Chairman, President, its Chief Financial Officer, its Treasurer, its Assistant Treasurer, one of its Vice Presidents or one of its Assistant Vice Presidents.

Each Note Guarantor hereby agrees that its Note Guarantee set forth in Section 11.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Note Guarantee on the Notes.

If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Note Guarantee shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Note Guarantors.

If required by Section 4.15 hereof, the Issuer shall cause any newly created or acquired Restricted Subsidiary to comply with the provisions of Section 4.15 hereof and this Article 11, to the extent applicable.

Section 11.04. Subrogation.

Each Note Guarantor shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by such Note Guarantor pursuant to the provisions of Section 11.01 hereof; provided that, if an Event of Default has occurred and is continuing, no Note Guarantor shall be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.

Section 11.05. Benefits Acknowledged.

Each Note Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to its Note Guarantee are knowingly made in contemplation of such benefits.

Section 11.06. Release of Note Guarantees.

 

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A Note Guarantee by a Note Guarantor shall be automatically and unconditionally released and discharged, and no further action by such Note Guarantor, the Issuer or the Trustee is required for the release of such Note Guarantor’s Note Guarantee, upon:

(1) (a) the sale, disposition or other transfer (including through merger or consolidation) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Note Guarantor is no longer a Restricted Subsidiary), of the applicable Note Guarantor if such sale, disposition or other transfer is made in compliance with the applicable provisions of this Indenture;

(b) the Issuer designating such Note Guarantor to be an Unrestricted Subsidiary in accordance with the provisions set forth under Section 4.07 and the definition of “Unrestricted Subsidiary”;

(c) the release or discharge of such Restricted Subsidiary from (x) its guarantee of Indebtedness under the Credit Agreement (including by reason of the termination of the Credit Agreement) and/or (y) the guarantee of Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer or such Restricted Subsidiary or the repayment of the Indebtedness or Disqualified Stock (except in each case a discharge or release by or as a result of payment under such guarantee) that resulted in the obligation to guarantee the Notes, in the case of each of clauses (x) and (y) if such Note Guarantor would not then otherwise be required to guarantee the Notes pursuant to this Indenture; provided , that if such Person has incurred any Indebtedness or issued any Disqualified Stock in reliance on its status as a Note Guarantor under Section 4.09, such Note Guarantor’s obligations under such Indebtedness or Disqualified Stock, as the case may be, so Incurred are satisfied in full and discharged or are otherwise permitted to be Incurred under Section 4.09; or

(d) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 hereof or the Issuer’s obligations under this Indenture being discharged in accordance with the terms of this Indenture; and

(2) in the case of clause (1)(a) above, the release of such Note Guarantor from its guarantee, if any, of, and all pledges and security, if any, granted in connection with, the Credit Agreement and any other Indebtedness of the Issuer or any Restricted Subsidiary.

In addition, a Note Guarantee will be automatically released upon the applicable Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest securing Bank Indebtedness or other exercise of remedies in respect thereof.

Section 11.07. Securitization Acknowledgement .

(a) For purposes of this Section 11.07, capitalized terms used herein and not otherwise defined herein (unless there shall be a conflict between a term used in this Section 11.07(a) and a term used elsewhere in this Indenture, in which case the term as defined in this Section 11.07(a) shall control solely for purposes of this Section 11.07(a)) shall have the meanings assigned to such terms in the Transfer and Servicing Agreement, or, if not defined therein, as assigned to such terms in the Purchase Agreement or the Receivables Purchase Agreement referred to therein. Subsequent references in this Section 11.07(a) to Apple Ridge Services Corporation (“ ARSC ”), Cartus Corporation (“ Cartus ”) and Cartus Financial Corporation (“ CFC ”) below shall mean and be references to such corporations as they existed as of the Original Issue Date but shall also include references to any limited liability companies which succeed to the assets and liabilities of such companies in connection with a conversion of any such corporation into a limited liability company.

 

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Holders by their acceptance of Notes entitled to the benefits of this Indenture acknowledge and agree, as follows (which acknowledgement and agreement are part of the consideration for the issuance of the Notes):

(i) Each Holder hereby acknowledges that (A) CFC is a limited purpose corporation whose primary activities are restricted in its certificate of incorporation to purchasing Cartus Purchased Assets (originally referred to as CMSC Purchased Assets) from Cartus pursuant to the Purchase Agreement, making Equity Payments, Equity Loans, Mortgage Payoffs and Mortgage Payments to or on behalf of employees or otherwise purchasing Homes in connection with the Pool Relocation Management Agreements, funding such activities through the sale of CFC Receivables (originally referred to as CMF Receivables) to ARSC, and such other activities as it deems necessary or appropriate in connection therewith, (B) ARSC is a limited purpose corporation whose primary activities are restricted in its certificate of incorporation to purchasing from CFC all CFC Receivables acquired by CFC from Cartus or otherwise originated by CFC, funding such acquisitions through the sale of the CFC Receivables to Apple Ridge Funding LLC (“ ARF ”) and such other activities as it deems necessary or appropriate to carry out such activities, and (C) ARF is a limited purpose limited liability company whose activities are limited in its limited liability company agreement to purchasing the Pool Receivables from ARSC, funding such acquisitions through the issuance of the Notes, pledging such Pool Receivables to The Bank of New York Mellon (formerly known as The Bank of New York) (the “ Indenture Trustee ”) and such other activities as it deems necessary or appropriate to carry out such activities.

(ii) Each Holder hereby acknowledges and agrees that (A) the foregoing transfers are intended to be true and absolute sales as a result of which Cartus has no right, title and interest in and to any of the Cartus Purchased Assets, any Homes acquired by CFC in connection therewith or any CFC Receivables, including any Related Property relating thereto, any proceeds thereof or earnings thereon (collectively, the “ Pool Assets ”), (B) none of CFC, ARSC or ARF is a Loan Party, (C) such Holder is not a creditor of, and has no recourse to, CFC, ARSC or ARF pursuant to the Credit Agreement or any other Loan Document, and (D) such Holder has no lien on or claim, contractual or otherwise, arising under the Credit Agreement or any other Loan Document to the Pool Assets (whether now existing or hereafter acquired and whether tangible or intangible); provided that nothing herein shall limit any rights the Secured Parties may have to any proceeds or earnings which are transferred from time to time to Cartus by CFC, ARSC or ARF.

(iii) No Holder will institute against or join any other person in instituting against CFC, ARSC or ARF any insolvency proceeding, or solicit, join in soliciting, cooperate with or encourage any motion in support of, any insolvency proceeding involving CFC, ARSC or ARF until one year and one day after the payment in full of all Notes; provided that the foregoing shall not limit the right of any Holder to file any claim in or otherwise take any action (not inconsistent with the provisions of this Section 11.07(a)) permitted or required by applicable law with respect to any insolvency proceeding instituted against CFC, ARSC or ARF by any other person.

(iv) Without limiting the foregoing, in the event of any voluntary or involuntary bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any Federal or state bankruptcy or similar law involving Cartus, CFC, ARSC, ARF or any other Affiliates of Cartus as debtor, or otherwise, the Secured Parties

 

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agree that if, notwithstanding the intent of the parties, Cartus is found to have a property interest in the Pool Assets, then, in such event, CFC and its assigns, including the Indenture Trustee, shall have a first and prior claim to the Pool Assets, and any claim or rights the Secured Parties may have to the Pool Assets, contractual or otherwise, shall be subject to the prior claims of the Indenture Trustee and the Noteholders until all amounts owing under the Indenture shall have been paid in full, and the Secured Parties agree to turn over to the Indenture Trustee any amounts received contrary to the provisions of this clause (iv).

(v) Each Holder hereby covenants and agrees that it will not agree to any amendment, supplement or other modification of this Section 11.07(a) without the prior written consent of the Indenture Trustee. Each Holder further agrees that the provisions of this Section 11.07(a) are made for the benefit of, and may be relied upon and enforced by, the Indenture Trustee and that the Indenture Trustee shall be a third party beneficiary of this Section 11.07(a).

ARTICLE 12

HOLDINGS GUARANTEE

Section 12.01. Holdings Guarantee .

Subject to this Article 12, Holdings hereby, jointly and severally with the Note Guarantors, irrevocably and unconditionally guarantees, on an unsecured junior subordinated basis, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that: (a) the principal of and interest, premium and Additional Interest, if any, on the Notes shall be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder whether for payment of principal of, premium, if any, or interest or Additional Interest, if any, on the Notes and all other monetary obligations of the Issuer under this Indenture and the Notes shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, Holdings, together with the Note Guarantors as described in Article 10, shall be jointly and severally obligated to pay the same immediately. Holdings agrees that this is a guarantee of payment and not a guarantee of collection.

Holdings hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, this Indenture or any Note Guarantee, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, Holdings or any Note Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Holdings hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Holdings Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.

 

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Holdings also agrees to pay, in addition to the amount stated above, any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 12.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, Holdings, the Note Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer, Holdings or the Note Guarantors, any amount paid either to the Trustee or such Holder, this Holdings Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Holdings agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Holdings further agrees that, as between Holdings and the Note Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Holdings Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by Holdings for the purpose of this Holdings Guarantee. Holdings shall have the right to seek contribution from any non-paying Note Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantees.

This Holdings Guarantee will be a continuing guarantee and shall:

(1) remain in full force and effect until payment in full of all the applicable guaranteed obligations;

(2) subject to the next succeeding paragraph, be binding upon Holdings and its successors; and

(3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

This Holdings Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer, Holdings or any Note Guarantor for liquidation or reorganization, should the Issuer, Holdings or any Note Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s, Holdings’ or any Note Guarantor’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, the Holdings Guarantee or Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

In case any provision of this Holdings Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

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This Holdings Guarantee shall be a general unsecured junior subordinated obligation of Holdings and shall be subordinated in right of payment to all existing and future Holdings Senior Indebtedness, if any.

Each payment to be made by Holdings in respect of its Holdings Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

Section 12.02. Limitation on Holdings Liability.

Holdings, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Holdings Guarantee of Holdings not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to this Holdings Guarantee. To effectuate the foregoing intention, the Trustee, the Holders, the Note Guarantors and Holdings hereby irrevocably agree that the obligations of Holdings shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of Holdings that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of Holdings or any of the Note Guarantors in respect of the obligations of Holdings under this Article 12 or the Note Guarantors under Article 11, result in the obligations of Holdings under this Holdings Guarantee not being voidable under applicable law relating to a fraudulent conveyance or fraudulent transfer or similar law affecting the rights of creditors generally. If Holdings makes a payment under this Holdings Guarantee, then Holdings shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each Note Guarantor in an amount equal to such Note Guarantor’s pro rata portion of such payment based on the respective net assets of Holdings and each of the Note Guarantors at the time of such payment determined in accordance with GAAP.

Section 12.03. Execution and Delivery.

To evidence the Holdings Guarantee set forth in Section 12.01 hereof, Holdings hereby agrees that this Indenture shall be executed on behalf of Holdings by its Chairman, President, its Chief Financial Officer, its Treasurer, its Assistant Treasurer, one of its Vice Presidents or one of its Assistant Vice Presidents.

Holdings hereby agrees that the Holdings Guarantee set forth in Section 12.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Holdings Guarantee on the Notes.

If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Holdings Guarantee shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Holdings Guarantee set forth in this Indenture on behalf of Holdings.

Section 12.04. Subrogation.

Holdings shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by Holdings pursuant to the provisions of Section 12.01 hereof; provided that, if an Event of Default has occurred and is continuing, Holdings shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.

 

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Section 12.05. Benefits Acknowledged.

Holdings acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to this Holdings Guarantee are knowingly made in contemplation of such benefits.

Section 12.06. Release of Holdings Guarantee.

This Holdings Guarantee shall be automatically and unconditionally released and discharged, and no further action by Holdings, the Issuer, the Note Guarantors or the Trustee is required for the release of this Holdings Guarantee, upon:

(a) the Issuer ceasing to be a Subsidiary of Holdings; provided that any such transaction occurs in compliance with the provisions of this Indenture; or

(b) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 hereof or the Issuer’s obligations under this Indenture being discharged in accordance with the terms of this Indenture.

ARTICLE 13

SUBORDINATION OF NOTE GUARANTEES

Section 13.01. Agreement To Subordinate.

Each Note Guarantor agrees, and each Holder by accepting a Note agrees, that the obligations of such Note Guarantor under its Note Guarantee are subordinated in all respects, including right of payment, to the extent and in the manner provided in this Article 13, to the prior payment in full of all existing and future Senior Indebtedness of such Note Guarantor and that the subordination is for the benefit of and enforceable by the holders of such Senior Indebtedness. A Note Guarantor’s obligations under its Note Guarantee shall in all respects rank pari passu in right of payment with all existing and future Senior Subordinated Indebtedness of such Note Guarantor, and will be senior in right of payment to all existing and future Subordinated Indebtedness of such Note Guarantor; and only Indebtedness of such Note Guarantor that is Senior Indebtedness shall rank senior to the obligations of such Note Guarantor under its Note Guarantee in accordance with the provisions set forth herein. All provisions of this Article 13 shall be subject to Section 13.12.

Section 13.02. Liquidation, Dissolution, Bankruptcy.

Upon any payment or distribution of the assets of a Note Guarantor to creditors upon a total or partial liquidation or a total or partial dissolution of such Note Guarantor or in a reorganization of or similar proceeding relating to such Note Guarantor or its property:

(1) the holders of Senior Indebtedness of such Note Guarantor shall be entitled to receive payment in full in cash of such Senior Indebtedness (including interest accruing after, or which would accrue but for, the commencement of any such proceeding at the rate specified in the applicable Senior Indebtedness, whether or not a claim for such interest would be allowed) before Holders of the Notes shall be entitled to receive any payment; and

(2) until the Senior Indebtedness of such Note Guarantor is paid in full in cash, any payment or distribution to which Holders of the Notes would be entitled but for the subordination provisions of this Article 13 shall be made to holders of such Senior Indebtedness as their interests may

 

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appear, except that Holders of the Notes may receive and retain (x) Permitted Junior Securities and (y) payments or deposits made pursuant to Article 8 or Article 15 so long as, on the date or dates the respective amounts were paid into the trust, such payments were made with respect to the Notes without violating the subordination provisions described herein; and

(3) if a distribution is made to Holders of the Notes that, due to the subordination provisions, should not have been made to them, such Holders of the Notes are required to hold it in trust for the holders of Senior Indebtedness of such Note Guarantor and pay it over to them as their interests may appear.

Section 13.03. Default on Senior Indebtedness of a Note Guarantor.

A Note Guarantor shall not make any payment pursuant to its Note Guarantee (or pay any other Obligations relating to its Note Guarantee, including Additional Interest, fees, costs, expenses, indemnities and rescission or damage claims) and may not purchase, redeem or otherwise retire any Notes (collectively, “ pay its Guarantee ”) (except that Holders of the Notes may receive and retain (x) Permitted Junior Securities and (y) payments or deposits made pursuant to Article 8 or Article 15), if either of the following occurs (a “ Note Guarantor Payment Default ”):

(1) a default in the payment of the principal of, premium, if any, or interest on any Designated Senior Indebtedness of the Issuer occurs and is continuing or any other amount owing in respect of any Designated Senior Indebtedness of the Issuer is not paid when due, or

(2) any other default on Designated Senior Indebtedness of the Issuer occurs and the maturity of such Designated Senior Indebtedness of the Issuer is accelerated in accordance with its terms,

unless, in either case, the Note Guarantor Payment Default has been cured or waived and any such acceleration has been rescinded or such Designated Senior Indebtedness has been paid in full in cash; provided , however , that such Note Guarantor shall be entitled to pay its Note Guarantee without regard to the foregoing if such Note Guarantor and the Trustee receive written notice approving such payment from the Representatives of all Designated Senior Indebtedness with respect to which the Note Guarantor Payment Default has occurred and is continuing.

During the continuance of any default (other than a Note Guarantor Payment Default) (a “ Note Guarantor Non-Payment Default ”) with respect to any Designated Senior Indebtedness of a Note Guarantor pursuant to which the maturity thereof may be accelerated without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, such Note Guarantor shall not pay its Note Guarantee (except in the form of Permitted Junior Securities) for a period (a “ Guarantee Payment Blockage Period ”) commencing upon the receipt by the Trustee (with a copy to such Note Guarantor and the Issuer) of written notice (a “ Guarantee Blockage Notice ”) of such Note Guarantor Non-Payment Default from the Representative of such Designated Senior Indebtedness specifying an election to effect a Guarantee Payment Blockage Period and ending 179 days thereafter unless earlier terminated as provided below. So long as there shall remain outstanding any Senior Indebtedness under the Credit Agreement, a Guarantee Blockage Notice may be given only by the administrative agent thereunder unless otherwise agreed to in writing by the requisite lenders named therein. The Guarantee Payment Blockage Period shall end earlier if such Guarantee Payment Blockage Period is terminated (i) by written notice to the Trustee, the relevant Note Guarantor and the Issuer from the Person or Persons who gave such Guarantee Blockage Notice; (ii) because the default giving rise to such Guarantee Blockage Notice is cured, waived or otherwise no longer continuing; or (iii) because such Designated Senior Indebtedness has been repaid in full in cash.

 

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Notwithstanding the provisions described in the immediately preceding paragraph (but subject to the provisions contained in the first paragraph of this Section 12.03 and Section 12.02 hereof), unless the holders of such Designated Senior Indebtedness or the Representative of such Designated Senior Indebtedness shall have accelerated the maturity of such Designated Senior Indebtedness or a Note Guarantor Payment Default exists, the relevant Note Guarantor shall be permitted to resume paying its Note Guarantee after the end of such Guarantee Payment Blockage Period. Each Note Guarantor shall not be subject to more than one Guarantee Payment Blockage Period in any consecutive 360-day period, irrespective of the number of defaults with respect to Designated Senior Indebtedness of the relevant Note Guarantee during such period; provided that if any Guarantee Blockage Notice is delivered to the Trustee by or on behalf of the holders of Designated Senior Indebtedness of such Note Guarantor (other than the holders of Indebtedness under the Credit Agreement), a Representative of holders of Indebtedness under the Credit Agreement may give another Guarantee Blockage Notice within such period. However, in no event shall the total number of days during which any Guarantee Payment Blockage Period or Periods on a Note Guarantor is in effect exceed 179 days in the aggregate during any consecutive 360-day period. Notwithstanding the foregoing, however, no default that existed or was continuing on the date of delivery of any Guarantee Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Guarantee Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenants during the period after the date of delivery of a Guarantee Blockage Notice, that, in either case, would give rise to a Note Guarantor Non-Payment Default pursuant to any provisions of the Designated Senior Indebtedness under which a Note Guarantor Non-Payment Default previously existed or was continuing shall constitute a new Note Guarantor Non-Payment Default for this purpose).

Section 13.04. Demand for Payment.

If payment of the Notes is accelerated because of an Event of Default and a demand for payment is made on a Note Guarantor pursuant to Article 11 hereof, the Issuer, the Trustee or such Note Guarantor shall promptly notify the holders of the Designated Senior Indebtedness of such Note Guarantor or the Representative of such Designated Senior Indebtedness of such demand; provided that any failure to give such notice shall have no effect whatsoever on the provisions of this Article 13. If any Designated Senior Indebtedness of a Note Guarantor is outstanding, such Note Guarantor may not pay its Note Guarantee until five Business Days after the Representatives of all such Designated Senior Indebtedness receive notice of such acceleration and, thereafter, may pay its Note Guarantee only if this Indenture otherwise permits payment at that time.

Section 13.05. When Distribution Must Be Paid Over.

If a distribution is made to Holders that, due to the subordination provisions, should not have been made to them, such Holders are required to hold it in trust for the holders of Senior Indebtedness of the relevant Note Guarantor and pay it over to them as their interests may appear.

Section 13.06. Subrogation.

After all Senior Indebtedness of a Note Guarantor is paid in full and until the Notes are paid in full, Holders shall be subrogated to the rights of holders of such Senior Indebtedness to receive distributions applicable to such Senior Indebtedness. A distribution made under this Article 13 to holders of such Senior Indebtedness which otherwise would have been made to Holders is not, as between the relevant Note Guarantor and Holders, a payment by such Note Guarantor on such Senior Indebtedness.

Section 13.07. Relative Rights.

 

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This Article 13 defines the relative rights of Holders and holders of Senior Indebtedness of a Note Guarantor. Nothing in this Indenture shall:

(1) impair, as between such Note Guarantor and Holders, the obligation of such Note Guarantor, which is absolute and unconditional, to make payments under its Note Guarantee in accordance with its terms;

(2) prevent the Trustee or any Holder from exercising its available remedies upon a default by such Note Guarantor under its obligations with respect to its Note Guarantee, subject to the rights of holders of Senior Indebtedness of such Note Guarantor to receive payments or distributions otherwise payable to Holders and such other rights of such holders of Senior Indebtedness as set forth herein; or

(3) affect the relative rights of Holders and creditors of such Note Guarantor other than their rights in relation to holders of Senior Indebtedness.

Section 13.08. Subordination May Not Be Impaired by a Note Guarantor.

No right of any holder of Senior Indebtedness of a Note Guarantor to enforce the subordination of the obligations of such Note Guarantor under its Note Guarantee shall be impaired by any act or failure to act by such Note Guarantor or by its failure to comply with this Indenture.

Section 13.09. Rights of Trustee and Paying Agent.

Notwithstanding Section 13.03 hereof, the Trustee or any Paying Agent may continue to make payments on the Notes and shall not be charged with knowledge of the existence of facts that would prohibit the making of any payments unless, not less than three Business Days prior to the date of such payment, a Trust Officer at the Corporate Trust Office of the Trustee receives notice satisfactory to him that payments may not be made under this Article 13; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 7.01, shall be entitled in all respects to assume that no such facts exist; provided , however , that if a Trust Officer of the Trustee shall not have received, at least three Business Days prior to the date upon which by the terms hereof any such money may become payable for any purpose (including, without limitation, the payment of principal, premium, if any, interest, Additional Interest, the redemption price or the Change of Control Payment, as the case may be, in respect of any Note), the notice with respect to such money provided for in this Section 13.09 then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within three Business Days prior to such date. A Note Guarantor, a Representative, a holder of Senior Indebtedness of such Note Guarantor or any trustee of or agent hereof shall be entitled to give the notice; provided , however , that, if an issue of Senior Indebtedness of such Note Guarantor has a Representative, only the Representative shall be entitled to give the notice.

The Trustee in its individual or any other capacity shall be entitled to hold Senior Indebtedness of a Note Guarantor with the same rights it would have if it were not Trustee. The Registrar and the Paying Agent shall be entitled to do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article 13 with respect to any Senior Indebtedness of a Note Guarantor which may at any time be held by it, to the same extent as any other holder of such Senior Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing in this Article 13 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof or any other Section of this Indenture.

 

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Section 13.10. Distribution or Notice to Representative.

Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness of a Note Guarantor, the distribution may be made and the notice given to their Representative (if any).

Section 13.11. Article 13 Not To Prevent Events of Default or Limit Right To Demand Payment.

The failure of a Note Guarantor to make a payment pursuant to its Note Guarantee by reason of any provision in this Article 13 shall not be construed as preventing the occurrence of a default by such Note Guarantor under its Note Guarantee. Nothing in this Article 13 shall have any effect on the right of the Holders or the Trustee to make a demand for payment on a Note Guarantor pursuant to Article 11 hereof.

Section 13.12. Trust Moneys Not Subordinated.

Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of Government Obligations held in trust by the Trustee for the payment of principal of and interest on the Notes pursuant to Article 8 or Article 15 hereof shall not be subordinated to the prior payment of any Senior Indebtedness of any Note Guarantor or subject to the restrictions set forth in this Article 13, and none of the Holders shall be obligated to pay over any such amount to such Note Guarantor or any holder of Senior Indebtedness of such Note Guarantor or any other creditor of such Note Guarantor, provided that the subordination provisions of this Article 13 were not violated at the time the applicable amounts were deposited in trust pursuant to Article 8 or Article 15 hereof, as the case may be.

Section 13.13. Trustee Entitled To Rely.

Upon any payment or distribution pursuant to this Article 13, the Trustee and the Holders shall be entitled to conclusively rely (a) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 13.02 hereof are pending, (b) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (c) upon the Representatives of Senior Indebtedness of a Note Guarantor for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of such Senior Indebtedness and other Indebtedness of such Note Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 13. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Indebtedness of a Note Guarantor to participate in any payment or distribution pursuant to this Article 13, the Trustee shall be entitled to request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article 13, and, if such evidence is not furnished, the Trustee shall be entitled to defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 hereof shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article 13.

Section 13.14. Trustee To Effectuate Subordination.

A Holder by its acceptance of a Note agrees to be bound by this Article 13 and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be necessary or appropriate to effectuate the subordination between the Holders and the holders of Senior Indebtedness of a Note Guarantor as provided in this Article 13 and appoints the Trustee as attorney-in-fact for any and all such purposes.

 

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Section 13.15. Trustee Not Fiduciary for Holders of Senior Indebtedness of Note Guarantors .

The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of a Note Guarantor and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders or such Note Guarantor or any other Person, money or assets to which any holders of Senior Indebtedness of such Note Guarantor shall be entitled by virtue of this Article 13 or otherwise.

Section 13.16. Reliance by Holders of Senior Indebtedness of a Note Guarantor on Subordination Provisions .

Each Holder by accepting a Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness of a Note Guarantor, whether such Senior Indebtedness was created or acquired before or after the issuance of the Notes, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness and such holder of such Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness.

Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness of a Note Guarantor may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Trustee or the Holders and without impairing or releasing the subordination provided in this Article 13 or the obligations hereunder of the Holders to the holders of the Senior Indebtedness of such Note Guarantor, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness of such Note Guarantor, or otherwise amend or supplement in any manner Senior Indebtedness of such Note Guarantor, or any instrument evidencing the same or any agreement under which Senior Indebtedness of such Note Guarantor is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness of such Note Guarantor; (iii) release any Person liable in any manner for the payment or collection of Senior Indebtedness of such Note Guarantor; and (iv) exercise or refrain from exercising any rights against such Note Guarantor and any other Person.

ARTICLE 14

SUBORDINATION OF HOLDINGS GUARANTEE

Section 14.01. Agreement To Subordinate .

Holdings agrees, and each Holder by accepting a Note agrees, that the obligations of Holdings under its Holdings Guarantee are subordinated in all respects, including right of payment, to the extent and in the manner provided in this Article 14, to the prior payment in full of all existing and future Holdings Senior Indebtedness and that the subordination is for the benefit of and enforceable by the holders of such Holdings Senior Indebtedness. Holdings’ obligations under its Holdings Guarantee shall in all respects rank pari passu in right of payment with all existing and future Holdings Pari Passu Indebtedness, and will be senior in right of payment to all existing and future Holdings Subordinated Indebtedness; and only Indebtedness of Holdings that is Holdings Senior Indebtedness shall rank senior to the obligations of Holdings under its Holdings Guarantee in accordance with the provisions set forth herein. All provisions of this Article 14 shall be subject to Section 14.12.

 

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Section 14.02. Liquidation, Dissolution, Bankruptcy .

Upon any payment or distribution of the assets of Holdings to creditors upon a total or partial liquidation or a total or partial dissolution of Holdings or in a reorganization of or similar proceeding relating to Holdings or its property:

(1) the holders of Holdings Senior Indebtedness shall be entitled to receive payment in full in cash of such Holdings Senior Indebtedness (including interest accruing after, or which would accrue but for, the commencement of any such proceeding at the rate specified in the applicable Holdings Senior Indebtedness, whether or not a claim for such interest would be allowed) before Holders of the Notes shall be entitled to receive any payment; and

(2) until the Holdings Senior Indebtedness is paid in full in cash, any payment or distribution to which Holders of the Notes would be entitled but for the subordination provisions of this Article 14 shall be made to holders of such Holdings Senior Indebtedness as their interests may appear, except that Holders of the Notes may receive and retain (x) so long as the Holders are not in the same or a higher class of creditors in such liquidation, dissolution or proceeding as the holders of the Holdings Senior Indebtedness, shares of stock and any debt securities that are subordinated to Holdings Senior Indebtedness to at least the same extent as the Holdings Guarantee (such stock and debt securities referred to herein as “ Holdings Permitted Junior Securities ”) and (y) payments or deposits made pursuant to Article 8 or Article 15 so long as, on the date or dates the respective amounts were paid into the trust, such payments were made with respect to the Notes without violating the subordination provisions described herein; and

(3) if a distribution is made to Holders of the Notes that, due to the subordination provisions, should not have been made to them, such Holders of the Notes are required to hold it in trust for the holders of Holdings Senior Indebtedness and pay it over to them as their interests may appear.

Section 14.03. Default on Holdings Senior Indebtedness .

Holdings shall not make any payment pursuant to its Holdings Guarantee (or pay any other Obligations relating to its Holdings Guarantee, including Additional Interest, fees, costs, expenses, indemnities and rescission or damage claims) and may not purchase, redeem or otherwise retire any Notes (collectively, “ pay its Holdings Guarantee ”) (except that Holders of the Notes may receive and retain (x) Holdings Permitted Junior Securities and (y) payments or deposits made pursuant to Article 8 or Article 15), if either of the following occurs (a “ Holdings Payment Default ”):

(1) a default in the payment of the principal of, premium, if any, or interest on any Holdings Senior Indebtedness occurs and is continuing or any other amount owing in respect of any Holdings Senior Indebtedness is not paid when due, or

(2) any other default on Holdings Senior Indebtedness occurs and the maturity of such Holdings Senior Indebtedness is accelerated in accordance with its terms,

unless, in either case, the Holdings Payment Default has been cured or waived and any such acceleration has been rescinded or such Holdings Senior Indebtedness has been paid in full in cash; provided , however , that Holdings shall be entitled to pay its Holdings Guarantee without regard to the foregoing if Holdings and the Trustee receive written notice approving such payment from the Holdings Representatives of all Holdings Senior Indebtedness with respect to which the Holdings Payment Default has occurred and is continuing.

 

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During the continuance of any default (other than a Holdings Payment Default) (a “ Holdings Non-Payment Default ”) with respect to any Holdings Senior Indebtedness pursuant to which the maturity thereof may be accelerated without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, Holdings shall not pay its Holdings Guarantee (except in the form of Holdings Permitted Junior Securities) for a period (a “ Holdings Guarantee Payment Blockage Period ”) commencing upon the receipt by the Trustee (with a copy to Holdings and the Issuer) of written notice (a “ Holdings Guarantee Blockage Notice ”) of such Holdings Non-Payment Default from the Holdings Representative of such Holdings Senior Indebtedness specifying an election to effect a Holdings Guarantee Payment Blockage Period and ending 179 days thereafter unless earlier terminated as provided below. The Holdings Guarantee Payment Blockage Period shall end earlier if such Holdings Guarantee Payment Blockage Period is terminated (i) by written notice to the Trustee, Holdings and the Issuer from the Person or Persons who gave such Holdings Guarantee Blockage Notice; (ii) because the default giving rise to such Holdings Guarantee Blockage Notice is cured, waived or otherwise no longer continuing; or (iii) because such Holdings Senior Indebtedness has been repaid in full in cash.

Notwithstanding the provisions described in the immediately preceding paragraph (but subject to the provisions contained in the first paragraph of this Section 14.03 and Section 14.02 hereof), unless the holders of such Holdings Senior Indebtedness or the Holdings Representative of such Holdings Senior Indebtedness shall have accelerated the maturity of such Holdings Senior Indebtedness or a Holdings Payment Default exists, Holdings shall be permitted to resume paying its Holdings Guarantee after the end of such Holdings Guarantee Payment Blockage Period. Holdings shall not be subject to more than one Holdings Guarantee Payment Blockage Period in any consecutive 360-day period, irrespective of the number of defaults with respect to Holdings Senior Indebtedness during such period. However, in no event shall the total number of days during which any Holdings Guarantee Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate during any consecutive 360-day period. Notwithstanding the foregoing, however, no default that existed or was continuing on the date of delivery of any Holdings Guarantee Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Holdings Guarantee Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenants during the period after the date of delivery of a Holdings Guarantee Blockage Notice, that, in either case, would give rise to a Holdings Non-Payment Default pursuant to any provisions of the Holdings Senior Indebtedness under which a Holdings Non-Payment Default previously existed or was continuing shall constitute a new Holdings Non-Payment Default for this purpose).

Section 14.04. Demand for Payment .

If payment of the Notes is accelerated because of an Event of Default and a demand for payment is made on Holdings pursuant to Article 12 hereof, the Issuer, the Trustee or Holdings shall promptly notify the holders of the Holdings Senior Indebtedness or the Holdings Representative of such Holdings Senior Indebtedness of such demand; provided that any failure to give such notice shall have no effect whatsoever on the provisions of this Article 14. If any Holdings Senior Indebtedness is outstanding, Holdings may not pay its Holdings Guarantee until five Business Days after the Holdings Representatives of all such Holdings Senior Indebtedness receive notice of such acceleration and, thereafter, may pay its Holdings Guarantee only if this Indenture otherwise permits payment at that time.

Section 14.05. When Distribution Must Be Paid Over .

If a distribution is made to Holders that, due to the subordination provisions, should not have been made to them, such Holders are required to hold it in trust for the holders of Holdings Senior Indebtedness and pay it over to them as their interests may appear.

 

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Section 14.06. Subrogation .

After all Holdings Senior Indebtedness is paid in full and until the Notes are paid in full, Holders shall be subrogated to the rights of holders of such Holdings Senior Indebtedness to receive distributions applicable to such Holdings Senior Indebtedness. A distribution made under this Article 14 to holders of such Holdings Senior Indebtedness which otherwise would have been made to Holders is not, as between Holdings and Holders, a payment by Holdings on such Holdings Senior Indebtedness.

Section 14.07. Relative Rights .

This Article 14 defines the relative rights of Holders and holders of Holdings Senior Indebtedness. Nothing in this Indenture shall:

(1) impair, as between Holdings and Holders, the obligation of Holdings, which is absolute and unconditional, to make payments under its Holdings Guarantee in accordance with its terms;

(2) prevent the Trustee or any Holder from exercising its available remedies upon a default by Holdings under its obligations with respect to its Holdings Guarantee, subject to the rights of holders of Holdings Senior Indebtedness to receive payments or distributions otherwise payable to Holders and such other rights of such holders of Holdings Senior Indebtedness as set forth herein; or

(3) affect the relative rights of Holders and creditors of Holdings other than their rights in relation to holders of Holdings Senior Indebtedness.

Section 14.08. Subordination May Not Be Impaired by Holdings .

No right of any holder of Holdings Senior Indebtedness to enforce the subordination of the obligations of Holdings under its Holdings Guarantee shall be impaired by any act or failure to act by Holdings or by its failure to comply with this Indenture.

Section 14.09. Rights of Trustee and Paying Agent .

Notwithstanding Section 14.03 hereof, the Trustee or any Paying Agent may continue to make payments on the Notes and shall not be charged with knowledge of the existence of facts that would prohibit the making of any payments unless, not less than three Business Days prior to the date of such payment, a Trust Officer at the Corporate Trust Office of the Trustee receives notice satisfactory to him that payments may not be made under this Article 14; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 7.01, shall be entitled in all respects to assume that no such facts exist; provided , however , that if a Trust Officer of the Trustee shall not have received, at least three Business Days prior to the date upon which by the terms hereof any such money may become payable for any purpose (including, without limitation, the payment of principal, premium, if any, interest, Additional Interest, the redemption price or the Change of Control Payment, as the case may be, in respect of any Note), the notice with respect to such money provided for in this Section 14.09 then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within three Business Days prior to such date. Holdings, a Holdings Representative, a holder of Holdings Senior Indebtedness or any trustee of or agent thereof shall be entitled to give the notice; provided , however , that, if an issue of Holdings Senior Indebtedness has a Holdings Representative, only the Holdings Representative shall be entitled to give the notice.

 

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The Trustee in its individual or any other capacity shall be entitled to hold Holdings Senior Indebtedness with the same rights it would have if it were not Trustee. The Registrar and the Paying Agent shall be entitled to do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article 14 with respect to any Holdings Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of such Holdings Senior Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing in this Article 14 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof or any other Section of this Indenture.

Section 14.10. Distribution or Notice to Holdings Representative .

Whenever a distribution is to be made or a notice given to holders of Holdings Senior Indebtedness, the distribution may be made and the notice given to their Holdings Representative (if any).

Section 14.11. Article 14 Not To Prevent Events of Default or Limit Right To Demand Payment .

The failure of Holdings to make a payment pursuant to the Holdings Guarantee by reason of any provision in this Article 14 shall not be construed as preventing a Default. Nothing in this Article 14 shall have any effect on the right of the Holders or the Trustee to accelerate the maturity of the Notes.

Section 14.12. Trust Moneys Not Subordinated .

Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of Government Obligations held in trust by the Trustee for the payment of principal of and interest on the Notes pursuant to Article 8 or Article 15 hereof shall not be subordinated to the prior payment of any Holdings Senior Indebtedness or subject to the restrictions set forth in this Article 14, and none of the Holders shall be obligated to pay over any such amount to Holdings or any holder of Holdings Senior Indebtedness or any other creditor of Holdings, provided that the subordination provisions of this Article 14 were not violated at the time the applicable amounts were deposited in trust pursuant to Article 8 or Article 15 hereof, as the case may be.

Section 14.13. Trustee Entitled To Rely .

Upon any payment or distribution pursuant to this Article 14, the Trustee and the Holders shall be entitled to conclusively rely (a) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 14.02 hereof are pending, (b) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (c) upon the Holdings Representatives of Holdings Senior Indebtedness for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of such Holdings Senior Indebtedness and other Indebtedness of Holdings, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 14. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Holdings Senior Indebtedness to participate in any payment or distribution pursuant to this Article 14, the Trustee shall be entitled to request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Holdings Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article 14, and, if such evidence is not furnished, the Trustee shall be entitled to defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 hereof shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article 14.

 

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Section 14.14. Trustee To Effectuate Subordination .

A Holder by its acceptance of a Note agrees to be bound by this Article 14 and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be necessary or appropriate to effectuate the subordination between the Holders and the holders of Holdings Senior Indebtedness as provided in this Article 14 and appoints the Trustee as attorney-in-fact for any and all such purposes.

Section 14.15. Trustee Not Fiduciary for Holders of Holdings Senior Indebtedness .

The Trustee shall not be deemed to owe any fiduciary duty to the holders of Holdings Senior Indebtedness and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders or Holdings or any other Person, money or assets to which any holders of Holdings Senior Indebtedness shall be entitled by virtue of this Article 14 or otherwise.

Section 14.16. Reliance by Holders of Holdings Senior Indebtedness on Subordination Provisions .

Each Holder by accepting a Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Holdings Senior Indebtedness, whether such Holdings Senior Indebtedness was created or acquired before or after the issuance of the Notes, to acquire and continue to hold, or to continue to hold, such Holdings Senior Indebtedness and such holder of such Holdings Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Holdings Senior Indebtedness.

Without in any way limiting the generality of the foregoing paragraph, the holders of Holdings Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Trustee or the Holders and without impairing or releasing the subordination provided in this Article 14 or the obligations hereunder of the Holders to the holders of the Holdings Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Holdings Senior Indebtedness, or otherwise amend or supplement in any manner Holdings Senior Indebtedness, or any instrument evidencing the same or any agreement under which Holdings Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Holdings Senior Indebtedness; (iii) release any Person liable in any manner for the payment or collection of Holdings Senior Indebtedness; and (iv) exercise or refrain from exercising any rights against Holdings and any other Person.

ARTICLE 15

SATISFACTION AND DISCHARGE

Section 15.01. Satisfaction and Discharge .

(a) This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights of transfer or exchange of Notes, as expressly provided for in this Indenture) as to all outstanding Notes when either: (i) all Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust) have been delivered to the Trustee for cancellation; or (ii) all Notes (a) have become due and payable, (b) will become due and payable at their Stated Maturity within one year or (c) if redeemable at the option of the Issuer, are to be called for redemption within one year under

 

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arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer has irrevocably deposited or caused to be deposited with the Trustee, as trust funds in trust solely for the benefit of the Holders of the Notes, cash in U.S. dollars, U.S. dollar Government Obligations, or a combination thereof, in such amounts as will be sufficient in the written opinion of a firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Dollar-denominated Government Obligations have been so deposited) without consideration of any reinvestment of interest to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal of, premium, if any, and accrued interest on the Notes to the date of deposit together with irrevocable instructions from the Issuer directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

(b) the Issuer, Holdings and/or the Note Guarantors have paid or caused to be paid all other sums payable under this Indenture; and

(c) the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, if money shall have been deposited with the Trustee pursuant to sub-clause (ii) of clause (a) of this Section 15.01, the provisions of Section 15.02 and Section 8.06 shall survive.

Section 15.02. Application of Trust Money .

Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 15.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium and Additional Interest, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

If the Trustee or Paying Agent is unable to apply any money or Government Obligations in accordance with Section 15.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer’s, Holdings’ and any Note Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 15.01 hereof; provided that if the Issuer has made any payment of principal of, premium and Additional Interest, if any, or interest on any Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Obligations held by the Trustee or Paying Agent.

ARTICLE 16

MISCELLANEOUS

Section 16.01. TIA Controls .

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA Section 318(c), the imposed duties shall control.

 

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Section 16.02. Notices .

Any notice or communication by the Issuer, Holdings, any Note Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), fax or overnight air courier guaranteeing next day delivery, to the others’ addresses:

If to the Issuer and/or Holdings and/or any Note Guarantor:

c/o Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

If to the Trustee:

The Bank of New York Mellon Trust Company, N.A.

525 William Penn Place, 38 th Floor

Pittsburgh, Pennsylvania 15259

Fax No.: (412) 234-7535

Attention: Corporate Trust Administration

The Issuer, Holdings, any Note Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five calendar days after being deposited in the mail, postage prepaid, if mailed by first-class mail; when receipt acknowledged, if faxed; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery; provided that any notice or communication delivered to the Trustee shall be deemed effective upon actual receipt thereof.

Any notice or communication to a Holder shall be mailed by first-class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar or by other electronic means or such other delivery system as the Trustee agrees to accept. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

If the Issuer mails a notice or communication to Holders, they shall mail a copy to the Trustee and each Agent at the same time.

The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods. If the party elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance

 

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with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

Notwithstanding anything to the contrary contained herein, as long as the Notes are in the form of a Global Note, notice to the Holders may be made electronically in accordance with procedures of the Depositary.

Section 16.03. Communication by Holders of Notes with Other Holders of Notes .

Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).

Section 16.04. Certificate and Opinion as to Conditions Precedent .

Upon any request or application by the Issuer, Holdings or any of the Note Guarantors to the Trustee to take any action under this Indenture, the Issuer, Holdings or such Note Guarantor, as the case may be, shall furnish to the Trustee:

(i) An Officer’s Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 16.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(ii) An Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 16.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

Section 16.05. Statements Required in Certificate or Opinion .

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to Section 4.04 hereof or TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include:

(i) a statement that the Person making such certificate or opinion has read such covenant or condition;

(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(iii) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may be limited to reliance on an Officer’s Certificate as to matters of fact); and

 

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(iv) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

Section 16.06. Rules by Trustee and Agents .

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

Section 16.07. No Personal Liability of Directors, Officers, Employees and Stockholders .

No director, officer, employee, manager, incorporator or holder of any Equity Interest of the Issuer, Holdings or any Note Guarantor or any direct or indirect parent corporation, as such, shall have any liability for any obligations of the Issuer, Holdings or the Note Guarantors under the Notes, the Holdings Guarantee, the Note Guarantees or this Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

Section 16.08. Governing Law .

THIS INDENTURE, THE NOTES, THE HOLDINGS GUARANTEE AND ANY NOTE GUARANTEE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 16.09. Waiver of Jury Trial .

EACH OF THE ISSUER, HOLDINGS, THE NOTE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES, THE HOLDINGS GUARANTEE, THE NOTE GUARANTEES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 16.10. Force Majeure .

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused by, directly or indirectly, forces beyond its reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services.

Section 16.11. No Adverse Interpretation of Other Agreements .

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuer or its Restricted Subsidiaries, Holdings or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 16.12. Successors .

All agreements of the Issuer in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of Holdings and

 

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each Note Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 11.06 and Section 12.06 hereof.

Section 16.13. Severability .

In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 16.14. Counterpart Originals .

The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

Section 16.15. Table of Contents, Headings, etc .

The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

Section 16.16. Qualification of Indenture .

The Issuer, Holdings and the Note Guarantors shall qualify this Indenture under the TIA in accordance with the terms and conditions of the Registration Rights Agreement and shall pay all reasonable costs and expenses (including attorneys’ fees and expenses for the Issuer, Holdings, the Note Guarantors and the Trustee) incurred in connection therewith, including, but not limited to, costs and expenses of qualification of this Indenture and the Notes and printing this Indenture and the Notes. The Trustee shall be entitled to receive from the Issuer, Holdings and the Note Guarantors any such Officer’s Certificates, Opinions of Counsel or other documentation as it may reasonably request in connection with any such qualification of this Indenture under the TIA.

[ Signatures on following page ]

 

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

 

      REALOGY CORPORATION
By   /s/ Anthony E. Hull
  Name:   Anthony E. Hull
  Title:   Chief Financial Officer

 

      DOMUS HOLDINGS CORP.
By   /s/ Anthony E. Hull
  Name:   Anthony E. Hull
  Title:   Chief Financial Officer

[Senior Subordinated Notes Indenture]


CARTUS CORPORATION

CDRE TM LLC

NRT INSURANCE AGENCY, INC.

REALOGY OPERATIONS LLC

REALOGY SERVICES GROUP LLC

REALOGY SERVICES VENTURE PARTNER LLC

SOTHEBY’S INTERNATIONAL REALTY LICENSEE LLC

WREM, INC.

 

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Chief Financial Officer

[Senior Subordinated Notes Indenture]


ASSOCIATES REALTY, INC.

CARTUS ASSET RECOVERY CORPORATION

CARTUS PARTNER CORPORATION

FEDSTATE STRATEGIC CONSULTING, INCORPORATED

J.W. RIKER-NORTHERN R.I., INC.

LAKECREST TITLE, LLC

NRT PHILADELPHIA LLC

REFERRAL NETWORK LLC

THE CORCORAN GROUP EAST SIDE, INC.

 

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Executive Vice President & Treasurer

[Senior Subordinated Notes Indenture]


AMERICAN TITLE COMPANY OF HOUSTON

ATCOH HOLDING COMPANY

BURNET TITLE LLC

BURNET TITLE HOLDING LLC

BURROW ESCROW SERVICES, INC.

CORNERSTONE TITLE COMPANY

EQUITY TITLE COMPANY

EQUITY TITLE MESSENGER SERVICE HOLDING LLC

FIRST CALIFORNIA ESCROW CORPORATION

FRANCHISE SETTLEMENT SERVICES LLC

GUARDIAN HOLDING COMPANY

GUARDIAN TITLE AGENCY, LLC

GUARDIAN TITLE COMPANY

GULF SOUTH SETTLEMENT SERVICES, LLC

KEYSTONE CLOSING SERVICES LLC

MARKET STREET SETTLEMENT GROUP LLC

MID-ATLANTIC SETTLEMENT SERVICES LLC

NATIONAL COORDINATION ALLIANCE LLC

NRT SETTLEMENT SERVICES OF MISSOURI LLC

NRT SETTLEMENT SERVICES OF TEXAS LLC

PROCESSING SOLUTIONS LLC

SECURED LAND TRANSFERS LLC

ST. JOE TITLE SERVICES LLC

TAW HOLDING INC.

TEXAS AMERICAN TITLE COMPANY

TITLE RESOURCE GROUP AFFILIATES HOLDINGS LLC

TITLE RESOURCE GROUP HOLDINGS LLC

TITLE RESOURCE GROUP LLC

TITLE RESOURCE GROUP SERVICES LLC

TITLE RESOURCES INCORPORATED

TRG SERVICES, ESCROW, INC.

TRG SETTLEMENT SERVICES, LLP

WAYDAN TITLE, INC.

WEST COAST ESCROW COMPANY

 

By:   /s/ Thomas N. Rispoli
Name:   Thomas N. Rispoli
Title:   Chief Financial Officer

[Senior Subordinated Notes Indenture]


BETTER HOMES AND GARDENS REAL ESTATE LLC

BETTER HOMES AND GARDENS REAL ESTATE LICENSEE LLC

CENTURY 21 REAL ESTATE LLC

CGRN, INC.

COLDWELL BANKER LLC

COLDWELL BANKER REAL ESTATE LLC

ERA FRANCHISE SYSTEMS LLC

GLOBAL CLIENT SOLUTIONS LLC

ONCOR INTERNATIONAL LLC

REALOGY FRANCHISE GROUP LLC

REALOGY GLOBAL SERVICES LLC

REALOGY LICENSING LLC

SOTHEBY’S INTERNATIONAL REALTY AFFILIATES LLC

WORLD REAL ESTATE MARKETING LLC

 

By:   /s/ Andrew G. Napurano
Name:   Andrew G. Napurano
Title:   Chief Financial Officer

[Senior Subordinated Notes Indenture]


FSA MEMBERSHIP SERVICES, LLC
By:   /s/ Marilyn J. Wasser
Name:   Marilyn J. Wasser
Title:   Executive Vice President

[Senior Subordinated Notes Indenture]


ALPHA REFERRAL NETWORK LLC

ASSOCIATED CLIENT REFERRAL LLC

ASSOCIATES REALTY NETWORK

BURGDORFF LLC

BURGDORFF REFERRAL ASSOCIATES LLC

BURNET REALTY LLC

CAREER DEVELOPMENT CENTER, LLC

COLDWELL BANKER COMMERCIAL PACIFIC PROPERTIES LLC

COLDWELL BANKER PACIFIC PROPERTIES LLC

COLDWELL BANKER REAL ESTATE SERVICES LLC

COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY

COLDWELL BANKER RESIDENTIAL BROKERAGE LLC

COLDWELL BANKER RESIDENTIAL REAL ESTATE LLC

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK, INC.

COLORADO COMMERCIAL, LLC

HOME REFERRAL NETWORK LLC

JACK GAUGHEN LLC

NRT ARIZONA LLC

NRT ARIZONA COMMERCIAL LLC

NRT ARIZONA REFERRAL LLC

NRT COLORADO LLC

NRT COLUMBUS LLC

NRT COMMERCIAL LLC

NRT COMMERCIAL UTAH LLC

NRT DEVELOPMENT ADVISORS LLC

NRT DEVONSHIRE LLC

NRT HAWAII REFERRAL, LLC

NRT LLC

NRT MID-ATLANTIC LLC

 

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

[Senior Subordinated Notes Indenture]


NRT MISSOURI LLC

NRT MISSOURI REFERRAL NETWORK LLC

NRT NEW ENGLAND LLC

NRT NEW YORK LLC

NRT NORTHFORK LLC

NRT PITTSBURGH LLC

NRT REFERRAL NETWORK LLC

NRT RELOCATION LLC

NRT REOEXPERTS LLC

NRT SUNSHINE INC.

NRT TEXAS LLC

NRT UTAH LLC

REAL ESTATE REFERRAL LLC

REAL ESTATE REFERRALS LLC

REAL ESTATE SERVICES LLC

REFERRAL ASSOCIATES OF NEW ENGLAND LLC

REFERRAL NETWORK, LLC

REFERRAL NETWORK PLUS, INC.

SOTHEBY’S INTERNATIONAL REALTY, INC.

SOTHEBY’S INTERNATIONAL REALTY REFERRAL COMPANY, LLC

THE SUNSHINE GROUP (FLORIDA) LTD. CORP.

THE SUNSHINE GROUP, LTD.

VALLEY OF CALIFORNIA, INC.

 

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

[Senior Subordinated Notes Indenture]


THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:   /s/ Justin Huff
  Name:   Justin Huff
  Title:   Senior Associate

[Senior Subordinated Notes Indenture]


Appendix A

PROVISIONS RELATING TO INITIAL NOTES,

ADDITIONAL NOTES AND EXCHANGE NOTES

Section 1.1 Definitions.

(a) Capitalized Terms.

Capitalized terms used but not defined in this Appendix A have the meanings given to them in the Indenture. The following capitalized terms have the following meanings:

Applicable Procedures ” means, with respect to any transfer or transaction involving a Regulation S Global Note or beneficial interest therein, the rules and procedures of the Depositary for such Global Note, Euroclear and Clearstream, in each case to the extent applicable to such transaction and as in effect from time to time.

Clearstream ” means Clearstream Banking, Société Anonyme, or any successor securities clearing agency.

Euroclear ” means the Euroclear Clearance System or any successor securities clearing agency.

IAI ” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

Institutional Accredited Investor Notes ” means all Definitive Notes offered and sold to IAIs in reliance on Regulation D under the Securities Act in connection with the exchange of the Existing Senior Subordinated Notes for Notes.

QIB ” means a “qualified institutional buyer” as defined in Rule 144A.

Regulation S ” means Regulation S promulgated under the Securities Act.

Regulation S Notes ” means all Notes offered and sold outside the United States in reliance on Regulation S.

Restricted Period ”, with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (a) the day on which such Notes are first offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S, notice of which day shall be promptly given by the Issuer to the Trustee, and (b) the date of issuance with respect to any such Notes (with respect to Initial Notes, only clause (b) shall be applicable).

Rule 501 ” means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

Rule 144 ” means Rule 144 promulgated under the Securities Act.

Rule 144A ” means Rule 144A promulgated under the Securities Act.

Rule 144A Notes ” means all Notes offered and sold to QIBs in reliance on Rule 144A.

 


Rule 904 ” means Rule 904 promulgated under the Securities Act.

(b) Other Definitions.

 

Term:

   Defined in Section:  

“Agent Members”

     2.1 (c) 

“Automatic Exchange”

     2.3 (i) 

“Automatic Exchange Date”

     2.3 (i) 

“Automatic Exchange Notice”

     2.3 (i) 

“Automatic Exchange Notice Date”

     2.3 (i) 

“Global Note”

     2.1 (b) 

“IAI Global Note”

     2.1 (b) 

“Regulation S Global Note”

     2.1 (b) 

“Regulation S Permanent Global Note”

     2.1 (b) 

“Regulation S Temporary Global Note”

     2.1 (b) 

“Restricted Note”

     2.3 (i) 

“Rule 144A Global Note”

     2.1 (b) 

“Unrestricted Note”

     2.3 (i) 

Section 2.1 Form and Dating

(a) The Initial Notes issued on the date hereof will be offered and sold by the Issuer only to (1) QIBs in reliance on Section 4(2) of the Securities Act and (2) IAIs in reliance on Regulation D under the Securities Act. Such Initial Notes may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and IAIs in accordance with Rule 501. Subsequent to the Issue Date, Additional Notes may be (i) offered and sold by the Issuer to initial purchasers and (ii) resold, initially only to (1) QIBs in reliance on Rule 144A and (2) Persons other than U.S. Persons (as defined in Regulation S). Such Additional Notes may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and IAIs in accordance with Rule 501.

(b)  Global Notes. Rule 144A Notes shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form (collectively, the “ Rule 144A Global Note ”), without interest coupons and bearing the Global Notes Legend, the Restricted Notes Legend and the OID Legend, which shall be registered in the name of the Depositary or a nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture. Regulation S Notes shall be issued initially in the form of one or more global Notes (collectively, the “ Regulation S Temporary Global Note ” and together with the Regulation S Permanent Global Note (identified below) the “ Regulation S Global Note ”), without interest coupons and bearing the Global Notes Legend, the Restricted Notes Legend and the OID Legend, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture to accommodate transfers of beneficial interests in the Notes to non-U.S. Persons subsequent to the initial distribution. One or more global Notes in definitive, fully registered form without interest coupons and bearing the Global Notes Legend, the Restricted Notes Legend and the OID Legend (collectively, the “ IAI Global Note ”) shall also be issued on the Issue Date, deposited with the Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture to accommodate transfers of beneficial interests in the Notes to IAIs subsequent to the initial distribution in the Existing Notes Exchange Offer. Beneficial ownership interests

 

Appendix-2


in the Regulation S Global Note shall not be exchangeable for interests in the Rule 144A Global Note, the IAI Global Note or any other Note without a Restricted Notes Legend until the expiration of the Restricted Period. The Rule 144A Global Note, the IAI Global Note, the Regulation S Temporary Global Note and the Regulation S Permanent Global Note are each referred to herein as a “ Global Note ” and are collectively referred to herein as “ Global Notes ”, provided that the term “Global Note” when used in Sections 2.1(c), 2.3(f), 2.3(g)(i), 2.3(h)(i), 2.3(h)(ii) and 2.4 shall also include any Note in global form issued in connection with an Exchange Offer. The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee and on the schedules thereto as hereinafter provided.

The Restricted Period shall be terminated upon certification in form reasonably satisfactory to the Trustee, if required, that beneficial ownership interests in the Regulation S Temporary Global Note are owned either by non-U.S. Persons or U.S. Persons who purchased such interests in a transaction that did not require registration under the Securities Act (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who shall take delivery of a beneficial ownership interest in a 144A Global Note bearing a Restricted Notes Legend, all as contemplated by this Appendix A).

Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in a Global Note (the “Regulation S Permanent Global Note”) pursuant to the applicable procedures of the Depositary. Simultaneously with the authentication of the Regulation S Permanent Global Note, the Trustee shall cancel the Regulation S Temporary Global Note.

The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Security and the Regulation S Permanent Global Security that are held by participants through Euroclear or Clearstream.

(c) Institutional Accredited Investor Notes. Institutional Accredited Investor Notes shall be issued initially in the form of one or more permanent Definitive Notes, without interest coupons and bearing the Restricted Notes Legend, the Definitive Notes Legend and the OID Legend, which shall be registered in the name of the beneficial owner or owners of such Note (or the nominee of such beneficial owner or owners) and delivered to the respective beneficial owner or owners (or the nominee of such beneficial owner or owners). Upon issuance, any such Institutional Accredited Investor Notes shall be duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture.

(d) Book-Entry Provisions. This Section 2.1(d) shall apply only to a Global Note deposited with or on behalf of the Depositary.

The Issuer shall execute and the Trustee shall, in accordance with this Section 2.1(d) and Section 2.2 and pursuant to an order of the Issuer signed by one Officer of the Issuer, authenticate and deliver initially one or more Global Notes that (i) shall be registered in the name of the Depositary for such Global Note or Global Notes or the nominee of such Depositary and (ii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions or held by the Trustee as Custodian.

Members of, or participants in, the Depositary (“ Agent Members ”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary or by the Trustee as Custodian or under such Global Note, and the Depositary may be treated by the Issuer, the

 

Appendix-3


Trustee and any agent of the Issuer or the Trustee as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Note.

(e) Definitive Notes. Except as provided in Section 2.3 or 2.4, owners of beneficial interests in Global Notes will not be entitled to receive physical delivery of certificated Notes.

Section 2.2 Authentication. The Trustee shall authenticate and make available for delivery upon an Issuer Order (a) Initial Notes for original issue on the date hereof in an aggregate principal amount of $10,282,000, (b) subject to the terms of this Indenture, Additional Notes, (c) the Exchange Notes for issue only in an Exchange Offer and pursuant to the Registration Rights Agreement and for a like principal amount of Initial Notes exchanged pursuant thereto and (d) upon an Automatic Exchange, Unrestricted Notes. Such Issuer Order shall specify the amount of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated and whether the Notes are to be Initial Notes, Additional Notes, Exchange Notes or Unrestricted Notes.

Section 2.3 Transfer and Exchange.

(a)  Transfer and Exchange of Definitive Notes. When Definitive Notes are presented to the Registrar with a request:

(i) to register the transfer of such Definitive Notes; or

(ii) to exchange such Definitive Notes for an equal principal amount of Definitive Notes of other authorized denominations,

the Registrar shall register the transfer or make the exchange as requested if the reasonable requirements for such transaction are met; provided , however , that the Definitive Notes surrendered for transfer or exchange:

(1) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing; and

(2) in the case of Transfer Restricted Notes, are accompanied by the following additional information and documents, as applicable:

(A) if such Definitive Notes are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect (in the form set forth on the reverse side of the Initial Note); or

(B) if such Definitive Notes are being transferred to the Issuer, a certification to that effect (in the form set forth on the reverse side of the Initial Note); or

(C) if such Definitive Notes are being transferred pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or in reliance upon another exemption from the registration requirements of the Securities Act, (x) a certification to that effect (in the form set forth in Exhibit C ) and (y) if the Issuer so

 

Appendix-4


requests, an opinion of counsel or other evidence reasonably satisfactory to them as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i).

(b)  Restrictions on Transfer of a Definitive Note for a Beneficial Interest in a Global Note. A Definitive Note may not be exchanged for a beneficial interest in a Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Registrar, together with:

(i) certification (in the form set forth on the reverse side of the Initial Note) that such Definitive Note is being transferred (1) to a QIB in accordance with Rule 144A, (2) to an IAI that has furnished to the Trustee a signed letter substantially in the form of Exhibit C or (3) outside the United States in an offshore transaction within the meaning of Regulation S and in compliance with Rule 904 under the Securities Act; and

(ii) written instructions directing the Trustee to make, or to direct the Custodian to make, an adjustment on its books and records with respect to such Global Note to reflect an increase in the aggregate principal amount of the Notes represented by the Global Note, such instructions to contain information regarding the Depositary account to be credited with such increase, then the Trustee shall cancel such Definitive Note and cause, or direct the Custodian to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Custodian, the aggregate principal amount of Notes represented by the Global Note to be increased by the aggregate principal amount of the Definitive Note to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Note equal to the principal amount of the Definitive Note so canceled. If no Global Notes are then outstanding and the Global Note has not been previously exchanged for certificated securities pursuant to Section 2.4, the Issuer shall issue and the Trustee shall authenticate, upon an Issuer Order, a new Global Note in the appropriate principal amount.

(c)  Transfer and Exchange of Global Notes. (i) The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depositary, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depositary therefor. A transferor of a beneficial interest in a Global Note shall deliver a written order given in accordance with the Depositary’s procedures containing information regarding the participant account of the Depositary to be credited with a beneficial interest in such Global Note or another Global Note and such account shall be credited in accordance with such order with a beneficial interest in the applicable Global Note and the account of the Person making the transfer shall be debited by an amount equal to the beneficial interest in the Global Note being transferred. Transfers by an owner of a beneficial interest in the Rule 144A Global Note or the IAI Global Note to a transferee who takes delivery of such interest through the Regulation S Global Note, whether before or after the expiration of the Restricted Period, shall be made only upon receipt by the Trustee of a certification in the form provided on the reverse of the Initial Notes from the transferor to the effect that such transfer is being made in accordance with Regulation S or (if available) Rule 144 under the Securities Act and that, if such transfer is being made prior to the expiration of the Restricted Period, the interest transferred shall be held immediately thereafter through Euroclear or Clearstream. In the case of a transfer of a beneficial interest in either the Regulation S Global Note or the Rule 144A Global Note for an interest in the IAI Global Note, the transferee must furnish a signed letter substantially in the form of Exhibit C to the Trustee.

(ii) If the proposed transfer is a transfer of a beneficial interest in one Global Note to a beneficial interest in another Global Note, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note to which such interest is being

 

Appendix-5


transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of Global Note from which such interest is being transferred.

(iii) Notwithstanding any other provisions of this Appendix A (other than the provisions set forth in Section 2.4), a Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

(iv) In the event that a Global Note is exchanged for Definitive Notes pursuant to Section 2.4 prior to the consummation of the Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such Notes, such Notes may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Notes intended to ensure that such transfers comply with Rule 144A, Regulation S or such other applicable exemption from registration under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Issuer.

(d) Restrictions on Transfer of Regulation S Global Note . (i) Prior to the expiration of the Restricted Period, interests in the Regulation S Global Note may only be held through Euroclear or Clearstream. During the Restricted Period, beneficial ownership interests in the Regulation S Global Note may only be sold, pledged or transferred through Euroclear or Clearstream in accordance with the Applicable Procedures and only (1) to the Issuer, (2) so long as such security is eligible for resale pursuant to Rule 144A, to a Person whom the selling holder reasonably believes is a QIB that purchases for its own account or for the account of a QIB to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, (3) in an offshore transaction in accordance with Regulation S, (4) pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if applicable) under the Securities Act or another available exemption, (5) to an IAI purchasing for its own account, or for the account of such an IAI, in a minimum principal amount of Notes of $250,000 or (6) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. Prior to the expiration of the Restricted Period, transfers by an owner of a beneficial interest in the Regulation S Global Note to a transferee who takes delivery of such interest through the Rule 144A Global Note or the IAI Global Note shall be made only in accordance with Applicable Procedures and upon receipt by the Trustee of a written certification from the transferor of the beneficial interest in the form provided on the reverse of the Initial Note to the effect that such transfer is being made to (1) a QIB within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A or (2) an IAI purchasing for its own account, or for the account of such an IAI, in a minimum principal amount of the Notes of $250,000. Such written certification shall no longer be required after the expiration of the Restricted Period. In the case of a transfer of a beneficial interest in the Regulation S Global Note for an interest in the IAI Global Note, the transferee must furnish a signed letter substantially in the form of Exhibit C to the Trustee.

(ii) Upon the expiration of the Restricted Period, beneficial ownership interests in the Regulation S Global Note shall be transferable in accordance with applicable law and the other terms of this Indenture.

(e) Legend .

(i) Except as permitted by the following paragraphs (ii), (iii) or (iv), each Note certificate evidencing the Global Notes and the Definitive Notes (and all Notes issued in exchange therefor

 

Appendix-6


or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only):

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

(1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “QIB”) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER REGULATION D OF THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”) [ WITH RESPECT TO ADDITIONAL NOTES : OR (C) IT PURCHASED PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT],

(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144 (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN A TRANSACTION EXEMPT FROM THE REQUIREMENTS OF THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION, OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND

(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE.

[ IN THE CASE OF REGULATION S NOTES : BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S.]

 

Appendix-7


THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED AT ANY TIME BEGINNING NO LATER THAN 10 DAYS AFTER JANUARY 5, 2011 BY WRITING TO: THE COMPANY AT REALOGY CORPORATION, ONE CAMPUS DRIVE, PARSIPPANY, NJ 07054, ATTENTION: CHIEF FINANCIAL OFFICER.”

Each Definitive Note shall bear the following additional legend:

“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

(ii) Upon any sale or transfer of a Transfer Restricted Note that is a Definitive Note, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Note for a Definitive Note that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Note if the Holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Initial Note).

(iii) After a transfer of any Initial Notes or Additional Notes during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Notes or Additional Notes, as the case may be, all requirements pertaining to the Restricted Notes Legend on such Initial Notes or Additional Notes shall cease to apply and the requirements that any such Initial Notes or Additional Notes be issued in global form shall continue to apply.

(iv) Upon the consummation of an Exchange Offer with respect to the Initial Notes or Additional Notes pursuant to which Holders of such Initial Notes or Additional Notes are offered Exchange Notes in exchange for their Initial Notes or Additional Notes, all requirements pertaining to Initial Notes or Additional Notes that Initial Notes or Additional Notes be issued in global form shall continue to apply, and Exchange Notes in global form without the Restricted Notes Legend shall be available to Holders that exchange such Initial Notes or Additional Notes in such Exchange Offer.

(v) Upon a sale or transfer after the expiration of the Restricted Period of any Initial Note or Additional Note acquired pursuant to Regulation S, all requirements that such Initial Note or Additional Note bear the Restricted Notes Legend shall cease to apply and the requirements requiring any such Initial Note or Additional Note be issued in global form shall continue to apply.

(vi) Any Additional Notes sold in a registered offering shall not be required to bear the Restricted Notes Legend.

(f) Cancelation or Adjustment of Global Note. At such time as all beneficial interests in a Global Note have either been exchanged for Definitive Notes, transferred, redeemed, repurchased or canceled, such Global Note shall be returned by the Depositary to the Trustee for cancelation or retained and canceled by the Trustee. At any time prior to such cancelation, if any beneficial interest in a Global Note is exchanged for Definitive Notes, transferred in exchange for an interest in another Global Note, redeemed, repurchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the

 

Appendix-8


Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Custodian, to reflect such reduction.

(g)  Obligations with Respect to Transfers and Exchanges of Notes.

(i) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate, Definitive Notes and Global Notes at the Registrar’s request.

(ii) No service charge shall be made for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 2.07, 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 of this Indenture).

(iii) Prior to the due presentation for registration of transfer of any Note, the Issuer, the Trustee, the Paying Agent or the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuer, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.

(iv) All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.

(h) No Obligation of the Trustee .

(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depositary or any other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to the registered Holders (which shall be the Depositary or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners.

(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

(i) Automatic Exchange from Global Note Bearing Restricted Notes Legend to Global Note Not Bearing Restricted Notes Legend . Upon the Issuer’s satisfaction that the Restricted

 

Appendix-9


Notes Legend shall no longer be required in order to maintain compliance with the Securities Act, beneficial interests in a Global Note or in a Definitive Note bearing the Restricted Notes Legend (a “ Restricted Note ”) may be automatically exchanged into beneficial interests in a Global Note or Definitive Note, as applicable, not bearing the Restricted Notes Legend (an “ Unrestricted Note ”) without any action required by or on behalf of the Holder (the “ Automatic Exchange ”) at any time on or after the date that is the 366th calendar day after (A) with respect to the Initial Notes, the Issue Date or (B) with respect to Additional Notes, if any, the issue date of such Additional Notes, or, in each case, if such day is not a business day, on the next succeeding business day (the “ Automatic Exchange Date ”). Upon the Issuer’s satisfaction that the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act, the Issuer may, but shall not be obligated to, pursuant to the Applicable Procedures (i) provide written notice to DTC at least fifteen (15) calendar days prior to the Automatic Exchange Date, instructing DTC to exchange all of the outstanding beneficial interests in a particular Restricted Global Note to the Unrestricted Global Note, which the Issuer shall have previously otherwise made eligible for exchange with the DTC, (ii) provide prior written notice (the “ Automatic Exchange Notice ”) to each Holder at such Holder’s address appearing in the register of Holders at least fifteen (15) calendar days prior to the Automatic Exchange Date (the “ Automatic Exchange Notice Date ”), which notice must include (w) the Automatic Exchange Date, (x) the section of this Indenture pursuant to which the Automatic Exchange shall occur, (y) the CUSIP number of the Restricted Global Note from which such Holder’s beneficial interests will be transferred and (z) the CUSIP number of the Unrestricted Global Note into which such Holder’s beneficial interests will be transferred, and (iii) on or prior to the Automatic Exchange Date, deliver to the Trustee for authentication one or more Unrestricted Global Notes, duly executed by the Issuer, in an aggregate principal amount equal to the aggregate principal amount of Restricted Global Notes to be exchanged. Upon receipt by the Trustee of an Officer’s Certificate of the Issuer setting forth the information to be stated in such Automatic Exchange Notice, which Officer’s Certificate must be received by the Trustee, on no less than five (5) calendar days prior to the Automatic Exchange Notice Date, the Trustee shall deliver, in the Issuer’s name and at the Issuer’s expense, the Automatic Exchange Notice to each Holder at such Holder’s address appearing in the register of Holders. Notwithstanding anything to the contrary in this Section 2.3(i), during the fifteen (15) day period prior to the Automatic Exchange Date, no transfers or exchanges other than pursuant to this Section 2.3(i) shall be permitted without the prior written consent of the Issuer. As a condition to any Automatic Exchange, the Issuer shall provide, and the Trustee shall be entitled to rely upon, an Officer’s Certificate and Opinion of Counsel in form reasonably acceptable to the Trustee , each to the effect that the Automatic Exchange shall be effected in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act and that the aggregate principal amount of the particular Restricted Global Note is to be transferred to the particular Unrestricted Global Note by adjustment made on the records of the Trustee, as custodian for the Depositary to reflect the Automatic Exchange. Upon such exchange of beneficial interests pursuant to this Section 2.3(i), the aggregate principal amount of the Global Notes shall be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, to reflect the relevant increase or decrease in the principal amount of such Global Note resulting from the applicable exchange. The Issuer shall also provide written notice to the Holder of Restricted Notes that are Definitive Notes at least (15) calendar days prior to the Automatic Exchange Date offering to exchange all of such Definitive Notes for Unrestricted Notes which shall include information similar to the notice provided to Holders of Global Notes under clause (ii) above and upon request of such Holder of Definitive Notes shall follow the procedures set forth above for exchanging such Definitive Notes for Definitive Notes that are not Restricted Notes. The Restricted Notes from which beneficial interests are transferred pursuant to an Automatic Exchange shall be canceled following the Automatic Exchange.

 

Appendix-10


Section 2.4 Definitive Notes.

(a) A Global Note deposited with the Depositary or with the Trustee as Custodian pursuant to Section 2.1 or issued in connection with an Exchange Offer shall be transferred to the beneficial owners thereof in the form of Definitive Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 and (i) the Depositary notifies the Issuer that it is unwilling or unable to continue as a Depositary for such Global Note or if at any time the Depositary ceases to be a “clearing agency” registered under the Exchange Act and, in each case, a successor depositary is not appointed by the Issuer within 90 days of such notice or after the Issuer becomes aware of such cessation, or (ii) an Event of Default has occurred and is continuing or (iii) the Issuer, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of certificated Notes under this Indenture; provided that in no event shall the Regulation S Temporary Global Note be exchanged by the Issuer for Definitive Notes prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act.

(b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depositary to the Trustee, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section shall be executed, authenticated and delivered only in denominations of $2,000 and integral multiples of $1,000 in excess thereof and registered in such names as the Depositary shall direct. Any certificated Initial Note or Additional Note in the form of a Definitive Note delivered in exchange for an interest in the Global Note shall, except as otherwise provided by Section 2.3(e), bear the Restricted Notes Legend.

(c) Subject to the provisions of Section 2.4(b), the registered Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

(d) In the event of the occurrence of any of the events specified in Section 2.4(a)(i), (ii) or (iii), the Issuer will promptly make available to the Trustee a reasonable supply of Definitive Notes in fully registered form without interest coupons.

 

Appendix-11


Exhibit A

[FORM OF FACE OF INITIAL NOTE]

[RULE 144A][REGULATION S][IAI][GLOBAL] NOTE

[Global Notes Legend]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[Restricted Notes Legend]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

(1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “QIB”) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER REGULATION D OF THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”) [ WITH RESPECT TO ADDITIONAL NOTES : OR (C) IT PURCHASED PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT],

(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144 (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN

 


VIOLATION OF THE SECURITIES ACT, IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN A TRANSACTION EXEMPT FROM THE REQUIREMENTS OF THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND

(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE.

[ IN THE CASE OF REGULATION S NOTES : BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S.]

[Temporary Regulation S Global Notes Legend]

THIS SECURITY IS A TEMPORARY GLOBAL SECURITY. PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD BY ANY PERSON OTHER THAN (1) A NON-U.S. PERSON OR (2) A U.S. PERSON THAT PURCHASED SUCH INTEREST IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). BENEFICIAL INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR CERTIFICATED NOTES OTHER THAN A PERMANENT GLOBAL NOTE IN ACCORDANCE WITH THE TERMS OF THE INDENTURE. TERMS IN THIS LEGEND ARE USED AS USED IN REGULATION S UNDER THE SECURITIES ACT.

[Definitive Notes Legend]

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

[OID Legend]

THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED AT ANY TIME BEGINNING NO LATER THAN 10 DAYS AFTER JANUARY 5, 2011 BY WRITING TO: THE COMPANY AT REALOGY CORPORATION, ONE CAMPUS DRIVE, PARSIPPANY, NJ 07054, ATTENTION: CHIEF FINANCIAL OFFICER.

 

A-2


CUSIP [                    ]

ISIN [                    ]

[RULE 144A][REGULATION S][IAI][GLOBAL] NOTE

13.375% Senior Subordinated Notes due 2018

January 5, 2011

 

No.[              ]

      Principal Amount [$                      ][, as revised by the Schedule of Exchanges of Interests in Global Security attached hereto] 1

REALOGY CORPORATION

promises to pay to [CEDE & CO.] 1 [Name of IAI] 2 or registered assigns, [the principal sum of [            ]] United States Dollars [, revised by the Schedule of Exchanges of Interests in Global Security attached hereto,] 1 [[                    ] United States Dollars] 2 on April 15, 2018.

Interest Payment Dates: April 15 and October 15

Record Dates: April 1 and October 1

 

 

1

Insert in Global Notes

2

Insert in Definitive Notes

 

A-3


IN WITNESS HEREOF, the Issuer has caused this instrument to be duly executed as of the date first set forth above.

 

REALOGY CORPORATION
By:    
  Name:
  Title:

 

A-4


This is one of the Notes referred to in the within-mentioned Indenture:

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:    
  Authorized Signatory

Dated:

 

A-5


[FORM OF BACK OF INITIAL NOTE]

13.375% Senior Subordinated Notes due 2018

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. Realogy Corporation, a Delaware corporation, promises to pay interest on the principal amount of this Note at 12.375% per annum from October 15, 2010 to, but not including the Issue Date, and 13.375% per annum from the Issue Date until maturity and shall pay the Additional Interest, if any, payable pursuant to the Registration Rights Agreement referred to below. The Issuer will pay interest and Additional Interest, if any, semi-annually in arrears on April 15 and October 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “ Interest Payment Date ”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from October 15, 2010; provided that the first Interest Payment Date shall be April 15, 2011. The Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the interest rate on the Notes; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest, and Additional Interest, if any, (without regard to any applicable grace periods) from time to time on demand at the interest rate on the Notes. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

2. METHOD OF PAYMENT. The Issuer will pay interest on the Notes and Additional Interest, if any, to the Persons who are registered Holders of Notes at the close of business on April 1 or October 1 (whether or not a Business Day), as the case may be, next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Principal of, premium, if any, and interest and Additional Interest, if any, on the Notes will be payable at the office or agency of the Issuer maintained for such purpose or, at the option of the Issuer, payment of interest and Additional Interest, if any, may be made by check mailed to the Holders at their respective addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Additional Interest, if any, on all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Issuer or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York Mellon Trust Company, N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuer may change any Paying Agent or Registrar without notice to the Holders. The Issuer or any of its Wholly Owned Subsidiaries may act in any such capacity.

4. INDENTURE. The Issuer issued the Notes under an Indenture, dated as of January 5, 2011 (the “ Indenture ”), among Realogy Corporation, Domus Holdings Corp., the Note Guarantors named therein and the Trustee. This Note is one of a duly authorized issue of notes of the Issuer designated as its 13.375% Senior Subordinated Notes due 2018. The Issuer shall be entitled to issue Additional Notes pursuant to Section 2.01 and 4.09 of the Indenture. The Notes (including any Exchange Notes issued in exchange therefor) and Additional Notes shall be treated as a single class of securities for all purposes under the Indenture. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “ TIA ”). The Notes are subject to all such terms, and Holders are referred to the Indenture

 

A-6


and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION.

(a) Except as described under clauses (b) and (c) below, the Notes will not be redeemable at the Issuer’s option before April 15, 2013.

(b) At any time and from time to time prior to April 15, 2013, the Issuer may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice mailed by first class mail to the registered address of each Holder (or electronically transmitted) or otherwise in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to the date of redemption, subject to the rights of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(c) At any time and from time to time on or prior to April 15, 2013, the Issuer may redeem in the aggregate up to 100% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent of the Issuer, in each case to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer from it, at a redemption price (expressed as a percentage of the principal amount thereof) of 113.375%, plus accrued and unpaid interest and Additional Interest, if any, to the date of redemption (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided, however, that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed (or electronically transmitted) to each Holder of Notes being redeemed and otherwise in accordance with the procedures set forth in the Indenture.

(d) Notice of any redemption upon any Equity Offering may be given prior to the completion of such Equity Offering, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

(e) On and after April 15, 2013, the Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, upon notice pursuant to Section 3.03 of the Indenture at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon and Additional Interest, if any, to the applicable date of redemption, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on April 15 of each of the years indicated below:

 

Year

   Redemption
Price
 

2013

     106.688

2014

     104.458

2015 and thereafter

     100.000

(f) Any redemption pursuant to this paragraph 5 shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.

 

A-7


6. MANDATORY REDEMPTION. The Issuer shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

7. NOTICE OF REDEMPTION. Subject to Section 3.09 of the Indenture, notice of redemption will be mailed by first class mail, postage prepaid (or electronically transmitted), at least 30 days but not more than 60 days before the redemption date (except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 15 of the Indenture) to each Holder whose Notes are to be redeemed at its registered address or otherwise in accordance with the procedures of DTC. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 in excess of $2,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date, interest ceases to accrue on Notes or portions thereof called for redemption.

8. OFFERS TO REPURCHASE.

(a) Upon the occurrence of a Change of Control, each Holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Issuer to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase (subject to the right of the Holders of record on the relevant Record Date to receive interest due of the relevant Interest Payment Date), as provided in, and subject to the terms of, the Indenture. The Change of Control Offer shall be made in accordance with Section 4.14 of the Indenture.

(b) If the Issuer or any of its Restricted Subsidiaries consummates an Asset Sale, within 10 Business Days after the date that Excess Proceeds exceed $30.0 million, the Issuer shall commence an offer to all Holders of the Notes (and at the option of the Issuer to the holders of any Senior Subordinated Pari Passu Indebtedness) (an “ Asset Sale Offer ”), to purchase the maximum principal amount of Notes (and such Senior Subordinated Pari Passu Indebtedness) that is a minimum of $2,000 or an integral multiple of $1,000 that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Senior Subordinated Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest and Additional Interest, if any (or, in respect of such Senior Subordinated Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes (and such Senior Subordinated Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes or any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes (and such Senior Subordinated Pari Passu Indebtedness) surrendered by such holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes (and such Senior Subordinated Pari Passu Indebtedness) to be purchased on a pro rata basis, by lot or by such other method as Trustee shall deem fair and appropriate (and in a manner as complies with applicable legal requirements); provided that no Notes of $2,000 or less shall be purchased in part, except that if all of the Notes of a Holder are to be purchased, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1,000 in excess thereof, shall be purchased. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Issuer prior to any related Purchase Date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” attached to the Notes.

 

A-8


9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents, and Holders shall be required to pay any taxes and fees required by law or permitted by the Indenture. The Issuer need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuer need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed.

10. SUBORDINATION.

(a) The Notes and the Note Guarantees are subordinated to Senior Indebtedness of the Issuer and the Note Guarantors on the terms and subject to the conditions set forth in the Indenture. To the extent provided in the Indenture, Senior Indebtedness must be paid before the Notes and Note Guarantees may be paid.

(b) The Holdings Guarantee is subordinated to Holdings Senior Indebtedness of Holdings on the terms and subject to the conditions set forth in the Indenture. To the extent provided in the Indenture, Holdings Senior Indebtedness must be paid before the Holdings Guarantee may be paid.

(c) The Issuer agrees, and each Holder by accepting a Note agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give effect thereto and appoints the Trustee as attorney-in-fact for such purpose.

11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.

12. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees or the Notes may be amended or supplemented as provided in the Indenture.

13. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes by notice to the Issuer may declare the principal of, premium, if any, interest, Additional Interest, if any, and any other monetary obligations on all the then outstanding Notes to be due and payable immediately; provided, however, that so long as any Bank Indebtedness remains outstanding, no such acceleration shall be effective until the earlier of: (i) five Business Days after the giving of written notice to the Issuer and the Representative under the Credit Agreement; and (ii) the day on which any Bank Indebtedness is accelerated. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture, the Notes or the Guarantees except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default (except a Default relating to the payment of principal, premium, if any, Additional Interest, if any, or interest) if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture except a continuing Default in payment of the principal of, premium, if any, Additional Interest, if any, or interest on, any of the Notes held by a non-consenting Holder (including in connection with an Asset Sale Offer or a Change of Control Offer). The Issuer, Holdings and each Note

 

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Guarantor (to the extent that Holdings or such Note Guarantor is so required under the TIA) are required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required to deliver to the Trustee, within thirty (30) days after the occurrence of a Default, written notice in the form of an Officer’s Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

14. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.

15. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED NOTES. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Transfer Restricted Notes shall have all rights set forth in the Registration Rights Agreement, dated as of January 5, 2011, among Realogy Corporation, Domus Holdings Corp., the Note Guarantors named therein and the other parties named on the signature pages thereof (the “ Registration Rights Agreement ”), including the right to receive Additional Interest (as defined in the Registration Rights Agreement).

16. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE GUARANTEES.

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

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to the Issuer at the following address:

c/o Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

 

A-10


ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:                                                                                                                                                

                                                                              (Insert assignee’s legal name)

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                                                                                                                                  to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.

Date:                                 

 

Your Signature:    
  (Sign exactly as your name appears on the face of this Note)

 

Signature Guarantee*:    

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-11


CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF TRANSFER RESTRICTED NOTES

This certificate relates to $              principal amount of Notes held in (check applicable space)              book-entry or              definitive form by the undersigned.

The undersigned (check one box below):

 

¨ has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Note held by the Depositary a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above) in accordance with the Indenture; or

 

¨ has requested the Trustee by written order to exchange or register the transfer of a Note or Notes.

In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144 under the Securities Act, the undersigned confirms that such Notes are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

 

(1)    ¨    to the Issuer; or
(2)    ¨    to the Registrar for registration in the name of the Holder, without transfer; or
(3)    ¨    pursuant to an effective registration statement under the Securities Act of 1933; or
(4)    ¨    inside the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or
(5)    ¨    outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or
(6)    ¨    to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements; or
(7)    ¨    pursuant to another available exemption from registration under the Securities Act of 1933.

 

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Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided , however , that if box (5), (6) or (7) is checked, the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuer has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.

 

   
Your Signature

 

Signature Guarantee:          
Date:                                     
Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee       Signature of Signature Guarantee

TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

Dated:                                         
    NOTICE: To be executed by an executive officer

 

A-13


OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:

¨ Section 4.10              ¨ Section 4.14

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased:

$                     

 

Date:                              Your Signature:     
        (Sign exactly as your name appears on the face of this Note)
    Tax Identification No.:    
Signature Guarantee*:         

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-14


SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $              . The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

 

Date of Exchange

   Amount of decrease
in Principal Amount of this
Global Note
     Amount of increase
in Principal
Amount of this
Global Note
     Principal Amount of
this Global Note
following such
decrease or increase
     Signature of
authorized officer
of Trustee or
Custodian
 
           
           
           
           
           
           
           

 

* This schedule should be included only if the Note is issued in global form.

 

A-15


Exhibit B

[FORM OF FACE OF EXCHANGE NOTE]

[Global Notes Legend]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[Definitive Notes Legend]

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

[OID Legend]

THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED AT ANY TIME BEGINNING NO LATER THAN 10 DAYS AFTER JANUARY 5, 2011 BY WRITING TO: THE COMPANY AT REALOGY CORPORATION, ONE CAMPUS DRIVE, PARSIPPANY, NJ 07054, ATTENTION: CHIEF FINANCIAL OFFICER.

 


CUSIP: [                ]

ISIN: [                ]

[GLOBAL] NOTE

13.375% Senior Subordinated Notes due 2018

[                  ]

 

No.            

Principal Amount [$                              ][, as

revised by the Schedule of Exchanges of

Interests in Global Security attached hereto] 1

REALOGY CORPORATION

promises to pay to [CEDE & CO.] 1 or registered assigns, the principal sum of                              United States Dollars [, revised by the Schedule of Exchanges of Interests in Global Security attached hereto,] 1 on April 15, 2018.

Interest Payment Dates: April 15 and October 15

Record Dates: April 1 and October 1

 

1

Insert in Global Notes

 

B-2


IN WITNESS HEREOF, the Issuer has caused this instrument to be duly executed as of the date first set forth above.

 

REALOGY CORPORATION
By:    
  Name:
  Title:

 

B-3


This is one of the Notes referred to in the within-mentioned Indenture:

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:    
  Authorized Signatory

Dated:

 

B-4


[FORM OF BACK OF EXCHANGE NOTE]

13.375% Senior Subordinated Notes due 2018

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. Realogy Corporation, a Delaware corporation, promises to pay interest on the principal amount of this Note at 12.375% per annum from October 15, 2010 to, but not including the Issue Date, and 13.375% per annum from the Issue Date until maturity. The Issuer will pay interest, semi-annually in arrears on April 15 and October 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “ Interest Payment Date ”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from October 15, 2010; provided that the first Interest Payment Date shall be April 15, 2011. The Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the interest rate on the Notes; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the interest rate on the Notes. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

2. METHOD OF PAYMENT. The Issuer will pay interest on the Notes to the Persons who are registered Holders of Notes at the close of business on April 1 or October 1 (whether or not a Business Day), as the case may be, next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Principal of, premium, if any, and interest on the Notes will be payable at the office or agency of the Issuer maintained for such purpose or, at the option of the Issuer, payment of interest may be made by check mailed to the Holders at their respective addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium, on all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Issuer or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York Mellon Trust Company, N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuer may change any Paying Agent or Registrar without notice to the Holders. The Issuer or any of its Wholly Owned Subsidiaries may act in any such capacity.

4. INDENTURE. The Issuer issued the Notes under an Indenture, dated as of January 5, 2011 (the “ Indenture ”), among Realogy Corporation, Domus Holdings Corp., the Note Guarantors named therein and the Trustee. This Note is one of a duly authorized issue of notes of the Issuer designated as its 13.375% Senior Subordinated Notes due 2018. The Issuer shall be entitled to issue Additional Notes pursuant to Section 2.01 and 4.09 of the Indenture. The Notes (including any Exchange Notes issued in exchange therefor) and Additional Notes shall be treated as a single class of securities for all purposes under the Indenture. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “ TIA ”). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

 

B-5


5. OPTIONAL REDEMPTION.

(a) Except as described under clauses (b) and (c) below, the Notes will not be redeemable at the Issuer’s option before April 15, 2013.

(b) At any time and from time to time prior to April 15, 2013, the Issuer may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice mailed by first class mail to the registered address of each Holder (or electronically transmitted) or otherwise in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest to the date of redemption, subject to the rights of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(c) At any time and from time to time on or prior to April 15, 2013, the Issuer may redeem in the aggregate up to 100% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent of the Issuer, in each case to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer from it, at a redemption price (expressed as a percentage of the principal amount thereof) of 113.375%, plus accrued and unpaid interest and Additional Interest, if any, to the date of redemption (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided, however, that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed (or electronically transmitted) to each Holder of Notes being redeemed and otherwise in accordance with the procedures set forth in the Indenture.

(d) Notice of any redemption upon any Equity Offering may be given prior to the completion of such Equity Offering, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

(e) On and after April 15, 2013, the Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, upon notice pursuant to Section 3.03 of the Indenture at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon to the applicable date of redemption, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on April 15 of each of the years indicated below:

 

Year

   Redemption
Price
 

2013

     106.688

2014

     104.458

2015 and thereafter

     100.000

(f) Any redemption pursuant to this paragraph 5 shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.

6. MANDATORY REDEMPTION. The Issuer shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

 

B-6


7. NOTICE OF REDEMPTION. Subject to Section 3.09 of the Indenture, notice of redemption will be mailed by first class mail, postage prepaid (or electronically transmitted), at least 30 days but not more than 60 days before the redemption date (except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 15 of the Indenture) to each Holder whose Notes are to be redeemed at its registered address or otherwise in accordance with the procedures of DTC. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 in excess of $2,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date, interest ceases to accrue on Notes or portions thereof called for redemption.

8. OFFERS TO REPURCHASE.

(a) Upon the occurrence of a Change of Control, each Holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Issuer to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase (subject to the right of the Holders of record on the relevant Record Date to receive interest due of the relevant Interest Payment Date), as provided in, and subject to the terms of, the Indenture. The Change of Control Offer shall be made in accordance with Section 4.14 of the Indenture.

(b) If the Issuer or any of its Restricted Subsidiaries consummates an Asset Sale, within 10 Business Days after the date that Excess Proceeds exceed $30.0 million, the Issuer shall commence an offer to all Holders of the Notes (and at the option of the Issuer to the holders of any Senior Subordinated Pari Passu Indebtedness) (an “ Asset Sale Offer ”), to purchase the maximum principal amount of Notes (and such Senior Subordinated Pari Passu Indebtedness) that is a minimum of $2,000 or an integral multiple of $1,000 that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Senior Subordinated Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest (or, in respect of such Senior Subordinated Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes (and such Senior Subordinated Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes or any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes (and such Senior Subordinated Pari Passu Indebtedness) surrendered by such holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes (and such Senior Subordinated Pari Passu Indebtedness) to be purchased on a pro rata basis, by lot or by such other method as Trustee shall deem fair and appropriate (and in a manner as complies with applicable legal requirements); provided that no Notes of $2,000 or less shall be purchased in part, except that if all of the Notes of a Holder are to be purchased, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1,000 in excess thereof, shall be purchased. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Issuer prior to any related Purchase Date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” attached to the Notes.

9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents, and Holders shall be required to pay any taxes and fees required by law or

 

B-7


permitted by the Indenture. The Issuer need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuer need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed.

10. SUBORDINATION.

(a) The Notes and the Note Guarantees are subordinated to Senior Indebtedness of the Issuer and the Note Guarantors on the terms and subject to the conditions set forth in the Indenture. To the extent provided in the Indenture, Senior Indebtedness must be paid before the Notes and Note Guarantees may be paid.

(b) The Holdings Guarantees is subordinated to Holdings Senior Indebtedness of Holdings on the terms and subject to the conditions set forth in the Indenture. To the extent provided in the Indenture, Holdings Senior Indebtedness must be paid before the Holdings Guarantee may be paid.

(c) The Issuer agrees, and each Holder by accepting a Note agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give effect thereto and appoints the Trustee as attorney-in-fact for such purpose.

11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.

12. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees or the Notes may be amended or supplemented as provided in the Indenture.

13. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes by notice to the Issuer may declare the principal of, premium, if any, interest, Additional Interest, if any, and any other monetary obligations on all the then outstanding Notes to be due and payable immediately; provided, however, that so long as any Bank Indebtedness remains outstanding, no such acceleration shall be effective until the earlier of: (i) five Business Days after the giving of written notice to the Issuer and the Representative under the Credit Agreement; and (ii) the day on which any Bank Indebtedness is accelerated. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture, the Notes or the Guarantees except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default (except a Default relating to the payment of principal, premium, if any, or interest) if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture except a continuing Default in payment of the principal of, premium, if any, or interest on, any of the Notes held by a non-consenting Holder (including in connection with an Asset Sale Offer or a Change of Control Offer). The Issuer, Holdings and each Note Guarantor (to the extent that Holdings or such Note Guarantor is so required under the TIA) are required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required to deliver to the Trustee, within thirty (30) days after the occurrence of a Default, written notice in the form of an Officer’s Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

 

B-8


14. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.

15. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE GUARANTEES.

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

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to the Issuer at the following address:

c/o Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

 

B-9


ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to: _______________________________________________________________________

(Insert assignee’s legal name)

_________________________________________________________________________________________________________

(Insert assignee’s soc. sec. or tax I.D. no.)

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

(Print or type assignee’s name, address and zip code)

and irrevocably appoint _______________________________________________________________________________________ to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.

Date: _______________________

Your Signature:    
  (Sign exactly as your name appears on the face of this Note)

Signature Guarantee*: _______________________________

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

B-10


OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:

¨   Section 4.10              ¨   Section 4.14

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased:

$                     

Date:         Your Signature:    
        (Sign exactly as your name appears
on the face of this Note)
      Tax Identification No.: ________________________

Signature Guarantee*: _____________________________________

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

B-11


SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $                      . The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

 

Date of Exchange

   Amount of
decrease
in Principal
Amount of this
Global Note
   Amount of
increase
in Principal
Amount of this
Global Note
   Principal
Amount of
this Global  Note
following such
decrease or
increase
   Signature of
authorized officer
of Trustee or
Custodian

 

 

* This schedule should be included only if the Note is issued in global form.

 

B-12


Exhibit C

FORM OF

TRANSFEREE LETTER OF REPRESENTATION

Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

In care of

The Bank of New York Mellon Trust Company, N.A.

525 William Penn Place, 38 th Floor

Pittsburgh, Pennsylvania 15259

Fax No.: (412) 234-7535

Attention: Corporate Trust Administration

Ladies and Gentlemen:

This certificate is delivered to request a transfer of [                 ] principal amount of the 13.375% Senior Subordinated Notes due 2018 (the “ Notes ”) of Realogy Corporation (the “ Issuer ”).

Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows:

Name: ____________________________

Address: __________________________

Taxpayer ID Number: _______________

The undersigned represents and warrants to you that:

1. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “ Securities Act ”)), purchasing for our own account or for the account of such an institutional “accredited investor” at least $250,000 principal amount of the Securities, and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we invest in or purchase securities similar to the Notes in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment.

2. We understand that the Notes have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Notes to offer, sell or otherwise transfer such Notes prior to the date that is one year after the later of the date of original issue and the last date on which the Issuer or any affiliate of the Issuer was the owner of such Notes (or any predecessor


thereto) (the “ Resale Restriction Termination Date ”) only (a) to the Issuer, (b) pursuant to a registration statement that has been declared effective under the Securities Act, (c) in a transaction complying with the requirements of Rule 144A under the Securities Act (“ Rule 144A ”), to a person or entity we reasonably believe is a qualified institutional buyer under Rule 144A (a “ QIB ”) that is purchasing for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act, (e) to an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing for its own account or for the account of such an institutional “accredited investor,” in each case in a minimum principal amount of Notes of $250,000, or (f) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Notes is proposed to be made pursuant to clause (e) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuer and the Trustee, which shall provide, among other things, that the transferee is an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Notes for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Issuer and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Notes pursuant to clause (d), (e) or (f) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Issuer and the Trustee.

 

TRANSFEREE: _____________________,

by: _______________________________

 

C-2


Exhibit D

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY FUTURE NOTE GUARANTORS

Supplemental Indenture (this “ Supplemental Indenture ”), dated as of                      , among                          (the “ Guaranteeing Subsidiary ”), a subsidiary of Realogy Corporation, a Delaware corporation (the “ Issuer ”), and The Bank of New York Mellon Trust Company, N.A., as trustee (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, each of the Issuer, Holdings and the Note Guarantors (as defined in the Indenture referred to below) has heretofore executed and delivered to the Trustee an indenture (the “ Indenture ”), dated as of January 5, 2011, providing for the issuance of an unlimited aggregate principal amount of 13.375% Senior Subordinated Notes due 2018 (the “ Notes ”);

WHEREAS, the Section 4.15 of the Indenture provides that under certain circumstances the Issuer is required to cause the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Issuer, the Trustee and the Guaranteeing Subsidiary are authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee . The Guaranteeing Subsidiary hereby agrees as follows:

(a) Along with Holdings and all Note Guarantors named in the Indenture or any supplemental indenture, to jointly and severally unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that:

(i) the principal of, premium, if any or interest or Additional Interest, if any, on the Notes will be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder whether for payment of principal of, premium, if any, or interest on the Notes and all other monetary obligations of the Issuer under the Indenture and the Notes will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

(ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so


guaranteed or any performance so guaranteed for whatever reason, Holdings, the Note Guarantors and the Guaranteeing Subsidiary shall be jointly and severally obligated to pay the same immediately. This is a guarantee of payment and not a guarantee of collection.

(b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, the Indenture, the Holdings Guarantee or any other Note Guarantee, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, Holdings or any Note Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor.

(c) The following is hereby waived: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of either of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever.

(d) This Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, the Indenture and this Supplemental Indenture, and the Guaranteeing Subsidiary accepts all obligations of a Note Guarantor under the Indenture.

(e) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, Holdings, the Note Guarantors (including the Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer, Holdings or the Note Guarantors, any amount paid either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(f) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(g) As between the Guaranteeing Subsidiary, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guaranteeing Subsidiary for the purpose of this Note Guarantee.

(h) The Guaranteeing Subsidiary shall have the right to seek contribution from Holdings or any non-paying Note Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Note Guarantee.

(i) Pursuant to Section 11.02 of the Indenture, after giving effect to all other contingent and fixed liabilities that are relevant under any applicable Bankruptcy Law or fraudulent conveyance laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of Holdings or any other Note Guarantor in respect of the obligations of Holdings or such other Note Guarantor under Article 11 or Article 12 of the Indenture, this new Note Guarantee shall be limited to the maximum amount permissible such that the obligations of such Guaranteeing Subsidiary under this Note Guarantee will not

 

D-2


being voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

(j) This Note Guarantee shall be a continuing guarantee and shall (1) remain in full force and effect until payment in full of all the applicable obligations guaranteed hereby; (2) subject to Section 10.06 of the Indenture, be binding upon the Guaranteeing Subsidiary and its successors; and (3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

(k) This Note Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer, Holdings or any Note Guarantor for liquidation or reorganization, should the Issuer, Holdings or any Note Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s, Holdings’ or any Note Guarantor’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, the Holdings Guarantee or Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(l) In case any provision of this Note Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(m) This Note Guarantee shall be a general unsecured senior subordinated obligation of such Guaranteeing Subsidiary, and shall be subordinated in right of payment to all existing and future Senior Indebtedness of the Guaranteeing Subsidiary, if any.

(n) Each payment to be made by the Guaranteeing Subsidiary in respect of this Note Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

(3) Execution and Delivery . The Guaranteeing Subsidiary agrees that the Note Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Note Guarantee on the Notes.

(4) Merger, Consolidation or Sale of All or Substantially All Assets .

(a) Except as otherwise provided in Section 5.01(b) of the Indenture, the Guaranteeing Subsidiary may not, and the Issuer will not permit the Guaranteeing Subsidiary to, consolidate, amalgamate or merge with or into or wind up into (whether or not the Guaranteeing Subsidiary is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(i) either (a) such Guaranteeing Subsidiary is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Guaranteeing Subsidiary) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Guaranteeing

 

D-3


Subsidiary or such Person, as the case may be, being herein called the “ Successor Note Guarantor ”) and the Successor Note Guarantor (if other than the Guaranteeing Subsidiary) expressly assumes all the obligations of the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s applicable Note Guarantee pursuant to a supplemental indenture or other documents or instruments in form reasonably satisfactory to the Trustee, or (b) such sale or disposition or consolidation, amalgamation or merger is not in violation of Section 4.10 of the Indenture;

(ii) the Successor Note Guarantor (if other than the Guaranteeing Subsidiary) shall have delivered or caused to be delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with the Indenture; and

(iii) immediately after such transaction, no Default or Event of Default exists.

(b) Except as otherwise provided in the Indenture, the Successor Note Guarantor (if other than the Guaranteeing Subsidiary) will succeed to, and be substituted for, the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s applicable Note Guarantee, and the Guaranteeing Subsidiary will automatically be released and discharged from its obligations under the Indenture and the Guaranteeing Subsidiary’s applicable Note Guarantee, but in the case of a lease of all or substantially all of its assets, the Guaranteeing Subsidiary will not be released from its obligations under the Note Guarantee. Notwithstanding the foregoing, (1) a Guaranteeing Subsidiary may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating the Guaranteeing Subsidiary in another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness, Preferred Stock and Disqualified Stock of the Guaranteeing Subsidiary is not increased thereby and (2) a Guaranteeing Subsidiary may merge, amalgamate or consolidate with another Guaranteeing Subsidiary or the Issuer.

(c) In addition, notwithstanding the foregoing, the Guaranteeing Subsidiary may consolidate, amalgamate or merge with or into or wind up into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a “ Transfer ”) to (x) the Issuer or any Note Guarantor or (y) any Restricted Subsidiary that is not a Note Guarantor; provided that at the time of each such Transfer pursuant to clause (y) the aggregate amount of all such Transfers since the Original Issue Date shall not exceed the greater of $625.0 million and 5.0% of Total Assets after giving effect to each such Transfer and including all Transfers of the Guaranteeing Subsidiary and the Note Guarantors occurring from and after the Original Issue Date (excluding Transfers in connection with the Merger Transactions).

(5) Releases .

The Note Guarantee of the Guaranteeing Subsidiary shall be automatically and unconditionally released and discharged, and no further action by the Guaranteeing Subsidiary, the Issuer or the Trustee is required for the release of the Guaranteeing Subsidiary’s Guarantee, upon:

(1) (a) the sale, disposition or other transfer (including through merger or consolidation) of the Capital Stock (including any sale, disposition or other transfer following which the Guaranteeing Subsidiary is no longer a Restricted Subsidiary), of the Guaranteeing Subsidiary if such sale, disposition or other transfer is made in compliance with the applicable provisions of the Indenture;

(b) the Issuer designating the Guaranteeing Subsidiary to be an Unrestricted Subsidiary in accordance with the provisions set forth under Section 4.07 of the Indenture and the definition of “Unrestricted Subsidiary”;

 

D-4


(c) the release or discharge of such Restricted Subsidiary from (x) its guarantee of Indebtedness under the Credit Agreement (including by reason of the termination of the Credit Agreement) and/or (y) the guarantee of Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer or such Restricted Subsidiary or the repayment of the Indebtedness or Disqualified Stock (except in each case a discharge or release by or as a result of payment under such guarantee) that resulted in the obligation to guarantee the Notes, in the case of each of clauses (x) and (y) if the Guaranteeing Subsidiary would not then otherwise be required to guarantee the Notes pursuant to the Indenture; provided , that if such Person has incurred any Indebtedness or issued any Disqualified Stock in reliance on its status as a Note Guarantor under Section 4.09 of the Indenture, the Guaranteeing Subsidiary’s obligations under such Indebtedness or Disqualified Stock, as the case may be, so Incurred are satisfied in full and discharged or are otherwise permitted to be Incurred under Section 4.09 of the Indenture; or

(d) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 of the Indenture or the Issuer’s obligations under the Indenture being discharged in accordance with the terms of the Indenture; and

(2) in the case of clause (1)(a) above, the release of the Guaranteeing Subsidiary from its guarantee, if any, of, and all pledges and security, if any, granted in connection with, the Credit Agreement and any other Indebtedness of the Issuer or any Restricted Subsidiary.

In addition, a Note Guarantee will be automatically released upon the Guaranteeing Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest securing Bank Indebtedness or other exercise of remedies in respect thereof.

(6) No Recourse Against Others . No director, officer, employee, manager, incorporator or holder of any Equity Interests of the Guaranteeing Subsidiary or any direct or indirect parent, as such, shall have any liability for any obligations of the Issuer or the Note Guarantors under the Notes, the Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(7) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(8) Counterparts/Originals . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

(9) Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction hereof.

(10) The Trustee . The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary.

(11) Subrogation . The Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by the Guaranteeing Subsidiary pursuant to the provisions of Section 2 hereof and Section 11.01 of the Indenture; provided that, if an Event of Default has occurred and is continuing, the Guaranteeing Subsidiary shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under the Indenture or the Notes shall have been paid in full.

 

D-5


(12) Benefits Acknowledged . The Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. The Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Note Guarantee are knowingly made in contemplation of such benefits.

(13) Successors . All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in Section 2(k) hereof or elsewhere in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

 

D-6


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

 

[GUARANTEEING SUBSIDIARY]
By:    
  Name:
  Title:
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:    
  Name:
  Title:

 

D-7

Exhibit 4.66

11.50% Senior Notes due 2017

REGISTRATION RIGHTS AGREEMENT

by and among

Realogy Corporation

Domus Holdings Corp.

the subsidiaries of Realogy Corporation parties hereto

and

J.P. Morgan Securities LLC

Credit Suisse Securities (USA) LLC

Goldman, Sachs & Co.

Dated as of January 5, 2011


REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “ Agreement ”) is made and entered into as of January 5, 2011, by and among Realogy Corporation, a Delaware corporation (the “ Company ”), Domus Holdings Corp., a Delaware corporation and the indirect parent of the Company (“ Holdings ”), the subsidiaries of the Company listed on Schedule A hereto (collectively, together with Holdings, the “ Guarantors ”), J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC. and Goldman, Sachs & Co. (each a “ Dealer Manager ” and, collectively, the “ Dealer Managers ”), each of whom has agreed to act as a dealer manager pursuant to the Dealer Manager Agreement (as defined below) with respect to the Company’s offer to exchange (the “ Senior Notes Exchange Offer ”) its 11.50% Senior Notes due 2017 (the “ Initial Notes ”) issued by the Company and fully and unconditionally guaranteed by the Guarantors (the “ Guarantees ”) for certain of its 10.50% Senior Notes due 2014 (the “ Outstanding Securities”) and the Company’s concurrent solicitation of consents to amend the indenture pursuant to which the Outstanding Securities were issued (the “ Solicitations ”). The Initial Notes and the Guarantees thereof are herein collectively referred to as the “ Initial Securities ”.

This Agreement is made pursuant to the Dealer Manager Agreement, dated November 30, 2010 (the “ Dealer Manager Agreement ”), among the Company, the Guarantors and the Dealer Managers for the benefit of the holders from time to time of the Initial Securities. In connection with the Dealer Manager Agreement and the Senior Notes Exchange Offer, the Company and the Guarantors have agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Dealer Managers set forth in Section 6(h) of the Dealer Manager Agreement.

The parties hereby agree as follows:

S ECTION  1. Definitions . As used in this Agreement, the following capitalized terms shall have the following meanings:

Additional Interest: Any additional interest payable with respect to the Transfer Restricted Securities due to an increase in interest rate pursuant to Section 5 hereof.

Advice: As defined in Section 6 hereof.

Agreement: As defined in the preamble hereto.

Broker-Dealer: Any broker or dealer registered under the Exchange Act.

Business Day: Any day other than a Saturday, Sunday or U.S. federal holiday or a day on which banking institutions or trust companies located in New York, New York are authorized or obligated to be closed.

Closing Date: The date of this Agreement.

Commission: The Securities and Exchange Commission.

Company: As defined in the preamble hereto.


Consummate: A registered Exchange Offer shall be deemed “Consummated” for purposes of this Agreement upon the occurrence of (i) the filing and effectiveness under the Securities Act of the Exchange Offer Registration Statement relating to the Exchange Securities to be issued in the Exchange Offer, (ii) the maintenance of such Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the minimum period required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company to the registrar under the Indenture of Exchange Securities in the same aggregate principal amount as the aggregate principal amount of Initial Securities that were tendered by Holders thereof pursuant to the Exchange Offer.

Dealer Manager Agreement: As defined in the preamble hereto.

Dealer Managers: As defined in the preamble hereto.

Delay Period: As defined in Section 6 hereof.

Exchange Act: The Securities Exchange Act of 1934, as amended.

Exchange Offer: The registration by the Company and the Guarantors under the Securities Act of the Exchange Securities pursuant to a Registration Statement pursuant to which the Company offers the Holders of all outstanding Transfer Restricted Securities the opportunity to exchange all such outstanding Transfer Restricted Securities held by such Holders for Exchange Securities in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Securities tendered in such exchange offer by such Holders.

Exchange Offer Registration Statement: The Registration Statement relating to the Exchange Offer, including the related Prospectus.

Exchange Securities: The 11.50% Senior Notes due 2017 of the same series under the Indenture as the Initial Notes and the Guarantees thereof, to be issued to Holders in exchange for Transfer Restricted Securities pursuant to this Agreement.

FINRA: The Financial Industry Regulatory Authority, Inc.

Free Writing Prospectus: Any free writing prospectus, as such term is defined in Rule 405 under the Securities Act, relating to any portion of the Securities.

Guarantees: As defined in the preamble hereto.

Guarantors: As defined in the preamble hereto.

Holders: As defined in Section 2(b) hereof.

Holdings: As defined in the preamble hereto.

Indemnified Holder: As defined in Section 8(a) hereof.

 

3


Indenture: The Indenture dated as of January 5, 2011, by and among the Company, the Guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee (the “ Trustee ”), pursuant to which the Initial Securities and the Exchange Securities are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof.

Initial Notes: As defined in the preamble hereto.

Initial Securities: As defined in the preamble hereto.

Other Notes: the Company’s $129,579,298 aggregate principal amount of 12.00% Senior Notes due 2017 and $10,282,000 aggregate principal amount of 13.375% Senior Subordinated Notes due 2018.

Outstanding Securities: As defined in the preamble hereto.

Person: An individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.

Prospectus: The prospectus included in a Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus.

Registration Default: As defined in Section 5 hereof.

Registration Statement: Any registration statement of the Company and the Guarantors relating to (a) an offering of Exchange Securities pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to a Shelf Registration Statement, which is filed pursuant to the provisions of this Agreement, in each case, including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein.

Securities: The Exchange Securities and/or any Transfer Restricted Securities registered pursuant to a Shelf Registration Statement.

Securities Act: The Securities Act of 1933, as amended.

Senior Notes Exchange Offer : As defined in the preamble hereto.

Shelf Registration Statement: As defined in Section 4(a) hereof.

Solicitations: As defined in the preamble hereto.

10-K Filing Date: As defined in Section 3(a) hereof.

Transfer Restricted Securities: Each Initial Security, until the earliest to occur of (a) the date on which such Initial Security is exchanged in the Exchange Offer for an Exchange Security entitled to be resold to the public by the Holder thereof without complying with the prospectus delivery requirements of the Securities Act, (b) the date on which such Initial Security has been

 

4


effectively registered under the Securities Act and disposed of in accordance with a Shelf Registration Statement and (c) the date on which such securities cease to be outstanding (whether as a result of a repurchase, cancellation or otherwise).

Trust Indenture Act: The Trust Indenture Act of 1939, as amended.

Trustee: As defined in the definition of Indenture above.

Underwritten Registration or Underwritten Offering: A registration in which securities of the Company are sold to an underwriter for reoffering to the public.

S ECTION  2. Securities Subject to this Agreement.

(a) Transfer Restricted Securities. The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities.

(b) Holders of Transfer Restricted Securities. A Person is deemed to be a holder of Transfer Restricted Securities (each, a “ Holder ”) whenever such Person owns Transfer Restricted Securities.

S ECTION  3. Registered Exchange Offer.

(a) Unless the Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) hereof have been complied with), each of the Company and the Guarantors shall (i) file a Registration Statement filed under the Securities Act relating to the Exchange Securities and the Exchange Offer with the Commission on or prior to 15 days after the date that the Company would be obligated to file its Form 10-K for the year ended December 31, 2010 with the Commission if the Company were a non-accelerated filer subject to Sections 13 or 15(d) of the Exchange Act (the “ 10-K Filing Date ”), (ii) cause such Registration Statement to become effective as promptly as possible (unless it becomes effective automatically upon filing), but in no event later than 120 days after the 10-K Filing Date (or if such 120th day is not a Business Day, the next succeeding Business Day) and (iii) in connection with the foregoing, (A) file all pre-effective amendments to such Registration Statement as may be necessary in order to cause such Registration Statement to become effective, (B) file, if applicable, a post-effective amendment to such Registration Statement pursuant to Rule 430B under the Securities Act and (C) cause all necessary filings in connection with the registration and qualification of the Exchange Securities to be made under the state securities or blue sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer, and (iv) upon the effectiveness of such Registration Statement, commence the Exchange Offer. The Exchange Offer shall be on the appropriate form permitting registration of the Exchange Securities to be offered in exchange for the Transfer Restricted Securities and to permit resales of Initial Securities held by Broker-Dealers as contemplated by Section 3(c) hereof.

(b) The Company and the Guarantors shall cause the Exchange Offer Registration Statement to be effective continuously and shall keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however , that in no event shall such period be less

 

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than 30 days after the date notice of the Exchange Offer is mailed to the Holders. The Company shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Exchange Securities and the exchange securities to be issued to holders in exchange for Other Notes, pursuant to registration rights agreements dated the date hereof shall be included in the Exchange Offer Registration Statement. The Company shall cause the Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in no event later than 30 Business Days after the date notice of the Exchange Offer is required to be mailed to the Holders.

(c) The Company shall indicate in a “Plan of Distribution” section contained in the Prospectus forming a part of the Exchange Offer Registration Statement that any Broker-Dealer who holds Initial Securities that are Transfer Restricted Securities and that were acquired for its own account as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Company) may exchange such Initial Securities pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter” within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the Exchange Securities received by such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer Registration Statement. Such “Plan of Distribution” section shall also contain all other information with respect to such resales by Broker-Dealers that the Commission may require in order to permit such resales pursuant thereto, but such “Plan of Distribution” shall not name any such Broker-Dealer or disclose the amount of Initial Securities held by any such Broker-Dealer except to the extent required by the Commission.

Each of the Company and the Guarantors shall keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 6(c) hereof to the extent necessary to ensure that it is available for resales of Initial Securities acquired by Broker-Dealers for their own accounts as a result of market-making activities or other trading activities, and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period ending on the earlier of (i) 180 days from the date on which the Exchange Offer Registration Statement is declared effective and (ii) the date on which a Broker-Dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities.

The Company shall provide sufficient copies of the latest version of such Prospectus to Broker-Dealers promptly upon request at any time during such 180-day (or shorter as provided in the foregoing sentence) period in order to facilitate such resales.

S ECTION  4. Shelf Registration.

(a) Shelf Registration. If (i) the Company and the Guarantors are not required to file the Exchange Offer Registration Statement or to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a) hereof have been complied with), (ii) for any reason the Exchange Offer is not Consummated within 30 Business Days after the date notice of the Exchange Offer is

 

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required to be mailed to the Holders or (iii) with respect to any Holder of Transfer Restricted Securities (A) such Holder is prohibited by applicable law or Commission policy from participating in the Exchange Offer, or (B) such Holder may not resell the Exchange Securities acquired by it in the Exchange Offer to the public without delivering a prospectus (other than by reason of such Holder’s status as an affiliate of the Company) and the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder, or (C) such Holder is a Broker-Dealer and holds Initial Securities acquired directly from the Company or one of its affiliates, then, upon such Holder’s request prior to the 20th day following consummation of the Exchange Offer, the Company and the Guarantors shall:

(x) cause to be filed a shelf registration statement pursuant to Rule 415 under the Securities Act, which may be an amendment to the Exchange Offer Registration Statement (in either event, the “ Shelf Registration Statement ”) as soon as practicable but in any event on or prior to the later of (x) 90 days after such filing obligation arises (or if such 90th day is not a Business Day, the next succeeding Business Day) and (y) 15 days after the 10-K Filing Date (or if such 15th day is not a Business Day, the next succeeding Business Day), which Shelf Registration Statement shall provide for resales of all Transfer Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof (but shall not include any other securities unless approved by a majority of the Holders whose Transfer Restricted Securities are to be covered by such Shelf Registration Statement); and

(y) cause such Shelf Registration Statement to be declared effective by the Commission as promptly as possible (unless it becomes effective automatically upon filing), and in any event on or prior to the later of (x) 120 days after the 10-K Filing Date (or if such 120th day is not a Business Day, the next succeeding Business Day) and (y) 180 days after such obligation to file such Shelf Registration Statement arises (or if such 180th day is not a Business Day, the next succeeding Business Day).

Each of the Company and the Guarantors shall keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for resales of Initial Securities by the Holders of Transfer Restricted Securities entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of at least two years following the effective date of such Shelf Registration Statement (or shorter period that will terminate when all the Initial Securities covered by such Shelf Registration Statement have been sold pursuant to such Shelf Registration Statement). During the period during which the Company and the Guarantors are required to maintain an effective Shelf Registration Statement pursuant to this Agreement, the Company and the Guarantors will, prior to the expiration of that Shelf Registration Statement, file, cause to be declared effective (unless it becomes effective automatically upon filing) within a period that avoids any interruption in the ability of Holders of Securities covered by the expiring Shelf Registration Statement to make registered dispositions, a new registration statement relating to the Securities, which shall be deemed the “Shelf Registration Statement” for purposes of this Agreement.

 

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(b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 20 Business Days after receipt of a request therefor, such information as the Company may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein or amendment or supplement thereto or Free Writing Prospectus. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.

S ECTION  5. Additional Interest . If (i) any of the Registration Statements required by this Agreement has not been filed within 15 days after the 10-K Filing Date, (ii) any of the Registration Statements required by this Agreement has not been declared effective by the Commission (or become automatically effective) within 120 days after the 10-K Filing Date, (iii) the Exchange Offer has not been Consummated within 160 days after the 10-K Filing Date with respect to the Exchange Offer Registration Statement or (iv) any Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded immediately by a post-effective amendment to such Registration Statement that cures such failure and that is itself immediately declared or automatically becomes effective (except in the case of a Registration Statement that ceases to be effective or usable as specifically permitted by the last paragraph of Section 6 hereof) (each such event referred to in clauses (i) through (iv), a “ Registration Default ”), the Company hereby agrees that the interest rate borne by the Transfer Restricted Securities shall be increased by 0.25% per annum during the 90-day period immediately following the occurrence of any Registration Default and shall increase by 0.25% per annum at the end of each subsequent 90-day period, but in no event shall such increase exceed 1.00% per annum. Following the earliest of (x) the cure of all Registration Defaults relating to any particular Transfer Restricted Securities, (y) the date on which such Transfer Restricted Security ceases to be a Transfer Restricted Security and (z) the date that is two years after the Closing Date, the interest rate borne by the relevant Transfer Restricted Securities will be reduced to the original interest rate borne by such Transfer Restricted Securities and the accrual of Additional Interest will cease with respect to such Transfer Restricted Security; provided, however, that if, after any such reduction in interest rate, a different Registration Default occurs, the interest rate borne by the relevant Transfer Restricted Securities shall again be increased pursuant to the foregoing provisions. All accrued Additional Interest will be paid by the Company and the Guarantors on each interest payment date to the Holder in the same manner as interest is paid under the Indenture.

Notwithstanding the foregoing, (i) the amount of Additional Interest payable shall not increase because more than one Registration Default has occurred and is pending and (ii) a Holder of Transfer Restricted Securities that is not entitled to the benefits of the Shelf Registration Statement (because, e.g. , such Holder has not elected to include information or has not timely delivered such information to the Company pursuant to Section 4(b) hereof) shall not be entitled to Additional Interest with respect to a Registration Default that pertains to the Shelf Registration Statement.

 

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All obligations of the Company and the Guarantors set forth in the first paragraph of this Section 5 that are outstanding with respect to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted Security shall survive until such time as all such obligations with respect to such security shall have been satisfied in full.

S ECTION  6. Registration Procedures.

(a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Company and the Guarantors shall comply with all of the provisions of Section 6(c) hereof, shall effect such exchange to permit the sale of Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and shall comply with all of the following provisions:

(i) If in the reasonable opinion of counsel to the Company there is a question as to whether the Exchange Offer is permitted by applicable law, each of the Company and the Guarantors hereby agrees to seek a favorable decision from the Commission allowing the Company and the Guarantors to Consummate an Exchange Offer for such Initial Securities. Each of the Company and the Guarantors hereby agrees to pursue the issuance of such a decision to the Commission staff level but shall not be required to take commercially unreasonable action to effect a change of Commission policy. Each of the Company and the Guarantors hereby agrees, however, to (A) participate in telephonic conferences with the Commission, (B) deliver to the Commission staff an analysis prepared by counsel to the Company setting forth the legal bases, if any, upon which such counsel has concluded that such an Exchange Offer should be permitted and (C) diligently pursue a favorable resolution by the Commission staff of such submission.

(ii) As a condition to its participation in the Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted Securities shall furnish, upon the request of the Company, prior to the Consummation thereof, a written representation to the Company (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an affiliate of the Company, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any Person to participate in, a distribution of the Exchange Securities to be issued in the Exchange Offer and (C) it is acquiring the Exchange Securities in its ordinary course of business. In addition, all such Holders of Transfer Restricted Securities shall otherwise cooperate in the Company’s preparations for the Exchange Offer. Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Exchange Offer to participate in a distribution of the securities to be acquired in the Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (which may include any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and that such a secondary resale transaction should be covered by an effective registration statement containing the selling

 

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security holder information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of Exchange Securities obtained by such Holder in exchange for Initial Securities acquired by such Holder directly from the Company.

(b) Shelf Registration Statement. In connection with the Shelf Registration Statement, each of the Company and the Guarantors shall comply with all the provisions of Section 6(c) hereof and shall effect such registration (unless automatically declared effective) to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and pursuant thereto each of the Company and the Guarantors will as expeditiously as is commercially reasonable prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Securities Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof.

(c) General Provisions. In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities and any Free Writing Prospectus (including, without limitation, any Registration Statement and the related Prospectus required to permit resales of Initial Securities by Broker-Dealers and any Free Writing Prospectus related thereto), each of the Company and the Guarantors shall:

(i) use its commercially reasonable efforts to keep such Registration Statement continuously effective during the period required by this Agreement and provide all requisite financial statements (including, if required by the Securities Act or any regulation thereunder, financial statements of the Guarantors for the period specified in Section 3 or 4 hereof, as applicable); upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Company shall file promptly an appropriate amendment to such Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B) use its commercially reasonable efforts to cause such amendment to be declared effective (unless automatically declared effective) and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter;

(ii) prepare and file with the Commission such amendments and post-effective amendments to the applicable Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, as applicable, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424, 430A and 430B under the Securities Act in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by

 

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the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;

(iii) advise the underwriter(s), if any, and selling Holders promptly and, if requested by such Persons, to confirm such advice in writing, (A) when the Prospectus, any Prospectus supplement, any post-effective amendment or any Free Writing Prospectus has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Securities Act, of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, of the issuance by the Commission of a notification of objection to the use of the form on which the Registration Statement has been filed, or of the happening of any event that causes the Company to become an “ineligible issuer,” as defined in Rule 405 under the Securities Act and (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement or a notification of objection to the use of the form on which the Registration Statement has been filed or if any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or blue sky laws, each of the Company and the Guarantors shall use its commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest practicable time;

(iv) (A) furnish without charge to each of the Dealer Managers, each selling Holder named in any Registration Statement that has requested such copies, if any, and each of the underwriter(s), if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which documents will be subject to the review and comment of such requesting Holders and underwriter(s) in connection with such sale, if any, for a period of at least five Business Days, and the Company will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference) to which a Dealer Manager of Transfer Restricted Securities covered by such Registration Statement or the underwriter(s), if any, shall reasonably object in writing within five Business Days after the receipt thereof (such objection to be deemed timely made upon confirmation of telecopy transmission within such period). The objection of a Dealer Manager or underwriter, if any, shall be deemed to be reasonable if such Registration Statement,

 

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amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission;

(B) furnish without charge to each of the Dealer Managers before filing with the Commission, a copy of any Free Writing Prospectus, which will be subject to the consent of the Dealer Managers, and the Company will not file any such Free Writing Prospectus to which the Dealer Managers of Transfer Restricted Securities covered by such Registration Statement have not consented (such consent not to be unreasonably withheld, conditioned or delayed);

(v) promptly prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to the Dealer Managers, each selling Holder named in any Registration Statement that has requested such documents, if any, and to the underwriter(s), if any, make the Company’s and the Guarantors’ representatives available for discussion of such document and other customary due diligence matters, subject to customary confidentiality agreements, and include such information in such document prior to the filing thereof as such selling Holders or underwriter(s), if any, reasonably may request;

(vi) make available, subject to customary confidentiality agreements, at reasonable times for inspection by the Dealer Managers, the managing underwriter(s), if any, participating in any disposition pursuant to such Registration Statement and any attorney or accountant retained by such Dealer Managers or any of the underwriter(s), all financial and other records, pertinent corporate documents and properties of each of the Company and the Guarantors, and cause the Company’s and the Guarantors’ officers, directors and employees to supply all information, in each case as shall be reasonably necessary to enable any such Holder, underwriter, attorney or accountant to exercise any applicable responsibilities in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness and to participate in meetings with investors to the extent reasonably requested by the managing underwriter(s), if any;

(vii) if requested by any selling Holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the “Plan of Distribution” of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

(viii) cause the Transfer Restricted Securities covered by the Registration Statement to be rated with the appropriate rating agencies, if so requested by the Holders

 

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of a majority in aggregate principal amount of Securities covered thereby or the underwriter(s), if any;

(ix) furnish to each Dealer Manager, each selling Holder and each of the underwriter(s), if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including financial statements and schedules, all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference);

(x) deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; each of the Company and the Guarantors hereby consents to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto;

(xi) enter into such agreements (including an underwriting agreement), and make such representations and warranties, and take all such other commercially reasonable actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Shelf Registration Statement contemplated by this Agreement, all to such extent as may be reasonably requested by any Dealer Manager or by any Holder of Transfer Restricted Securities or underwriter in connection with any sale or resale pursuant to any Shelf Registration Statement contemplated by this Agreement; and whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, each of the Company and the Guarantors shall:

(A) furnish to each Dealer Manager, each selling Holder and each underwriter, if any, in such substance and scope as they may reasonably request and as are customarily made by issuers to underwriters in primary underwritten offerings, upon the date of the effectiveness of the Shelf Registration Statement:

(1) a certificate, dated the date of effectiveness of the Shelf Registration Statement, as the case may be, signed by (y) in the case of the Company, the President or any Vice President and a principal financial or accounting officer and (z) in the case of the Guarantors, the President or any Vice President, in each case, confirming, as of the date thereof, the matters set forth in Section 6(e) of the Dealer Manager Agreement and such other matters as such parties may reasonably request;

(2) if requested by a majority of selling Holders, an opinion, dated the date of effectiveness of the Shelf Registration Statement, as the case may be, of (i) counsel for the Company and the Guarantors, covering the matters set forth in the opinion delivered pursuant to Section 6(c) of the Dealer Manager Agreement and (ii) the General Counsel of the Company and the Guarantors, covering matters set forth in the opinion delivered

 

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pursuant to Section 6(c) of the Dealer Manager Agreement and such other matters customarily covered in opinions requested in similar offerings, and in each case, including a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Company and the Guarantors, representatives of the independent public accountants for the Company and the Guarantors, representatives of the underwriter(s), if any, and counsel to the underwriter(s), if any, in connection with the preparation of such Registration Statement and the related Prospectus and have considered the matters required to be stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing, no facts came to such counsel’s attention that caused such counsel to believe that the applicable Shelf Registration Statement, (A) at the date of the opinion and at the time such Shelf Registration Statement or any post-effective amendment thereto became effective and (B) at the applicable time identified by such Holders or managing underwriters, in the case of (A) and (B) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus contained in such Shelf Registration Statement as of its date contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein not misleading. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial or statistical data included in any Shelf Registration Statement contemplated by this Agreement or the related Prospectus, and such opinions may be further subject to assumptions and qualifications substantially similar to those set forth in the opinions delivered pursuant to Sections 6(c) of the Dealer Manager Agreement; and

(3) a customary comfort letter, dated the date of effectiveness of the Shelf Registration Statement, from the Company’s independent accountants, in the customary form and covering matters of the type customarily requested to be covered in comfort letters by underwriters in connection with primary underwritten offerings, and covering or affirming the matters set forth in the comfort letter delivered pursuant to Section 6(d) of the Dealer Manager Agreement, without exception;

(B) set forth in full or incorporate by reference in the underwriting agreement, if any, the indemnification provisions and procedures of Section 8 hereof with respect to all parties to be indemnified pursuant to said Section; and

(C) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with Section 6(c)(xi)(A) hereof and with any customary conditions contained in the underwriting agreement or

 

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other agreement entered into by the Company or any of the Guarantors pursuant to this Section 6(c)(xi), if any.

If at any time the representations and warranties of the Company and the Guarantors contemplated in Section 6(c)(xi)(A)(1) hereof cease to be true and correct, the Company or the Guarantors shall so advise the Dealer Managers and the underwriter(s), if any, and each selling Holder promptly and, if requested by such Persons, shall confirm such advice in writing;

(xii) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Securities under the state securities or blue sky laws of such jurisdictions as the selling Holders or underwriter(s), if any, may request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the Shelf Registration Statement; provided, however , that none of the Company or the Guarantors shall be required to register or qualify as a foreign corporation where it is not then so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not then so subject;

(xiii) issue, upon the request of any Holder of Initial Securities covered by the Shelf Registration Statement, Exchange Securities having an aggregate principal amount equal to the aggregate principal amount of Initial Securities surrendered to the Company by such Holder in exchange therefor or being sold by such Holder, such Exchange Securities to be registered in the name of such Holder or in the name of the purchaser(s) of such Securities, as the case may be; in return, the Initial Securities held by such Holder shall be surrendered to the Company for cancellation;

(xiv) subject to the terms of the Indenture, cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Securities to be in such denominations and registered in such names as the Holders or the underwriter(s), if any, may request at least two Business Days prior to any sale of Transfer Restricted Securities made by such Holders or underwriter(s);

(xv) use its commercially reasonable efforts to cause the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in Section 6(c)(xii) hereof;

(xvi) if any fact or event contemplated by Section 6(c)(iii)(D) hereof shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file

 

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any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading;

(xvii) provide a CUSIP number for all Securities not later than the effective date of the Registration Statement covering such Securities and provide the Trustee under the applicable Indenture with printed certificates for such Securities which are in a form eligible for deposit with The Depository Trust Company and take all other action necessary to ensure that all such Securities are eligible for deposit with The Depository Trust Company;

(xviii) cooperate and assist in any filings required to be made with FINRA and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter”) that is required to be retained in accordance with the rules and regulations of FINRA;

(xix) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders, as soon as practicable, a consolidated earning statement meeting the requirements of Rule 158 (which need not be audited) for the twelve-month period (A) commencing at the end of any fiscal quarter in which Transfer Restricted Securities are sold to underwriters in a firm commitment or best efforts Underwritten Offering or (B) if not sold to underwriters in such an offering, beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the Registration Statement;

(xx) cause the Indenture to be qualified under the Trust Indenture Act not later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate with the Trustee and the Holders of Securities to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and to execute, and to use its commercially reasonable efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; and

(xxi) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act.

Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of any notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof, or until it is advised in writing (the “ Advice ”) by the Company that the use of the Prospectus may

 

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be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Company, each Holder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of such notice. In the event the Company shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by the number of days (a “ Delay Period ”) during the period from and including the date of the giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or shall have received the Advice; provided that there shall not be more than 75 days of Delay Periods during any 12-month period; provided further, however, that (except as provided in Section 5(iv) hereof) no such extension shall be taken into account in determining whether Additional Interest is due pursuant to Section 5 hereof or the amount of such Additional Interest, it being agreed that the Company’s option to suspend use of a Registration Statement pursuant to this paragraph shall be treated as a Registration Default for purposes of Section 5 hereof.

S ECTION  7. Registration Expenses.

(a) All expenses incident to the Company’s and the Guarantors’ performance of or compliance with this Agreement will be borne by the Company and the Guarantors, jointly and severally, regardless of whether a Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees and expenses (including filings made by any of the Dealer Managers or any Holder with FINRA (and, if applicable, the fees and expenses of any “qualified independent underwriter”, and one counsel to such person, that may be required by the rules and regulations of FINRA)); (ii) all fees and expenses of compliance with federal securities and state securities or blue sky laws (including the reasonable fees and disbursements of one counsel to the Holders of Transfer Restricted Securities); (iii) all expenses of printing (including printing certificates for the Exchange Securities to be issued in the Exchange Offer and printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Company, the Guarantors and, subject to Section 7(b) hereof, one counsel to the Holders of Transfer Restricted Securities; (v) all application and filing fees in connection with listing the Exchange Securities on a securities exchange or automated quotation system pursuant to the requirements thereof, if required to so list; and (vi) all fees and disbursements of independent certified public accountants of the Company and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance).

Each of the Company and the Guarantors will, in any event, bear its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company or the Guarantors.

(b) In connection with any Registration Statement required by this Agreement (including, without limitation, the Exchange Offer Registration Statement and the Shelf Registration Statement), the Company and the Guarantors, jointly and severally, will reimburse the Dealer Managers and the Holders of Transfer Restricted Securities being tendered in the

 

17


Exchange Offer and/or resold pursuant to the “Plan of Distribution” contained in the Exchange Offer Registration Statement or registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Simpson Thacher & Bartlett LLP or such other counsel as may be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared.

S ECTION  8. Indemnification.

(a) The Company and the Guarantors, jointly and severally, agree to indemnify and hold harmless (i) each Holder and (ii) each Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any Holder (any of the Persons referred to in this clause (ii) being hereinafter referred to as a “ controlling person ”) and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or any controlling person (any Person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an “ Indemnified Holder ”), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including, without limitation, and as incurred, reimbursement of all reasonable costs of investigating, preparing, pursuing, settling, compromising, paying or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of counsel to any Indemnified Holder), joint or several, directly or indirectly caused by, related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus (or any amendment or supplement thereto) or Free Writing Prospectus, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses are caused by an untrue statement or omission or alleged untrue statement or omission that is made in reliance upon and in conformity with information relating to any of the Holders furnished in writing to the Company by any of the Holders expressly for use therein. This indemnity agreement shall be in addition to any liability that the Company or any of the Guarantors may otherwise have.

In case any action or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought or asserted against any of the Indemnified Holders with respect to which indemnity may be sought against the Company or the Guarantors, such Indemnified Holder shall promptly notify the Company and the Guarantors in writing; provided, however, that the failure to give such notice shall not relieve any of the Company or the Guarantors of its obligations pursuant to this Agreement. Such Indemnified Holder shall have the right to employ its own counsel in any such action and the fees and expenses of such counsel shall be paid, as incurred, by the Company and the Guarantors (regardless of whether it is ultimately determined that an Indemnified Holder is not entitled to indemnification hereunder). The Company and the Guarantors shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for such Indemnified Holders, which firm shall be designated by the Holders. The Company and the Guarantors shall be liable for any settlement of any such action or proceeding effected with the

 

18


Company’s and the Guarantors’ prior written consent, which consent shall not be withheld unreasonably, and each of the Company and the Guarantors agrees to indemnify and hold harmless any Indemnified Holder from and against any loss, claim, damage, liability or expense by reason of any settlement of any action effected with the written consent of the Company and the Guarantors. The Company and the Guarantors shall not, without the prior written consent of each Indemnified Holder, settle or compromise or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any Indemnified Holder is a party thereto), unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Holder from all liability arising out of such action, claim, litigation or proceeding, and does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Holder.

(b) Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless the Company, the Guarantors and their respective directors, officers of the Company and the Guarantors who sign a Registration Statement, and any Person controlling (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Company or any of the Guarantors, and the respective officers, directors, partners, employees, representatives and agents of each such Person, to the same extent as the foregoing indemnity from the Company and the Guarantors to each of the Indemnified Holders, but only with respect to claims and actions based on information relating to such Holder furnished in writing by such Holder expressly for use in any Registration Statement. In case any action or proceeding shall be brought against the Company, the Guarantors or their respective directors or officers or any such controlling person in respect of which indemnity may be sought against a Holder of Transfer Restricted Securities, such Holder shall have the rights and duties given the Company and the Guarantors, and the Company, the Guarantors, their respective directors and officers and such controlling person shall have the rights and duties given to each Holder by the preceding paragraph.

(c) If the indemnification provided for in this Section 8 is unavailable to an indemnified party under Section 8(a) or (b) hereof (other than by reason of exceptions provided in those Sections) in respect of any losses, claims, damages, liabilities, judgments, actions or expenses referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one hand, and the Holders, on the other hand, from the Senior Notes Exchange Offer and Solicitations and the transactions contemplated thereby (which in the case of the Company and the Guarantors shall be deemed to be equal to the principal amount of the Initial Notes), the amount of Additional Interest which did not become payable as a result of the filing of the Registration Statement resulting in such losses, claims, damages, liabilities, judgments, actions or expenses, and such Registration Statement, or if such allocation is not permitted by applicable law, the relative fault of the Company and the Guarantors, on the one hand, and the Holders, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Company and the Guarantors, on the one hand, and of the Indemnified Holder on the other

 

19


shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or any of the Guarantors, on the one hand, or the Indemnified Holders, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 8(a) hereof, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.

The Company, the Guarantors and each Holder of Transfer Restricted Securities agree that it would not be just and equitable if contribution pursuant to this Section 8(c) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, none of the Holders (and its related Indemnified Holders) shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total price received with respect to the sale of the Initial Securities or Exchange Securities exceeds the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 8(c) are several in proportion to the respective principal amount of Initial Securities held by each of the Holders hereunder and not joint.

S ECTION  9. Rule 144A . Each of the Company and the Guarantors hereby agrees with each Holder, for so long as any Transfer Restricted Securities remain outstanding, to make available to any Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A under the Securities Act.

S ECTION  10. Participation in Underwritten Registrations . No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder’s Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements.

S ECTION  11. Selection of Underwriters . The Holders of Transfer Restricted Securities covered by the Shelf Registration Statement who desire to do so may sell such Transfer

 

20


Restricted Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker(s) and managing underwriter(s) that will administer such offering will be selected by the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering; provided, however , that such investment banker(s) and managing underwriter(s) must be reasonably satisfactory to the Company.

S ECTION  12. Miscellaneous.

(a) Remedies. Each of the Company and the Guarantors hereby agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate.

(b) No Inconsistent Agreements. Each of the Company and the Guarantors will not on or after the date of this Agreement enter into any agreement with respect to its securities that conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with the rights granted to the holders of the Company’s or any of the Guarantors’ securities under any agreement entered into or in effect on the date hereof.

(c) Adjustments Affecting the Securities. The Company will not effect any change, or permit any change to occur, in each case, with respect to the terms of the Securities that would materially and adversely affect the ability of the Holders to Consummate any Exchange Offer.

(d) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless the Company has (i) in the case of Section 5 hereof and this Section 12(d)(i), obtained the written consent of Holders of all outstanding Transfer Restricted Securities affected hereby and (ii) in the case of all other provisions hereof, obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities (excluding any Transfer Restricted Securities held by the Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities being tendered or registered; provided, however, that, with respect to any matter that directly or indirectly affects the rights of any Dealer Manager hereunder, the Company shall obtain the written consent of each such Dealer Manager with respect to which such amendment, qualification, supplement, waiver, consent or departure is to be effective.

(e) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery:

(i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and

 

21


(ii) if to the Company or the Guarantors:

Realogy Corporation

One Campus Drive

Parsippany, NJ 07054

Attention: General Counsel

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Telecopier No: (917) 777-3497

Attention: Stacy Kanter, Esq.

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture.

(f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without limitation, and without the need for an express assignment, subsequent Holders of Transfer Restricted Securities; provided, however , that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Securities from such Holder.

(g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

 

22


(k) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Company with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

23


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

 

REALOGY CORPORATION
By   /s/ Anthony E. Hull
  Name: Anthony E. Hull
  Title: EVP, CFO & Treasurer

 

DOMUS HOLDINGS CORP.
By   /s/ Anthony E. Hull
  Name: Anthony E. Hull
  Title: EVP, CFO & Treasurer

[Signature Page to Registrations Rights Agreement - 11.50% Senior Notes]


CARTUS CORPORATION
CDRE TM LLC
NRT INSURANCE AGENCY, INC.
REALOGY OPERATIONS LLC
REALOGY SERVICES GROUP LLC
REALOGY SERVICES VENTURE PARTNER LLC
SOTHEBY’S INTERNATIONAL REALTY
LICENSEE LLC
WREM, INC.
By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Chief Financial Officer

[Signature Page to Registrations Rights Agreement - 11.50% Senior Notes]


ASSOCIATES REALTY, INC.
CARTUS ASSET RECOVERY CORPORATION
CARTUS PARTNER CORPORATION
FEDSTATE STRATEGIC CONSULTING,
INCORPORATED
J.W. RIKER – NORTHERN R.I., INC.
LAKECREST TITLE, LLC
NRT PHILADELPHIA LLC
REFERRAL NETWORK LLC
THE CORCORAN GROUP EASTSIDE, INC.
By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Executive Vice President & Treasurer

[Signature Page to Registration Rights Agreement - 11.50% Senior Notes]


AMERICAN TITLE COMPANY OF HOUSTON

ATCOH HOLDING COMPANY

BURNET TITLE LLC

BURNET TITLE HOLDING LLC

BURROW ESCROW SERVICES, INC.

CORNERSTONE TITLE COMPANY

EQUITY TITLE COMPANY

EQUITY TITLE MESSENGER SERVICE HOLDING LLC

FIRST CALIFORNIA ESCROW CORPORATION

FRANCHISE SETTLEMENT SERVICES LLC

GUARDIAN HOLDING COMPANY

GUARDIAN TITLE AGENCY, LLC

GUARDIAN TITLE COMPANY

GULF SOUTH SETTLEMENT SERVICES, LLC

KEYSTONE CLOSING SERVICES LLC

MARKET STREET SETTLEMENT GROUP LLC

MID-ATLANTIC SETTLEMENT SERVICES LLC

NATIONAL COORDINATION ALLIANCE LLC

NRT SETTLEMENT SERVICES OF MISSOURI LLC

NRT SETTLEMENT SERVICES OF TEXAS LLC

PROCESSING SOLUTIONS LLC

SECURED LAND TRANSFERS LLC

ST. JOE TITLE SERVICES LLC

TAW HOLDING INC.

TEXAS AMERICAN TITLE COMPANY

TITLE RESOURCE GROUP AFFILIATES HOLDINGS LLC

TITLE RESOURCE GROUP HOLDINGS LLC

TITLE RESOURCE GROUP LLC

TITLE RESOURCE GROUP SERVICES LLC

TITLE RESOURCES INCORPORATED

TRG SERVICES, ESCROW, INC.

TRG SETTLEMENT SERVICES, LLP

WAYDAN TITLE, INC.

WEST COAST ESCROW COMPANY

By:   /s/ Thomas N. Rispoli
Name:   Thomas N. Rispoli
Title:   Chief Financial Officer

[Signature Page to Registration Rights Agreement - 11.50% Senior Notes]


BETTER HOMES AND GARDENS REAL ESTATE LLC

BETTER HOMES AND GARDENS REAL ESTATE LICENSEE LLC

CENTURY 21 REAL ESTATE LLC

CGRN, INC.

COLDWELL BANKER LLC

COLDWELL BANKER REAL ESTATE LLC

ERA FRANCHISE SYSTEMS LLC

GLOBAL CLIENT SOLUTIONS LLC

ONCOR INTERNATIONAL LLC

REALOGY FRANCHISE GROUP LLC

REALOGY GLOBAL SERVICES LLC

REALOGY LICENSING LLC

SOTHEBY’S INTERNATIONAL REALTY AFFILIATES LLC

WORLD REAL ESTATE MARKETING LLC

By:   /s/ Andrew G. Napurano
Name:   Andrew G. Napurano
Title:   Chief Financial Officer

[Signature Page to Registration Rights Agreement - 11.50% Senior Notes]


FSA MEMBERSHIP SERVICES, LLC
By:   /s/ Marilyn J. Wasser
Name:   Marilyn J. Wasser
Title:   Executive Vice President

[Signature Page to Registration Rights Agreement - 11.50% Senior Notes]


ALPHA REFERRAL NETWORK LLC

ASSOCIATED CLIENT REFERRAL LLC

ASSOCIATES REALTY NETWORK

BURGDORFF LLC

BURGDORFF REFERRAL ASSOCIATES LLC

BURNET REALTY LLC

CAREER DEVELOPMENT CENTER, LLC

COLDWELL BANKER COMMERCIAL PACIFIC PROPERTIES LLC

COLDWELL BANKER PACIFIC PROPERTIES LLC

COLDWELL BANKER REAL ESTATE SERVICES LLC

COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY

COLDWELL BANKER RESIDENTIAL BROKERAGE LLC

COLDWELL BANKER RESIDENTIAL REAL ESTATE LLC

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK, INC.

COLORADO COMMERCIAL, LLC

HOME REFERRAL NETWORK LLC

JACK GAUGHEN LLC

NRT ARIZONA LLC

NRT ARIZONA COMMERCIAL LLC

NRT ARIZONA REFERRAL LLC

NRT COLORADO LLC

NRT COLUMBUS LLC

NRT COMMERCIAL LLC

NRT COMMERCIAL UTAH LLC

NRT DEVELOPMENT ADVISORS LLC

NRT DEVONSHIRE LLC

NRT HAWAII REFERRAL, LLC

NRT LLC

NRT MID-ATLANTIC LLC

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

[Signature Page to Registration Rights Agreement - 11.50% Senior Notes]


NRT MISSOURI LLC

NRT MISSOURI REFERRAL NETWORK LLC

NRT NEW ENGLAND LLC

NRT NEW YORK LLC

NRT NORTHFORK LLC

NRT PITTSBURGH LLC

NRT REFERRAL NETWORK LLC

NRT RELOCATION LLC

NRT REOEXPERTS LLC

NRT SUNSHINE INC.

NRT TEXAS LLC

NRT UTAH LLC

REAL ESTATE REFERRAL LLC

REAL ESTATE REFERRALS LLC

REAL ESTATE SERVICES LLC

REFERRAL ASSOCIATES OF NEW ENGLAND LLC

REFERRAL NETWORK, LLC

REFERRAL NETWORK PLUS, INC.

SOTHEBY’S INTERNATIONAL REALTY, INC.

SOTHEBY’S INTERNATIONAL REALTY REFERRAL COMPANY, LLC

THE SUNSHINE GROUP (FLORIDA) LTD. CORP.

THE SUNSHINE GROUP, LTD.

VALLEY OF CALIFORNIA, INC.

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

[Signature Page to Registration Rights Agreement - 11.50% Senior Notes]


The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written:

 

J.P. MORGAN SECURITIES LLC
By:   /s/ David A. Dwyer
  Name: David A. Dwyer
  Title: Executive Director

 

CREDIT SUISSE SECURITIES (USA) LLC
By:   /s/ Malcolm Price
  Name: Malcolm Price
  Title: Managing Director

 

GOLDMAN, SACHS & CO.
By:   /s/ Goldman Sachs & Co.
  (Goldman, Sachs & Co.)

[Signature Page to Registration Rights Agreement - 11.50% Senior Notes]


Schedule A

Guarantors

Associates Realty, Inc.

Associates Realty Network

Burrow Escrow Services, Inc.

Coldwell Banker Real Estate LLC

Coldwell Banker Residential Brokerage Company

Coldwell Banker Residential Real Estate LLC

Coldwell Banker Residential Referral Network

Cornerstone Title Company

Equity Title Company

Guardian Title Company

National Coordination Alliance LLC

Realogy Operations LLC

Referral Network Plus, Inc.

Valley of California, Inc.

West Coast Escrow Company

Colorado Commercial, LLC

Guardian Title Agency, LLC

NRT Colorado LLC

Referral Network, LLC

Associated Client Referral LLC

Better Homes and Gardens Real Estate Licensee LLC

Better Homes and Gardens Real Estate LLC

Burgdorff LLC

Burgdorff Referral Associates LLC

Career Development Center, LLC

Cartus Asset Recovery Corporation

Cartus Corporation

Cartus Partner Corporation

CDRE TM LLC

Century 21 Real Estate LLC

CGRN, Inc.

Coldwell Banker LLC

Coldwell Banker Real Estate Services LLC

Coldwell Banker Residential Brokerage LLC

Equity Title Messenger Service Holding LLC

ERA Franchise Systems LLC

FedState Strategic Consulting, Incorporated

First California Escrow Corporation

Franchise Settlement Services LLC

FSA Membership Services, LLC

Global Client Solutions LLC


Guardian Holding Company

Gulf South Settlement Services, LLC

Jack Gaughen LLC

Keystone Closing Services LLC

NRT Arizona Commercial LLC

NRT Arizona LLC

NRT Arizona Referral LLC

NRT Columbus LLC

NRT Commercial LLC

NRT Commercial Utah LLC

NRT Development Advisors LLC

NRT Devonshire LLC

NRT Hawaii Referral, LLC

NRT LLC

NRT Mid-Atlantic LLC

NRT Missouri LLC

NRT Missouri Referral Network LLC

NRT New England LLC

NRT New York LLC

NRT Northfork LLC

NRT Philadelphia LLC

NRT Pittsburgh LLC

NRT Referral Network LLC

NRT Relocation LLC

NRT REOExperts LLC

NRT Settlement Services of Missouri LLC

NRT Settlement Services of Texas LLC

NRT Sunshine Inc.

NRT Utah LLC

ONCOR International LLC

Real Estate Referral LLC

Real Estate Referrals LLC

Real Estate Services LLC

Realogy Franchise Group LLC

Realogy Global Services LLC

Realogy Licensing LLC

Realogy Services Group LLC

Realogy Services Venture Partner LLC

Secured Land Transfers LLC

Sotheby’s International Realty Affiliates LLC

Sotheby’s International Realty Licensee LLC

Sotheby’s International Realty Referral Company, LLC

Title Resource Group Affiliates Holdings LLC

Title Resource Group Holdings LLC

Title Resource Group LLC

Title Resource Group Services LLC


Title Resources Incorporated

TRG Services, Escrow, Inc.

World Real Estate Marketing LLC

WREM, Inc.

Referral Network LLC

St. Joe Title Services LLC

The Sunshine Group (Florida) Ltd. Corp.

Coldwell Banker Commercial Pacific Properties LLC

Coldwell Banker Pacific Properties LLC

NRT Insurance Agency, Inc.

Referral Associates of New England LLC

Mid-Atlantic Settlement Services LLC

Sotheby’s International Realty, Inc.

Burnet Realty LLC

Burnet Title LLC

Burnet Title Holding LLC

Home Referral Network LLC

Market Street Settlement Group LLC

The Corcoran Group Eastside, Inc.

The Sunshine Group, Ltd.

Coldwell Banker Residential Referral Network, Inc.

TRG Settlement Services, LLP

J. W. Riker – Northern R.I., Inc.

Lakecrest Title, LLC

Alpha Referral Network

LLC

American Title Company of Houston

ATCOH Holding Company

NRT Texas LLC

Processing Solutions LLC

TAW Holding Inc.

Texas American Title Company

Waydan Title, Inc.

Exhibit 4.67

12.00% Senior Notes due 2017

REGISTRATION RIGHTS AGREEMENT

by and among

Realogy Corporation

Domus Holdings Corp.

the subsidiaries of Realogy Corporation parties hereto

and

J.P. Morgan Securities LLC

Credit Suisse Securities (USA) LLC

Goldman, Sachs & Co.

Dated as of January 5, 2011


REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “ Agreement ”) is made and entered into as of January 5, 2011, by and among Realogy Corporation, a Delaware corporation (the “ Company ”), Domus Holdings Corp., a Delaware corporation and the indirect parent of the Company (“ Holdings ”), the subsidiaries of the Company listed on Schedule A hereto (collectively, together with Holdings, the “ Guarantors ”), J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC. and Goldman, Sachs & Co. (each a “ Dealer Manager ” and, collectively, the “ Dealer Managers ”), each of whom has agreed to act as a dealer manager pursuant to the Dealer Manager Agreement (as defined below) with respect to the Company’s offer to exchange (the “ Senior Notes Exchange Offer ”) its 12.00% Senior Notes due 2017 (the “ Initial Notes ”) issued by the Company and fully and unconditionally guaranteed by the Guarantors (the “ Guarantees ”) for certain of its 11.00%/11.75% Senior Toggle Notes due 2014 (the “ Outstanding Securities”) and the Company’s concurrent solicitation of consents to amend the indenture pursuant to which the Outstanding Securities were issued (the “ Solicitations ”). The Initial Notes and the Guarantees thereof are herein collectively referred to as the “ Initial Securities ”.

This Agreement is made pursuant to the Dealer Manager Agreement, dated November 30, 2010 (the “ Dealer Manager Agreement ”), among the Company, the Guarantors and the Dealer Managers for the benefit of the holders from time to time of the Initial Securities. In connection with the Dealer Manager Agreement and the Senior Notes Exchange Offer, the Company and the Guarantors have agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Dealer Managers set forth in Section 6(h) of the Dealer Manager Agreement.

The parties hereby agree as follows:

S ECTION  1. Definitions . As used in this Agreement, the following capitalized terms shall have the following meanings:

Additional Interest: Any additional interest payable with respect to the Transfer Restricted Securities due to an increase in interest rate pursuant to Section 5 hereof.

Advice: As defined in Section 6 hereof.

Agreement: As defined in the preamble hereto.

Broker-Dealer: Any broker or dealer registered under the Exchange Act.

Business Day: Any day other than a Saturday, Sunday or U.S. federal holiday or a day on which banking institutions or trust companies located in New York, New York are authorized or obligated to be closed.

Closing Date: The date of this Agreement.

Commission: The Securities and Exchange Commission.

Company: As defined in the preamble hereto.


Consummate: A registered Exchange Offer shall be deemed “Consummated” for purposes of this Agreement upon the occurrence of (i) the filing and effectiveness under the Securities Act of the Exchange Offer Registration Statement relating to the Exchange Securities to be issued in the Exchange Offer, (ii) the maintenance of such Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the minimum period required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company to the registrar under the Indenture of Exchange Securities in the same aggregate principal amount as the aggregate principal amount of Initial Securities that were tendered by Holders thereof pursuant to the Exchange Offer.

Dealer Manager Agreement: As defined in the preamble hereto.

Dealer Managers: As defined in the preamble hereto.

Delay Period: As defined in Section 6 hereof.

Exchange Act: The Securities Exchange Act of 1934, as amended.

Exchange Offer: The registration by the Company and the Guarantors under the Securities Act of the Exchange Securities pursuant to a Registration Statement pursuant to which the Company offers the Holders of all outstanding Transfer Restricted Securities the opportunity to exchange all such outstanding Transfer Restricted Securities held by such Holders for Exchange Securities in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Securities tendered in such exchange offer by such Holders.

Exchange Offer Registration Statement: The Registration Statement relating to the Exchange Offer, including the related Prospectus.

Exchange Securities: The 12.00% Senior Notes due 2017 of the same series under the Indenture as the Initial Notes and the Guarantees thereof, to be issued to Holders in exchange for Transfer Restricted Securities pursuant to this Agreement.

FINRA: The Financial Industry Regulatory Authority, Inc.

Free Writing Prospectus: Any free writing prospectus, as such term is defined in Rule 405 under the Securities Act, relating to any portion of the Securities.

Guarantees: As defined in the preamble hereto.

Guarantors: As defined in the preamble hereto.

Holders: As defined in Section 2(b) hereof.

Holdings: As defined in the preamble hereto.

Indemnified Holder: As defined in Section 8(a) hereof.

 

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Indenture: The Indenture dated as of January 5, 2011, by and among the Company, the Guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee (the “ Trustee ”), pursuant to which the Initial Securities and the Exchange Securities are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof.

Initial Notes: As defined in the preamble hereto.

Initial Securities: As defined in the preamble hereto.

Other Notes: the Company’s $491,824,000 aggregate principal amount of 11.50% Senior Notes due 2017 and $10,282,000 aggregate principal amount of 13.375% Senior Subordinated Notes due 2018.

Outstanding Securities: As defined in the preamble hereto.

Person: An individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.

Prospectus: The prospectus included in a Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus.

Registration Default: As defined in Section 5 hereof.

Registration Statement: Any registration statement of the Company and the Guarantors relating to (a) an offering of Exchange Securities pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to a Shelf Registration Statement, which is filed pursuant to the provisions of this Agreement, in each case, including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein.

Securities: The Exchange Securities and/or any Transfer Restricted Securities registered pursuant to a Shelf Registration Statement.

Securities Act: The Securities Act of 1933, as amended.

Senior Notes Exchange Offer : As defined in the preamble hereto.

Shelf Registration Statement: As defined in Section 4(a) hereof.

Solicitations: As defined in the preamble hereto.

10-K Filing Date: As defined in Section 3(a) hereof.

Transfer Restricted Securities: Each Initial Security, until the earliest to occur of (a) the date on which such Initial Security is exchanged in the Exchange Offer for an Exchange Security entitled to be resold to the public by the Holder thereof without complying with the prospectus delivery requirements of the Securities Act, (b) the date on which such Initial Security has been

 

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effectively registered under the Securities Act and disposed of in accordance with a Shelf Registration Statement and (c) the date on which such securities cease to be outstanding (whether as a result of a repurchase, cancellation or otherwise).

Trust Indenture Act: The Trust Indenture Act of 1939, as amended.

Trustee: As defined in the definition of Indenture above.

Underwritten Registration or Underwritten Offering: A registration in which securities of the Company are sold to an underwriter for reoffering to the public.

S ECTION  2. Securities Subject to this Agreement.

(a) Transfer Restricted Securities. The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities.

(b) Holders of Transfer Restricted Securities. A Person is deemed to be a holder of Transfer Restricted Securities (each, a “ Holder ”) whenever such Person owns Transfer Restricted Securities.

S ECTION  3. Registered Exchange Offer.

(a) Unless the Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) hereof have been complied with), each of the Company and the Guarantors shall (i) file a Registration Statement filed under the Securities Act relating to the Exchange Securities and the Exchange Offer with the Commission on or prior to 15 days after the date that the Company would be obligated to file its Form 10-K for the year ended December 31, 2010 with the Commission if the Company were a non-accelerated filer subject to Sections 13 or 15(d) of the Exchange Act (the “ 10-K Filing Date ”), (ii) cause such Registration Statement to become effective as promptly as possible (unless it becomes effective automatically upon filing), but in no event later than 120 days after the 10-K Filing Date (or if such 120th day is not a Business Day, the next succeeding Business Day) and (iii) in connection with the foregoing, (A) file all pre-effective amendments to such Registration Statement as may be necessary in order to cause such Registration Statement to become effective, (B) file, if applicable, a post-effective amendment to such Registration Statement pursuant to Rule 430B under the Securities Act and (C) cause all necessary filings in connection with the registration and qualification of the Exchange Securities to be made under the state securities or blue sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer, and (iv) upon the effectiveness of such Registration Statement, commence the Exchange Offer. The Exchange Offer shall be on the appropriate form permitting registration of the Exchange Securities to be offered in exchange for the Transfer Restricted Securities and to permit resales of Initial Securities held by Broker-Dealers as contemplated by Section 3(c) hereof.

(b) The Company and the Guarantors shall cause the Exchange Offer Registration Statement to be effective continuously and shall keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however , that in no event shall such period be less

 

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than 30 days after the date notice of the Exchange Offer is mailed to the Holders. The Company shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Exchange Securities and the exchange securities to be issued to holders in exchange for Other Notes, pursuant to registration rights agreements dated the date hereof shall be included in the Exchange Offer Registration Statement. The Company shall cause the Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in no event later than 30 Business Days after the date notice of the Exchange Offer is required to be mailed to the Holders.

(c) The Company shall indicate in a “Plan of Distribution” section contained in the Prospectus forming a part of the Exchange Offer Registration Statement that any Broker-Dealer who holds Initial Securities that are Transfer Restricted Securities and that were acquired for its own account as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Company) may exchange such Initial Securities pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter” within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the Exchange Securities received by such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer Registration Statement. Such “Plan of Distribution” section shall also contain all other information with respect to such resales by Broker-Dealers that the Commission may require in order to permit such resales pursuant thereto, but such “Plan of Distribution” shall not name any such Broker-Dealer or disclose the amount of Initial Securities held by any such Broker-Dealer except to the extent required by the Commission.

Each of the Company and the Guarantors shall keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 6(c) hereof to the extent necessary to ensure that it is available for resales of Initial Securities acquired by Broker-Dealers for their own accounts as a result of market-making activities or other trading activities, and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period ending on the earlier of (i) 180 days from the date on which the Exchange Offer Registration Statement is declared effective and (ii) the date on which a Broker-Dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities.

The Company shall provide sufficient copies of the latest version of such Prospectus to Broker-Dealers promptly upon request at any time during such 180-day (or shorter as provided in the foregoing sentence) period in order to facilitate such resales.

S ECTION  4. Shelf Registration.

(a) Shelf Registration. If (i) the Company and the Guarantors are not required to file the Exchange Offer Registration Statement or to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a) hereof have been complied with), (ii) for any reason the Exchange Offer is not Consummated within 30 Business Days after the date notice of the Exchange Offer is

 

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required to be mailed to the Holders or (iii) with respect to any Holder of Transfer Restricted Securities (A) such Holder is prohibited by applicable law or Commission policy from participating in the Exchange Offer, or (B) such Holder may not resell the Exchange Securities acquired by it in the Exchange Offer to the public without delivering a prospectus (other than by reason of such Holder’s status as an affiliate of the Company) and the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder, or (C) such Holder is a Broker-Dealer and holds Initial Securities acquired directly from the Company or one of its affiliates, then, upon such Holder’s request prior to the 20th day following consummation of the Exchange Offer, the Company and the Guarantors shall:

(x) cause to be filed a shelf registration statement pursuant to Rule 415 under the Securities Act, which may be an amendment to the Exchange Offer Registration Statement (in either event, the “ Shelf Registration Statement ”) as soon as practicable but in any event on or prior to the later of (x) 90 days after such filing obligation arises (or if such 90th day is not a Business Day, the next succeeding Business Day) and (y) 15 days after the 10-K Filing Date (or if such 15th day is not a Business Day, the next succeeding Business Day), which Shelf Registration Statement shall provide for resales of all Transfer Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof (but shall not include any other securities unless approved by a majority of the Holders whose Transfer Restricted Securities are to be covered by such Shelf Registration Statement); and

(y) cause such Shelf Registration Statement to be declared effective by the Commission as promptly as possible (unless it becomes effective automatically upon filing), and in any event on or prior to the later of (x) 120 days after the 10-K Filing Date (or if such 120th day is not a Business Day, the next succeeding Business Day) and (y) 180 days after such obligation to file such Shelf Registration Statement arises (or if such 180th day is not a Business Day, the next succeeding Business Day).

Each of the Company and the Guarantors shall keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for resales of Initial Securities by the Holders of Transfer Restricted Securities entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of at least two years following the effective date of such Shelf Registration Statement (or shorter period that will terminate when all the Initial Securities covered by such Shelf Registration Statement have been sold pursuant to such Shelf Registration Statement). During the period during which the Company and the Guarantors are required to maintain an effective Shelf Registration Statement pursuant to this Agreement, the Company and the Guarantors will, prior to the expiration of that Shelf Registration Statement, file, cause to be declared effective (unless it becomes effective automatically upon filing) within a period that avoids any interruption in the ability of Holders of Securities covered by the expiring Shelf Registration Statement to make registered dispositions, a new registration statement relating to the Securities, which shall be deemed the “Shelf Registration Statement” for purposes of this Agreement.

 

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(b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 20 Business Days after receipt of a request therefor, such information as the Company may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein or amendment or supplement thereto or Free Writing Prospectus. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.

S ECTION  5. Additional Interest . If (i) any of the Registration Statements required by this Agreement has not been filed within 15 days after the 10-K Filing Date, (ii) any of the Registration Statements required by this Agreement has not been declared effective by the Commission (or become automatically effective) within 120 days after the 10-K Filing Date, (iii) the Exchange Offer has not been Consummated within 160 days after the 10-K Filing Date with respect to the Exchange Offer Registration Statement or (iv) any Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded immediately by a post-effective amendment to such Registration Statement that cures such failure and that is itself immediately declared or automatically becomes effective (except in the case of a Registration Statement that ceases to be effective or usable as specifically permitted by the last paragraph of Section 6 hereof) (each such event referred to in clauses (i) through (iv), a “ Registration Default ”), the Company hereby agrees that the interest rate borne by the Transfer Restricted Securities shall be increased by 0.25% per annum during the 90-day period immediately following the occurrence of any Registration Default and shall increase by 0.25% per annum at the end of each subsequent 90-day period, but in no event shall such increase exceed 1.00% per annum. Following the earliest of (x) the cure of all Registration Defaults relating to any particular Transfer Restricted Securities, (y) the date on which such Transfer Restricted Security ceases to be a Transfer Restricted Security and (z) the date that is two years after the Closing Date, the interest rate borne by the relevant Transfer Restricted Securities will be reduced to the original interest rate borne by such Transfer Restricted Securities and the accrual of Additional Interest will cease with respect to such Transfer Restricted Security; provided, however, that if, after any such reduction in interest rate, a different Registration Default occurs, the interest rate borne by the relevant Transfer Restricted Securities shall again be increased pursuant to the foregoing provisions. All accrued Additional Interest will be paid by the Company and the Guarantors on each interest payment date to the Holder in the same manner as interest is paid under the Indenture.

Notwithstanding the foregoing, (i) the amount of Additional Interest payable shall not increase because more than one Registration Default has occurred and is pending and (ii) a Holder of Transfer Restricted Securities that is not entitled to the benefits of the Shelf Registration Statement (because, e.g. , such Holder has not elected to include information or has not timely delivered such information to the Company pursuant to Section 4(b) hereof) shall not be entitled to Additional Interest with respect to a Registration Default that pertains to the Shelf Registration Statement.

 

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All obligations of the Company and the Guarantors set forth in the first paragraph of this Section 5 that are outstanding with respect to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted Security shall survive until such time as all such obligations with respect to such security shall have been satisfied in full.

S ECTION  6. Registration Procedures.

(a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Company and the Guarantors shall comply with all of the provisions of Section 6(c) hereof, shall effect such exchange to permit the sale of Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and shall comply with all of the following provisions:

(i) If in the reasonable opinion of counsel to the Company there is a question as to whether the Exchange Offer is permitted by applicable law, each of the Company and the Guarantors hereby agrees to seek a favorable decision from the Commission allowing the Company and the Guarantors to Consummate an Exchange Offer for such Initial Securities. Each of the Company and the Guarantors hereby agrees to pursue the issuance of such a decision to the Commission staff level but shall not be required to take commercially unreasonable action to effect a change of Commission policy. Each of the Company and the Guarantors hereby agrees, however, to (A) participate in telephonic conferences with the Commission, (B) deliver to the Commission staff an analysis prepared by counsel to the Company setting forth the legal bases, if any, upon which such counsel has concluded that such an Exchange Offer should be permitted and (C) diligently pursue a favorable resolution by the Commission staff of such submission.

(ii) As a condition to its participation in the Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted Securities shall furnish, upon the request of the Company, prior to the Consummation thereof, a written representation to the Company (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an affiliate of the Company, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any Person to participate in, a distribution of the Exchange Securities to be issued in the Exchange Offer and (C) it is acquiring the Exchange Securities in its ordinary course of business. In addition, all such Holders of Transfer Restricted Securities shall otherwise cooperate in the Company’s preparations for the Exchange Offer. Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Exchange Offer to participate in a distribution of the securities to be acquired in the Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (which may include any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and that such a secondary resale transaction should be covered by an effective registration statement containing the selling

 

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security holder information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of Exchange Securities obtained by such Holder in exchange for Initial Securities acquired by such Holder directly from the Company.

(b) Shelf Registration Statement. In connection with the Shelf Registration Statement, each of the Company and the Guarantors shall comply with all the provisions of Section 6(c) hereof and shall effect such registration (unless automatically declared effective) to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and pursuant thereto each of the Company and the Guarantors will as expeditiously as is commercially reasonable prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Securities Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof.

(c) General Provisions. In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities and any Free Writing Prospectus (including, without limitation, any Registration Statement and the related Prospectus required to permit resales of Initial Securities by Broker-Dealers and any Free Writing Prospectus related thereto), each of the Company and the Guarantors shall:

(i) use its commercially reasonable efforts to keep such Registration Statement continuously effective during the period required by this Agreement and provide all requisite financial statements (including, if required by the Securities Act or any regulation thereunder, financial statements of the Guarantors for the period specified in Section 3 or 4 hereof, as applicable); upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Company shall file promptly an appropriate amendment to such Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B) use its commercially reasonable efforts to cause such amendment to be declared effective (unless automatically declared effective) and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter;

(ii) prepare and file with the Commission such amendments and post-effective amendments to the applicable Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, as applicable, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424, 430A and 430B under the Securities Act in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by

 

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the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;

(iii) advise the underwriter(s), if any, and selling Holders promptly and, if requested by such Persons, to confirm such advice in writing, (A) when the Prospectus, any Prospectus supplement, any post-effective amendment or any Free Writing Prospectus has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Securities Act, of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, of the issuance by the Commission of a notification of objection to the use of the form on which the Registration Statement has been filed, or of the happening of any event that causes the Company to become an “ineligible issuer,” as defined in Rule 405 under the Securities Act and (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement or a notification of objection to the use of the form on which the Registration Statement has been filed or if any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or blue sky laws, each of the Company and the Guarantors shall use its commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest practicable time;

(iv) (A) furnish without charge to each of the Dealer Managers, each selling Holder named in any Registration Statement that has requested such copies, if any, and each of the underwriter(s), if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which documents will be subject to the review and comment of such requesting Holders and underwriter(s) in connection with such sale, if any, for a period of at least five Business Days, and the Company will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference) to which a Dealer Manager of Transfer Restricted Securities covered by such Registration Statement or the underwriter(s), if any, shall reasonably object in writing within five Business Days after the receipt thereof (such objection to be deemed timely made upon confirmation of telecopy transmission within such period). The objection of a Dealer Manager or underwriter, if any, shall be deemed to be reasonable if such Registration Statement,

 

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amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission;

(B) furnish without charge to each of the Dealer Managers before filing with the Commission, a copy of any Free Writing Prospectus, which will be subject to the consent of the Dealer Managers, and the Company will not file any such Free Writing Prospectus to which the Dealer Managers of Transfer Restricted Securities covered by such Registration Statement have not consented (such consent not to be unreasonably withheld, conditioned or delayed);

(v) promptly prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to the Dealer Managers, each selling Holder named in any Registration Statement that has requested such documents, if any, and to the underwriter(s), if any, make the Company’s and the Guarantors’ representatives available for discussion of such document and other customary due diligence matters, subject to customary confidentiality agreements, and include such information in such document prior to the filing thereof as such selling Holders or underwriter(s), if any, reasonably may request;

(vi) make available, subject to customary confidentiality agreements, at reasonable times for inspection by the Dealer Managers, the managing underwriter(s), if any, participating in any disposition pursuant to such Registration Statement and any attorney or accountant retained by such Dealer Managers or any of the underwriter(s), all financial and other records, pertinent corporate documents and properties of each of the Company and the Guarantors, and cause the Company’s and the Guarantors’ officers, directors and employees to supply all information, in each case as shall be reasonably necessary to enable any such Holder, underwriter, attorney or accountant to exercise any applicable responsibilities in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness and to participate in meetings with investors to the extent reasonably requested by the managing underwriter(s), if any;

(vii) if requested by any selling Holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the “Plan of Distribution” of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

(viii) cause the Transfer Restricted Securities covered by the Registration Statement to be rated with the appropriate rating agencies, if so requested by the Holders

 

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of a majority in aggregate principal amount of Securities covered thereby or the underwriter(s), if any;

(ix) furnish to each Dealer Manager, each selling Holder and each of the underwriter(s), if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including financial statements and schedules, all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference);

(x) deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; each of the Company and the Guarantors hereby consents to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto;

(xi) enter into such agreements (including an underwriting agreement), and make such representations and warranties, and take all such other commercially reasonable actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Shelf Registration Statement contemplated by this Agreement, all to such extent as may be reasonably requested by any Dealer Manager or by any Holder of Transfer Restricted Securities or underwriter in connection with any sale or resale pursuant to any Shelf Registration Statement contemplated by this Agreement; and whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, each of the Company and the Guarantors shall:

(A) furnish to each Dealer Manager, each selling Holder and each underwriter, if any, in such substance and scope as they may reasonably request and as are customarily made by issuers to underwriters in primary underwritten offerings, upon the date of the effectiveness of the Shelf Registration Statement:

(1) a certificate, dated the date of effectiveness of the Shelf Registration Statement, as the case may be, signed by (y) in the case of the Company, the President or any Vice President and a principal financial or accounting officer and (z) in the case of the Guarantors, the President or any Vice President, in each case, confirming, as of the date thereof, the matters set forth in Section 6(e) of the Dealer Manager Agreement and such other matters as such parties may reasonably request;

(2) if requested by a majority of selling Holders, an opinion, dated the date of effectiveness of the Shelf Registration Statement, as the case may be, of (i) counsel for the Company and the Guarantors, covering the matters set forth in the opinion delivered pursuant to Section 6(c) of the Dealer Manager Agreement and (ii) the General Counsel of the Company and the Guarantors, covering matters set forth in the opinion delivered

 

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pursuant to Section 6(c) of the Dealer Manager Agreement and such other matters customarily covered in opinions requested in similar offerings, and in each case, including a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Company and the Guarantors, representatives of the independent public accountants for the Company and the Guarantors, representatives of the underwriter(s), if any, and counsel to the underwriter(s), if any, in connection with the preparation of such Registration Statement and the related Prospectus and have considered the matters required to be stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing, no facts came to such counsel’s attention that caused such counsel to believe that the applicable Shelf Registration Statement, (A) at the date of the opinion and at the time such Shelf Registration Statement or any post-effective amendment thereto became effective and (B) at the applicable time identified by such Holders or managing underwriters, in the case of (A) and (B) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus contained in such Shelf Registration Statement as of its date contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein not misleading. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial or statistical data included in any Shelf Registration Statement contemplated by this Agreement or the related Prospectus, and such opinions may be further subject to assumptions and qualifications substantially similar to those set forth in the opinions delivered pursuant to Sections 6(c) of the Dealer Manager Agreement; and

(3) a customary comfort letter, dated the date of effectiveness of the Shelf Registration Statement, from the Company’s independent accountants, in the customary form and covering matters of the type customarily requested to be covered in comfort letters by underwriters in connection with primary underwritten offerings, and covering or affirming the matters set forth in the comfort letter delivered pursuant to Section 6(d) of the Dealer Manager Agreement, without exception;

(B) set forth in full or incorporate by reference in the underwriting agreement, if any, the indemnification provisions and procedures of Section 8 hereof with respect to all parties to be indemnified pursuant to said Section; and

(C) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with Section 6(c)(xi)(A) hereof and with any customary conditions contained in the underwriting agreement or

 

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other agreement entered into by the Company or any of the Guarantors pursuant to this Section 6(c)(xi), if any.

If at any time the representations and warranties of the Company and the Guarantors contemplated in Section 6(c)(xi)(A)(1) hereof cease to be true and correct, the Company or the Guarantors shall so advise the Dealer Managers and the underwriter(s), if any, and each selling Holder promptly and, if requested by such Persons, shall confirm such advice in writing;

(xii) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Securities under the state securities or blue sky laws of such jurisdictions as the selling Holders or underwriter(s), if any, may request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the Shelf Registration Statement; provided, however , that none of the Company or the Guarantors shall be required to register or qualify as a foreign corporation where it is not then so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not then so subject;

(xiii) issue, upon the request of any Holder of Initial Securities covered by the Shelf Registration Statement, Exchange Securities having an aggregate principal amount equal to the aggregate principal amount of Initial Securities surrendered to the Company by such Holder in exchange therefor or being sold by such Holder, such Exchange Securities to be registered in the name of such Holder or in the name of the purchaser(s) of such Securities, as the case may be; in return, the Initial Securities held by such Holder shall be surrendered to the Company for cancellation;

(xiv) subject to the terms of the Indenture, cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Securities to be in such denominations and registered in such names as the Holders or the underwriter(s), if any, may request at least two Business Days prior to any sale of Transfer Restricted Securities made by such Holders or underwriter(s);

(xv) use its commercially reasonable efforts to cause the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in Section 6(c)(xii) hereof;

(xvi) if any fact or event contemplated by Section 6(c)(iii)(D) hereof shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file

 

15


any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading;

(xvii) provide a CUSIP number for all Securities not later than the effective date of the Registration Statement covering such Securities and provide the Trustee under the applicable Indenture with printed certificates for such Securities which are in a form eligible for deposit with The Depository Trust Company and take all other action necessary to ensure that all such Securities are eligible for deposit with The Depository Trust Company;

(xviii) cooperate and assist in any filings required to be made with FINRA and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter”) that is required to be retained in accordance with the rules and regulations of FINRA;

(xix) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders, as soon as practicable, a consolidated earning statement meeting the requirements of Rule 158 (which need not be audited) for the twelve-month period (A) commencing at the end of any fiscal quarter in which Transfer Restricted Securities are sold to underwriters in a firm commitment or best efforts Underwritten Offering or (B) if not sold to underwriters in such an offering, beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the Registration Statement;

(xx) cause the Indenture to be qualified under the Trust Indenture Act not later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate with the Trustee and the Holders of Securities to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and to execute, and to use its commercially reasonable efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; and

(xxi) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act.

Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of any notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof, or until it is advised in writing (the “ Advice ”) by the Company that the use of the Prospectus may

 

16


be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Company, each Holder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of such notice. In the event the Company shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by the number of days (a “ Delay Period ”) during the period from and including the date of the giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or shall have received the Advice; provided that there shall not be more than 75 days of Delay Periods during any 12-month period; provided further, however, that (except as provided in Section 5(iv) hereof) no such extension shall be taken into account in determining whether Additional Interest is due pursuant to Section 5 hereof or the amount of such Additional Interest, it being agreed that the Company’s option to suspend use of a Registration Statement pursuant to this paragraph shall be treated as a Registration Default for purposes of Section 5 hereof.

S ECTION  7. Registration Expenses.

(a) All expenses incident to the Company’s and the Guarantors’ performance of or compliance with this Agreement will be borne by the Company and the Guarantors, jointly and severally, regardless of whether a Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees and expenses (including filings made by any of the Dealer Managers or any Holder with FINRA (and, if applicable, the fees and expenses of any “qualified independent underwriter”, and one counsel to such person, that may be required by the rules and regulations of FINRA)); (ii) all fees and expenses of compliance with federal securities and state securities or blue sky laws (including the reasonable fees and disbursements of one counsel to the Holders of Transfer Restricted Securities); (iii) all expenses of printing (including printing certificates for the Exchange Securities to be issued in the Exchange Offer and printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Company, the Guarantors and, subject to Section 7(b) hereof, one counsel to the Holders of Transfer Restricted Securities; (v) all application and filing fees in connection with listing the Exchange Securities on a securities exchange or automated quotation system pursuant to the requirements thereof, if required to so list; and (vi) all fees and disbursements of independent certified public accountants of the Company and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance).

Each of the Company and the Guarantors will, in any event, bear its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company or the Guarantors.

(b) In connection with any Registration Statement required by this Agreement (including, without limitation, the Exchange Offer Registration Statement and the Shelf Registration Statement), the Company and the Guarantors, jointly and severally, will reimburse the Dealer Managers and the Holders of Transfer Restricted Securities being tendered in the

 

17


Exchange Offer and/or resold pursuant to the “Plan of Distribution” contained in the Exchange Offer Registration Statement or registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Simpson Thacher & Bartlett LLP or such other counsel as may be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared.

S ECTION  8. Indemnification.

(a) The Company and the Guarantors, jointly and severally, agree to indemnify and hold harmless (i) each Holder and (ii) each Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any Holder (any of the Persons referred to in this clause (ii) being hereinafter referred to as a “ controlling person ”) and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or any controlling person (any Person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an “ Indemnified Holder ”), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including, without limitation, and as incurred, reimbursement of all reasonable costs of investigating, preparing, pursuing, settling, compromising, paying or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of counsel to any Indemnified Holder), joint or several, directly or indirectly caused by, related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus (or any amendment or supplement thereto) or Free Writing Prospectus, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses are caused by an untrue statement or omission or alleged untrue statement or omission that is made in reliance upon and in conformity with information relating to any of the Holders furnished in writing to the Company by any of the Holders expressly for use therein. This indemnity agreement shall be in addition to any liability that the Company or any of the Guarantors may otherwise have.

In case any action or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought or asserted against any of the Indemnified Holders with respect to which indemnity may be sought against the Company or the Guarantors, such Indemnified Holder shall promptly notify the Company and the Guarantors in writing; provided, however, that the failure to give such notice shall not relieve any of the Company or the Guarantors of its obligations pursuant to this Agreement. Such Indemnified Holder shall have the right to employ its own counsel in any such action and the fees and expenses of such counsel shall be paid, as incurred, by the Company and the Guarantors (regardless of whether it is ultimately determined that an Indemnified Holder is not entitled to indemnification hereunder). The Company and the Guarantors shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for such Indemnified Holders, which firm shall be designated by the Holders. The Company and the Guarantors shall be liable for any settlement of any such action or proceeding effected with the

 

18


Company’s and the Guarantors’ prior written consent, which consent shall not be withheld unreasonably, and each of the Company and the Guarantors agrees to indemnify and hold harmless any Indemnified Holder from and against any loss, claim, damage, liability or expense by reason of any settlement of any action effected with the written consent of the Company and the Guarantors. The Company and the Guarantors shall not, without the prior written consent of each Indemnified Holder, settle or compromise or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any Indemnified Holder is a party thereto), unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Holder from all liability arising out of such action, claim, litigation or proceeding, and does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Holder.

(b) Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless the Company, the Guarantors and their respective directors, officers of the Company and the Guarantors who sign a Registration Statement, and any Person controlling (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Company or any of the Guarantors, and the respective officers, directors, partners, employees, representatives and agents of each such Person, to the same extent as the foregoing indemnity from the Company and the Guarantors to each of the Indemnified Holders, but only with respect to claims and actions based on information relating to such Holder furnished in writing by such Holder expressly for use in any Registration Statement. In case any action or proceeding shall be brought against the Company, the Guarantors or their respective directors or officers or any such controlling person in respect of which indemnity may be sought against a Holder of Transfer Restricted Securities, such Holder shall have the rights and duties given the Company and the Guarantors, and the Company, the Guarantors, their respective directors and officers and such controlling person shall have the rights and duties given to each Holder by the preceding paragraph.

(c) If the indemnification provided for in this Section 8 is unavailable to an indemnified party under Section 8(a) or (b) hereof (other than by reason of exceptions provided in those Sections) in respect of any losses, claims, damages, liabilities, judgments, actions or expenses referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one hand, and the Holders, on the other hand, from the Senior Notes Exchange Offer and Solicitations and the transactions contemplated thereby (which in the case of the Company and the Guarantors shall be deemed to be equal to the principal amount of the Initial Notes), the amount of Additional Interest which did not become payable as a result of the filing of the Registration Statement resulting in such losses, claims, damages, liabilities, judgments, actions or expenses, and such Registration Statement, or if such allocation is not permitted by applicable law, the relative fault of the Company and the Guarantors, on the one hand, and the Holders, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Company and the Guarantors, on the one hand, and of the Indemnified Holder on the other

 

19


shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or any of the Guarantors, on the one hand, or the Indemnified Holders, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 8(a) hereof, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.

The Company, the Guarantors and each Holder of Transfer Restricted Securities agree that it would not be just and equitable if contribution pursuant to this Section 8(c) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, none of the Holders (and its related Indemnified Holders) shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total price received with respect to the sale of the Initial Securities or Exchange Securities exceeds the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 8(c) are several in proportion to the respective principal amount of Initial Securities held by each of the Holders hereunder and not joint.

S ECTION  9. Rule 144A . Each of the Company and the Guarantors hereby agrees with each Holder, for so long as any Transfer Restricted Securities remain outstanding, to make available to any Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A under the Securities Act.

S ECTION  10. Participation in Underwritten Registrations . No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder’s Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements.

S ECTION  11. Selection of Underwriters . The Holders of Transfer Restricted Securities covered by the Shelf Registration Statement who desire to do so may sell such Transfer

 

20


Restricted Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker(s) and managing underwriter(s) that will administer such offering will be selected by the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering; provided, however , that such investment banker(s) and managing underwriter(s) must be reasonably satisfactory to the Company.

S ECTION  12. Miscellaneous.

(a) Remedies. Each of the Company and the Guarantors hereby agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate.

(b) No Inconsistent Agreements. Each of the Company and the Guarantors will not on or after the date of this Agreement enter into any agreement with respect to its securities that conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with the rights granted to the holders of the Company’s or any of the Guarantors’ securities under any agreement entered into or in effect on the date hereof.

(c) Adjustments Affecting the Securities. The Company will not effect any change, or permit any change to occur, in each case, with respect to the terms of the Securities that would materially and adversely affect the ability of the Holders to Consummate any Exchange Offer.

(d) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless the Company has (i) in the case of Section 5 hereof and this Section 12(d)(i), obtained the written consent of Holders of all outstanding Transfer Restricted Securities affected hereby and (ii) in the case of all other provisions hereof, obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities (excluding any Transfer Restricted Securities held by the Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities being tendered or registered; provided, however, that, with respect to any matter that directly or indirectly affects the rights of any Dealer Manager hereunder, the Company shall obtain the written consent of each such Dealer Manager with respect to which such amendment, qualification, supplement, waiver, consent or departure is to be effective.

(e) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery:

(i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and

 

21


(ii) if to the Company or the Guarantors:

Realogy Corporation

One Campus Drive

Parsippany, NJ 07054

Attention: General Counsel

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Telecopier No: (917) 777-3497

Attention: Stacy Kanter, Esq.

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture.

(f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without limitation, and without the need for an express assignment, subsequent Holders of Transfer Restricted Securities; provided, however , that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Securities from such Holder.

(g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

(k) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and

 

22


understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Company with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

23


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

 

REALOGY CORPORATION
  By   /s/ Anthony E. Hull
    Name: Anthony E. Hull
    Title: EVP, CFO & Treasurer
DOMUS HOLDINGS CORP.
  By   /s/ Anthony E. Hull
    Name: Anthony E. Hull
    Title: EVP, CFO & Treasurer

[Signature Page to Registrations Rights Agreement - 12.00% Senior Notes]


CARTUS CORPORATION

CDRE TM LLC

NRT INSURANCE AGENCY, INC.

REALOGY OPERATIONS LLC

REALOGY SERVICES GROUP LLC

REALOGY SERVICES VENTURE PARTNER LLC

SOTHEBY’S INTERNATIONAL REALTY LICENSEE LLC

WREM, INC.

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Chief Financial Officer

[Signature Page to Registrations Rights Agreement - 12.00% Senior Notes]


ASSOCIATES REALTY, INC.

CARTUS ASSET RECOVERY CORPORATION

CARTUS PARTNER CORPORATION

FEDSTATE STRATEGIC CONSULTING,

INCORPORATED

J.W. RIKER – NORTHERN R.I., INC.

LAKECREST TITLE, LLC

NRT PHILADELPHIA LLC

REFERRAL NETWORK LLC

THE CORCORAN GROUP EASTSIDE, INC.

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Executive Vice President & Treasurer

[Signature Page to Registrations Rights Agreement - 12.00% Senior Notes]


AMERICAN TITLE COMPANY OF HOUSTON

ATCOH HOLDING COMPANY

BURNET TITLE LLC

BURNET TITLE HOLDING LLC

BURROW ESCROW SERVICES, INC.

CORNERSTONE TITLE COMPANY

EQUITY TITLE COMPANY

EQUITY TITLE MESSENGER SERVICE HOLDING LLC

FIRST CALIFORNIA ESCROW CORPORATION

FRANCHISE SETTLEMENT SERVICES LLC

GUARDIAN HOLDING COMPANY

GUARDIAN TITLE AGENCY, LLC

GUARDIAN TITLE COMPANY

GULF SOUTH SETTLEMENT SERVICES, LLC

KEYSTONE CLOSING SERVICES LLC

MARKET STREET SETTLEMENT GROUP LLC

MID-ATLANTIC SETTLEMENT SERVICES LLC

NATIONAL COORDINATION ALLIANCE LLC

NRT SETTLEMENT SERVICES OF MISSOURI LLC

NRT SETTLEMENT SERVICES OF TEXAS LLC

PROCESSING SOLUTIONS LLC

SECURED LAND TRANSFERS LLC

ST. JOE TITLE SERVICES LLC

TAW HOLDING INC.

TEXAS AMERICAN TITLE COMPANY

TITLE RESOURCE GROUP AFFILIATES HOLDINGS LLC

TITLE RESOURCE GROUP HOLDINGS LLC

TITLE RESOURCE GROUP LLC

TITLE RESOURCE GROUP SERVICES LLC

TITLE RESOURCES INCORPORATED

TRG SERVICES, ESCROW, INC.

TRG SETTLEMENT SERVICES, LLP

WAYDAN TITLE, INC.

WEST COAST ESCROW COMPANY

By:   /s/ Thomas N. Rispoli
Name:   Thomas N. Rispoli
Title:   Chief Financial Officer

[Signature Page to Registrations Rights Agreement - 12.00% Senior Notes]


BETTER HOMES AND GARDENS REAL ESTATE LLC

BETTER HOMES AND GARDENS REAL ESTATE LICENSEE LLC

CENTURY 21 REAL ESTATE LLC

CGRN, INC.

COLDWELL BANKER LLC

COLDWELL BANKER REAL ESTATE LLC

ERA FRANCHISE SYSTEMS LLC

GLOBAL CLIENT SOLUTIONS LLC

ONCOR INTERNATIONAL LLC

REALOGY FRANCHISE GROUP LLC

REALOGY GLOBAL SERVICES LLC

REALOGY LICENSING LLC

SOTHEBY’S INTERNATIONAL REALTY AFFILIATES LLC

WORLD REAL ESTATE MARKETING LLC

By:   /s/ Andrew G. Napurano
Name:   Andrew G. Napurano
Title:   Chief Financial Officer

[Signature Page to Registrations Rights Agreement - 12.00% Senior Notes]


FSA MEMBERSHIP SERVICES, LLC
By:   /s/ Marilyn J. Wasser
Name:   Marilyn J. Wasser
Title:   Executive Vice President

[Signature Page to Registrations Rights Agreement - 12.00% Senior Notes]


ALPHA REFERRAL NETWORK LLC

ASSOCIATED CLIENT REFERRAL LLC

ASSOCIATES REALTY NETWORK

BURGDORFF LLC

BURGDORFF REFERRAL ASSOCIATES LLC

BURNET REALTY LLC

CAREER DEVELOPMENT CENTER, LLC

COLDWELL BANKER COMMERCIAL PACIFIC PROPERTIES LLC

COLDWELL BANKER PACIFIC PROPERTIES LLC

COLDWELL BANKER REAL ESTATE SERVICES LLC

COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY

COLDWELL BANKER RESIDENTIAL BROKERAGE LLC

COLDWELL BANKER RESIDENTIAL REAL ESTATE LLC

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK, INC.

COLORADO COMMERCIAL, LLC

HOME REFERRAL NETWORK LLC

JACK GAUGHEN LLC

NRT ARIZONA LLC

NRT ARIZONA COMMERCIAL LLC

NRT ARIZONA REFERRAL LLC

NRT COLORADO LLC

NRT COLUMBUS LLC

NRT COMMERCIAL LLC

NRT COMMERCIAL UTAH LLC

NRT DEVELOPMENT ADVISORS LLC

NRT DEVONSHIRE LLC

NRT HAWAII REFERRAL, LLC

NRT LLC

NRT MID-ATLANTIC LLC

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

[Signature Page to Registrations Rights Agreement - 12.00% Senior Notes]


NRT MISSOURI LLC

NRT MISSOURI REFERRAL NETWORK LLC

NRT NEW ENGLAND LLC

NRT NEW YORK LLC

NRT NORTHFORK LLC

NRT PITTSBURGH LLC

NRT REFERRAL NETWORK LLC

NRT RELOCATION LLC

NRT REOEXPERTS LLC

NRT SUNSHINE INC.

NRT TEXAS LLC

NRT UTAH LLC

REAL ESTATE REFERRAL LLC

REAL ESTATE REFERRALS LLC

REAL ESTATE SERVICES LLC

REFERRAL ASSOCIATES OF NEW ENGLAND LLC

REFERRAL NETWORK, LLC

REFERRAL NETWORK PLUS, INC.

SOTHEBY’S INTERNATIONAL REALTY, INC.

SOTHEBY’S INTERNATIONAL REALTY REFERRAL COMPANY, LLC

THE SUNSHINE GROUP (FLORIDA) LTD. CORP.

THE SUNSHINE GROUP, LTD.

VALLEY OF CALIFORNIA, INC.

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

[Signature Page to Registrations Rights Agreement - 12.00% Senior Notes]


The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written:

 

J.P. MORGAN SECURITIES LLC
By:   /s/ David A. Dwyer
  Name: David A. Dwyer
  Title: Executive Director
CREDIT SUISSE SECURITIES (USA) LLC
By:   /s/ Malcolm Price
  Name: Malcolm Price
  Title: Managing Director
GOLDMAN, SACHS & CO.
By:   /s/ Goldman Sachs & Co.
  (Goldman, Sachs & Co.)

[Signature Page to Registrations Rights Agreement - 12.00% Senior Notes]


Schedule A

Guarantors

Associates Realty, Inc.

Associates Realty Network

Burrow Escrow Services, Inc.

Coldwell Banker Real Estate LLC

Coldwell Banker Residential Brokerage Company

Coldwell Banker Residential Real Estate LLC

Coldwell Banker Residential Referral Network

Cornerstone Title Company

Equity Title Company

Guardian Title Company

National Coordination Alliance LLC

Realogy Operations LLC

Referral Network Plus, Inc.

Valley of California, Inc.

West Coast Escrow Company

Colorado Commercial, LLC

Guardian Title Agency, LLC

NRT Colorado LLC

Referral Network, LLC

Associated Client Referral LLC

Better Homes and Gardens Real Estate Licensee LLC

Better Homes and Gardens Real Estate LLC

Burgdorff LLC

Burgdorff Referral Associates LLC

Career Development Center, LLC

Cartus Asset Recovery Corporation

Cartus Corporation

Cartus Partner Corporation

CDRE TM LLC

Century 21 Real Estate LLC

CGRN, Inc.

Coldwell Banker LLC

Coldwell Banker Real Estate Services LLC

Coldwell Banker Residential Brokerage LLC

Equity Title Messenger Service Holding LLC

ERA Franchise Systems LLC

FedState Strategic Consulting, Incorporated

First California Escrow Corporation

Franchise Settlement Services LLC

FSA Membership Services, LLC

Global Client Solutions LLC

Guardian Holding Company

Gulf South Settlement Services, LLC


Jack Gaughen LLC

Keystone Closing Services LLC

NRT Arizona Commercial LLC

NRT Arizona LLC

NRT Arizona Referral LLC

NRT Columbus LLC

NRT Commercial LLC

NRT Commercial Utah LLC

NRT Development Advisors LLC

NRT Devonshire LLC

NRT Hawaii Referral, LLC

NRT LLC

NRT Mid-Atlantic LLC

NRT Missouri LLC

NRT Missouri Referral Network LLC

NRT New England LLC

NRT New York LLC

NRT Northfork LLC

NRT Philadelphia LLC

NRT Pittsburgh LLC

NRT Referral Network LLC

NRT Relocation LLC

NRT REOExperts LLC

NRT Settlement Services of Missouri LLC

NRT Settlement Services of Texas LLC

NRT Sunshine Inc.

NRT Utah LLC

ONCOR International LLC

Real Estate Referral LLC

Real Estate Referrals LLC

Real Estate Services LLC

Realogy Franchise Group LLC

Realogy Global Services LLC

Realogy Licensing LLC

Realogy Services Group LLC

Realogy Services Venture Partner LLC

Secured Land Transfers LLC

Sotheby’s International Realty Affiliates LLC

Sotheby’s International Realty Licensee LLC

Sotheby’s International Realty Referral Company, LLC

Title Resource Group Affiliates Holdings LLC

Title Resource Group Holdings LLC

Title Resource Group LLC

Title Resource Group Services LLC

Title Resources Incorporated

TRG Services, Escrow, Inc.


World Real Estate Marketing LLC

WREM, Inc.

Referral Network LLC

St. Joe Title Services LLC

The Sunshine Group (Florida) Ltd. Corp.

Coldwell Banker Commercial Pacific Properties LLC

Coldwell Banker Pacific Properties LLC

NRT Insurance Agency, Inc.

Referral Associates of New England LLC

Mid-Atlantic Settlement Services LLC

Sotheby’s International Realty, Inc.

Burnet Realty LLC

Burnet Title LLC

Burnet Title Holding LLC

Home Referral Network LLC

Market Street Settlement Group LLC

The Corcoran Group Eastside, Inc.

The Sunshine Group, Ltd.

Coldwell Banker Residential Referral Network, Inc.

TRG Settlement Services, LLP

J. W. Riker – Northern R.I., Inc.

Lakecrest Title, LLC

Alpha Referral Network

LLC

American Title Company of Houston

ATCOH Holding Company

NRT Texas LLC

Processing Solutions LLC

TAW Holding Inc.

Texas American Title Company

Waydan Title, Inc.

Exhibit 4.68

13.375% Senior Subordinated Notes due 2018

REGISTRATION RIGHTS AGREEMENT

by and among

Realogy Corporation

Domus Holdings Corp.

the subsidiaries of Realogy Corporation parties hereto

and

J.P. Morgan Securities LLC

Credit Suisse Securities (USA) LLC

Goldman, Sachs & Co.

Dated as of January 5, 2011


REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “ Agreement ”) is made and entered into as of January 5, 2011, by and among Realogy Corporation, a Delaware corporation (the “ Company ”), Domus Holdings Corp., a Delaware corporation and the indirect parent of the Company (“ Holdings ”), the subsidiaries of the Company listed on Schedule A hereto (collectively, together with Holdings, the “ Guarantors ”), J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC. and Goldman, Sachs & Co. (each a “ Dealer Manager ” and, collectively, the “ Dealer Managers ”), each of whom has agreed to act as a dealer manager pursuant to the Dealer Manager Agreement (as defined below) with respect to the Company’s offer to exchange (the “ Senior Notes Exchange Offer ”) its 13.375% Senior Notes due 2017 (the “ Initial Notes ”) issued by the Company and fully and unconditionally guaranteed by the Guarantors (the “ Guarantees ”) for certain of its 12.375% Senior Subordinated Notes due 2015 (the “ Outstanding Securities”) and the Company’s concurrent solicitation of consents to amend the indenture pursuant to which the Outstanding Securities were issued (the “ Solicitations ”). The Initial Notes and the Guarantees thereof are herein collectively referred to as the “ Initial Securities ”.

This Agreement is made pursuant to the Dealer Manager Agreement, dated November 30, 2010 (the “ Dealer Manager Agreement ”), among the Company, the Guarantors and the Dealer Managers for the benefit of the holders from time to time of the Initial Securities. In connection with the Dealer Manager Agreement and the Senior Notes Exchange Offer, the Company and the Guarantors have agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Dealer Managers set forth in Section 6(h) of the Dealer Manager Agreement.

The parties hereby agree as follows:

S ECTION  1. Definitions . As used in this Agreement, the following capitalized terms shall have the following meanings:

Additional Interest: Any additional interest payable with respect to the Transfer Restricted Securities due to an increase in interest rate pursuant to Section 5 hereof.

Advice: As defined in Section 6 hereof.

Agreement: As defined in the preamble hereto.

Broker-Dealer: Any broker or dealer registered under the Exchange Act.

Business Day: Any day other than a Saturday, Sunday or U.S. federal holiday or a day on which banking institutions or trust companies located in New York, New York are authorized or obligated to be closed.

Closing Date: The date of this Agreement.

Commission: The Securities and Exchange Commission.

Company: As defined in the preamble hereto.


Consummate: A registered Exchange Offer shall be deemed “Consummated” for purposes of this Agreement upon the occurrence of (i) the filing and effectiveness under the Securities Act of the Exchange Offer Registration Statement relating to the Exchange Securities to be issued in the Exchange Offer, (ii) the maintenance of such Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the minimum period required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company to the registrar under the Indenture of Exchange Securities in the same aggregate principal amount as the aggregate principal amount of Initial Securities that were tendered by Holders thereof pursuant to the Exchange Offer.

Dealer Manager Agreement: As defined in the preamble hereto.

Dealer Managers: As defined in the preamble hereto.

Delay Period: As defined in Section 6 hereof.

Exchange Act: The Securities Exchange Act of 1934, as amended.

Exchange Offer: The registration by the Company and the Guarantors under the Securities Act of the Exchange Securities pursuant to a Registration Statement pursuant to which the Company offers the Holders of all outstanding Transfer Restricted Securities the opportunity to exchange all such outstanding Transfer Restricted Securities held by such Holders for Exchange Securities in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Securities tendered in such exchange offer by such Holders.

Exchange Offer Registration Statement: The Registration Statement relating to the Exchange Offer, including the related Prospectus.

Exchange Securities: The 13.375% Senior Subordinated Notes due 2018 of the same series under the Indenture as the Initial Notes and the Guarantees thereof, to be issued to Holders in exchange for Transfer Restricted Securities pursuant to this Agreement.

FINRA: The Financial Industry Regulatory Authority, Inc.

Free Writing Prospectus: Any free writing prospectus, as such term is defined in Rule 405 under the Securities Act, relating to any portion of the Securities.

Guarantees: As defined in the preamble hereto.

Guarantors: As defined in the preamble hereto.

Holders: As defined in Section 2(b) hereof.

Holdings: As defined in the preamble hereto.

Indemnified Holder: As defined in Section 8(a) hereof.

 

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Indenture: The Indenture dated as of January 5, 2011, by and among the Company, the Guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee (the “ Trustee ”), pursuant to which the Initial Securities and the Exchange Securities are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof.

Initial Notes: As defined in the preamble hereto.

Initial Securities: As defined in the preamble hereto.

Other Notes: the Company’s $491,824,000 aggregate principal amount of 11.50% Senior Notes due 2017 and $129,579,298 aggregate principal amount of 12.00% Senior Notes due 2017.

Outstanding Securities: As defined in the preamble hereto.

Person: An individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.

Prospectus: The prospectus included in a Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus.

Registration Default: As defined in Section 5 hereof.

Registration Statement: Any registration statement of the Company and the Guarantors relating to (a) an offering of Exchange Securities pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to a Shelf Registration Statement, which is filed pursuant to the provisions of this Agreement, in each case, including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein.

Securities: The Exchange Securities and/or any Transfer Restricted Securities registered pursuant to a Shelf Registration Statement.

Securities Act: The Securities Act of 1933, as amended.

Senior Notes Exchange Offer : As defined in the preamble hereto.

Shelf Registration Statement: As defined in Section 4(a) hereof.

Solicitations: As defined in the preamble hereto.

10-K Filing Date: As defined in Section 3(a) hereof.

Transfer Restricted Securities: Each Initial Security, until the earliest to occur of (a) the date on which such Initial Security is exchanged in the Exchange Offer for an Exchange Security entitled to be resold to the public by the Holder thereof without complying with the prospectus delivery requirements of the Securities Act, (b) the date on which such Initial Security has been effectively registered under the Securities Act and disposed of in accordance with a Shelf

 

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Registration Statement and (c) the date on which such securities cease to be outstanding (whether as a result of a repurchase, cancellation or otherwise).

Trust Indenture Act: The Trust Indenture Act of 1939, as amended.

Trustee: As defined in the definition of Indenture above.

Underwritten Registration or Underwritten Offering: A registration in which securities of the Company are sold to an underwriter for reoffering to the public.

S ECTION  2. Securities Subject to this Agreement.

(a) Transfer Restricted Securities. The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities.

(b) Holders of Transfer Restricted Securities. A Person is deemed to be a holder of Transfer Restricted Securities (each, a “ Holder ”) whenever such Person owns Transfer Restricted Securities.

S ECTION  3. Registered Exchange Offer.

(a) Unless the Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) hereof have been complied with), each of the Company and the Guarantors shall (i) file a Registration Statement filed under the Securities Act relating to the Exchange Securities and the Exchange Offer with the Commission on or prior to 15 days after the date that the Company would be obligated to file its Form 10-K for the year ended December 31, 2010 with the Commission if the Company were a non-accelerated filer subject to Sections 13 or 15(d) of the Exchange Act (the “ 10-K Filing Date ”), (ii) cause such Registration Statement to become effective as promptly as possible (unless it becomes effective automatically upon filing), but in no event later than 120 days after the 10-K Filing Date (or if such 120th day is not a Business Day, the next succeeding Business Day) and (iii) in connection with the foregoing, (A) file all pre-effective amendments to such Registration Statement as may be necessary in order to cause such Registration Statement to become effective, (B) file, if applicable, a post-effective amendment to such Registration Statement pursuant to Rule 430B under the Securities Act and (C) cause all necessary filings in connection with the registration and qualification of the Exchange Securities to be made under the state securities or blue sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer, and (iv) upon the effectiveness of such Registration Statement, commence the Exchange Offer. The Exchange Offer shall be on the appropriate form permitting registration of the Exchange Securities to be offered in exchange for the Transfer Restricted Securities and to permit resales of Initial Securities held by Broker-Dealers as contemplated by Section 3(c) hereof.

(b) The Company and the Guarantors shall cause the Exchange Offer Registration Statement to be effective continuously and shall keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however , that in no event shall such period be less than 30 days after the date notice of the Exchange Offer is mailed to the Holders. The Company

 

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shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Exchange Securities and the exchange securities to be issued to holders in exchange for Other Notes, pursuant to registration rights agreements dated the date hereof shall be included in the Exchange Offer Registration Statement. The Company shall cause the Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in no event later than 30 Business Days after the date notice of the Exchange Offer is required to be mailed to the Holders.

(c) The Company shall indicate in a “Plan of Distribution” section contained in the Prospectus forming a part of the Exchange Offer Registration Statement that any Broker-Dealer who holds Initial Securities that are Transfer Restricted Securities and that were acquired for its own account as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Company) may exchange such Initial Securities pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter” within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the Exchange Securities received by such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer Registration Statement. Such “Plan of Distribution” section shall also contain all other information with respect to such resales by Broker-Dealers that the Commission may require in order to permit such resales pursuant thereto, but such “Plan of Distribution” shall not name any such Broker-Dealer or disclose the amount of Initial Securities held by any such Broker-Dealer except to the extent required by the Commission.

Each of the Company and the Guarantors shall keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 6(c) hereof to the extent necessary to ensure that it is available for resales of Initial Securities acquired by Broker-Dealers for their own accounts as a result of market-making activities or other trading activities, and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period ending on the earlier of (i) 180 days from the date on which the Exchange Offer Registration Statement is declared effective and (ii) the date on which a Broker-Dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities.

The Company shall provide sufficient copies of the latest version of such Prospectus to Broker-Dealers promptly upon request at any time during such 180-day (or shorter as provided in the foregoing sentence) period in order to facilitate such resales.

S ECTION  4. Shelf Registration.

(a) Shelf Registration. If (i) the Company and the Guarantors are not required to file the Exchange Offer Registration Statement or to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a) hereof have been complied with), (ii) for any reason the Exchange Offer is not Consummated within 30 Business Days after the date notice of the Exchange Offer is required to be mailed to the Holders or (iii) with respect to any Holder of Transfer Restricted

 

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Securities (A) such Holder is prohibited by applicable law or Commission policy from participating in the Exchange Offer, or (B) such Holder may not resell the Exchange Securities acquired by it in the Exchange Offer to the public without delivering a prospectus (other than by reason of such Holder’s status as an affiliate of the Company) and the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder, or (C) such Holder is a Broker-Dealer and holds Initial Securities acquired directly from the Company or one of its affiliates, then, upon such Holder’s request prior to the 20th day following consummation of the Exchange Offer, the Company and the Guarantors shall:

(x) cause to be filed a shelf registration statement pursuant to Rule 415 under the Securities Act, which may be an amendment to the Exchange Offer Registration Statement (in either event, the “ Shelf Registration Statement ”) as soon as practicable but in any event on or prior to the later of (x) 90 days after such filing obligation arises (or if such 90th day is not a Business Day, the next succeeding Business Day) and (y) 15 days after the 10-K Filing Date (or if such 15th day is not a Business Day, the next succeeding Business Day), which Shelf Registration Statement shall provide for resales of all Transfer Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof (but shall not include any other securities unless approved by a majority of the Holders whose Transfer Restricted Securities are to be covered by such Shelf Registration Statement); and

(y) cause such Shelf Registration Statement to be declared effective by the Commission as promptly as possible (unless it becomes effective automatically upon filing), and in any event on or prior to the later of (x) 120 days after the 10-K Filing Date (or if such 120th day is not a Business Day, the next succeeding Business Day) and (y) 180 days after such obligation to file such Shelf Registration Statement arises (or if such 180th day is not a Business Day, the next succeeding Business Day).

Each of the Company and the Guarantors shall keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for resales of Initial Securities by the Holders of Transfer Restricted Securities entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of at least two years following the effective date of such Shelf Registration Statement (or shorter period that will terminate when all the Initial Securities covered by such Shelf Registration Statement have been sold pursuant to such Shelf Registration Statement). During the period during which the Company and the Guarantors are required to maintain an effective Shelf Registration Statement pursuant to this Agreement, the Company and the Guarantors will, prior to the expiration of that Shelf Registration Statement, file, cause to be declared effective (unless it becomes effective automatically upon filing) within a period that avoids any interruption in the ability of Holders of Securities covered by the expiring Shelf Registration Statement to make registered dispositions, a new registration statement relating to the Securities, which shall be deemed the “Shelf Registration Statement” for purposes of this Agreement.

(b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its

 

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Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 20 Business Days after receipt of a request therefor, such information as the Company may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein or amendment or supplement thereto or Free Writing Prospectus. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.

S ECTION  5. Additional Interest . If (i) any of the Registration Statements required by this Agreement has not been filed within 15 days after the 10-K Filing Date, (ii) any of the Registration Statements required by this Agreement has not been declared effective by the Commission (or become automatically effective) within 120 days after the 10-K Filing Date, (iii) the Exchange Offer has not been Consummated within 160 days after the 10-K Filing Date with respect to the Exchange Offer Registration Statement or (iv) any Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded immediately by a post-effective amendment to such Registration Statement that cures such failure and that is itself immediately declared or automatically becomes effective (except in the case of a Registration Statement that ceases to be effective or usable as specifically permitted by the last paragraph of Section 6 hereof) (each such event referred to in clauses (i) through (iv), a “ Registration Default ”), the Company hereby agrees that the interest rate borne by the Transfer Restricted Securities shall be increased by 0.25% per annum during the 90-day period immediately following the occurrence of any Registration Default and shall increase by 0.25% per annum at the end of each subsequent 90-day period, but in no event shall such increase exceed 1.00% per annum. Following the earliest of (x) the cure of all Registration Defaults relating to any particular Transfer Restricted Securities, (y) the date on which such Transfer Restricted Security ceases to be a Transfer Restricted Security and (z) the date that is two years after the Closing Date, the interest rate borne by the relevant Transfer Restricted Securities will be reduced to the original interest rate borne by such Transfer Restricted Securities and the accrual of Additional Interest will cease with respect to such Transfer Restricted Security; provided, however, that if, after any such reduction in interest rate, a different Registration Default occurs, the interest rate borne by the relevant Transfer Restricted Securities shall again be increased pursuant to the foregoing provisions. All accrued Additional Interest will be paid by the Company and the Guarantors on each interest payment date to the Holder in the same manner as interest is paid under the Indenture.

Notwithstanding the foregoing, (i) the amount of Additional Interest payable shall not increase because more than one Registration Default has occurred and is pending and (ii) a Holder of Transfer Restricted Securities that is not entitled to the benefits of the Shelf Registration Statement (because, e.g. , such Holder has not elected to include information or has not timely delivered such information to the Company pursuant to Section 4(b) hereof) shall not be entitled to Additional Interest with respect to a Registration Default that pertains to the Shelf Registration Statement.

All obligations of the Company and the Guarantors set forth in the first paragraph of this Section 5 that are outstanding with respect to any Transfer Restricted Security at the time such

 

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security ceases to be a Transfer Restricted Security shall survive until such time as all such obligations with respect to such security shall have been satisfied in full.

S ECTION  6. Registration Procedures.

(a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Company and the Guarantors shall comply with all of the provisions of Section 6(c) hereof, shall effect such exchange to permit the sale of Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and shall comply with all of the following provisions:

(i) If in the reasonable opinion of counsel to the Company there is a question as to whether the Exchange Offer is permitted by applicable law, each of the Company and the Guarantors hereby agrees to seek a favorable decision from the Commission allowing the Company and the Guarantors to Consummate an Exchange Offer for such Initial Securities. Each of the Company and the Guarantors hereby agrees to pursue the issuance of such a decision to the Commission staff level but shall not be required to take commercially unreasonable action to effect a change of Commission policy. Each of the Company and the Guarantors hereby agrees, however, to (A) participate in telephonic conferences with the Commission, (B) deliver to the Commission staff an analysis prepared by counsel to the Company setting forth the legal bases, if any, upon which such counsel has concluded that such an Exchange Offer should be permitted and (C) diligently pursue a favorable resolution by the Commission staff of such submission.

(ii) As a condition to its participation in the Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted Securities shall furnish, upon the request of the Company, prior to the Consummation thereof, a written representation to the Company (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an affiliate of the Company, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any Person to participate in, a distribution of the Exchange Securities to be issued in the Exchange Offer and (C) it is acquiring the Exchange Securities in its ordinary course of business. In addition, all such Holders of Transfer Restricted Securities shall otherwise cooperate in the Company’s preparations for the Exchange Offer. Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Exchange Offer to participate in a distribution of the securities to be acquired in the Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (which may include any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and that such a secondary resale transaction should be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K

 

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if the resales are of Exchange Securities obtained by such Holder in exchange for Initial Securities acquired by such Holder directly from the Company.

(b) Shelf Registration Statement. In connection with the Shelf Registration Statement, each of the Company and the Guarantors shall comply with all the provisions of Section 6(c) hereof and shall effect such registration (unless automatically declared effective) to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and pursuant thereto each of the Company and the Guarantors will as expeditiously as is commercially reasonable prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Securities Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof.

(c) General Provisions. In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities and any Free Writing Prospectus (including, without limitation, any Registration Statement and the related Prospectus required to permit resales of Initial Securities by Broker-Dealers and any Free Writing Prospectus related thereto), each of the Company and the Guarantors shall:

(i) use its commercially reasonable efforts to keep such Registration Statement continuously effective during the period required by this Agreement and provide all requisite financial statements (including, if required by the Securities Act or any regulation thereunder, financial statements of the Guarantors for the period specified in Section 3 or 4 hereof, as applicable); upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Company shall file promptly an appropriate amendment to such Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B) use its commercially reasonable efforts to cause such amendment to be declared effective (unless automatically declared effective) and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter;

(ii) prepare and file with the Commission such amendments and post-effective amendments to the applicable Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, as applicable, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424, 430A and 430B under the Securities Act in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by

 

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the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;

(iii) advise the underwriter(s), if any, and selling Holders promptly and, if requested by such Persons, to confirm such advice in writing, (A) when the Prospectus, any Prospectus supplement, any post-effective amendment or any Free Writing Prospectus has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Securities Act, of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, of the issuance by the Commission of a notification of objection to the use of the form on which the Registration Statement has been filed, or of the happening of any event that causes the Company to become an “ineligible issuer,” as defined in Rule 405 under the Securities Act and (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement or a notification of objection to the use of the form on which the Registration Statement has been filed or if any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or blue sky laws, each of the Company and the Guarantors shall use its commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest practicable time;

(iv) (A) furnish without charge to each of the Dealer Managers, each selling Holder named in any Registration Statement that has requested such copies, if any, and each of the underwriter(s), if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which documents will be subject to the review and comment of such requesting Holders and underwriter(s) in connection with such sale, if any, for a period of at least five Business Days, and the Company will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference) to which a Dealer Manager of Transfer Restricted Securities covered by such Registration Statement or the underwriter(s), if any, shall reasonably object in writing within five Business Days after the receipt thereof (such objection to be deemed timely made upon confirmation of telecopy transmission within such period). The objection of a Dealer Manager or underwriter, if any, shall be deemed to be reasonable if such Registration Statement,

 

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amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission;

(B) furnish without charge to each of the Dealer Managers before filing with the Commission, a copy of any Free Writing Prospectus, which will be subject to the consent of the Dealer Managers, and the Company will not file any such Free Writing Prospectus to which the Dealer Managers of Transfer Restricted Securities covered by such Registration Statement have not consented (such consent not to be unreasonably withheld, conditioned or delayed);

(v) promptly prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to the Dealer Managers, each selling Holder named in any Registration Statement that has requested such documents, if any, and to the underwriter(s), if any, make the Company’s and the Guarantors’ representatives available for discussion of such document and other customary due diligence matters, subject to customary confidentiality agreements, and include such information in such document prior to the filing thereof as such selling Holders or underwriter(s), if any, reasonably may request;

(vi) make available, subject to customary confidentiality agreements, at reasonable times for inspection by the Dealer Managers, the managing underwriter(s), if any, participating in any disposition pursuant to such Registration Statement and any attorney or accountant retained by such Dealer Managers or any of the underwriter(s), all financial and other records, pertinent corporate documents and properties of each of the Company and the Guarantors, and cause the Company’s and the Guarantors’ officers, directors and employees to supply all information, in each case as shall be reasonably necessary to enable any such Holder, underwriter, attorney or accountant to exercise any applicable responsibilities in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness and to participate in meetings with investors to the extent reasonably requested by the managing underwriter(s), if any;

(vii) if requested by any selling Holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the “Plan of Distribution” of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

(viii) cause the Transfer Restricted Securities covered by the Registration Statement to be rated with the appropriate rating agencies, if so requested by the Holders

 

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of a majority in aggregate principal amount of Securities covered thereby or the underwriter(s), if any;

(ix) furnish to each Dealer Manager, each selling Holder and each of the underwriter(s), if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including financial statements and schedules, all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference);

(x) deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; each of the Company and the Guarantors hereby consents to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto;

(xi) enter into such agreements (including an underwriting agreement), and make such representations and warranties, and take all such other commercially reasonable actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Shelf Registration Statement contemplated by this Agreement, all to such extent as may be reasonably requested by any Dealer Manager or by any Holder of Transfer Restricted Securities or underwriter in connection with any sale or resale pursuant to any Shelf Registration Statement contemplated by this Agreement; and whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, each of the Company and the Guarantors shall:

(A) furnish to each Dealer Manager, each selling Holder and each underwriter, if any, in such substance and scope as they may reasonably request and as are customarily made by issuers to underwriters in primary underwritten offerings, upon the date of the effectiveness of the Shelf Registration Statement:

(1) a certificate, dated the date of effectiveness of the Shelf Registration Statement, as the case may be, signed by (y) in the case of the Company, the President or any Vice President and a principal financial or accounting officer and (z) in the case of the Guarantors, the President or any Vice President, in each case, confirming, as of the date thereof, the matters set forth in Section 6(e) of the Dealer Manager Agreement and such other matters as such parties may reasonably request;

(2) if requested by a majority of selling Holders, an opinion, dated the date of effectiveness of the Shelf Registration Statement, as the case may be, of (i) counsel for the Company and the Guarantors, covering the matters set forth in the opinion delivered pursuant to Section 6(c) of the Dealer Manager Agreement and (ii) the General Counsel of the Company and the Guarantors, covering matters set forth in the opinion delivered

 

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pursuant to Section 6(c) of the Dealer Manager Agreement and such other matters customarily covered in opinions requested in similar offerings, and in each case, including a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Company and the Guarantors, representatives of the independent public accountants for the Company and the Guarantors, representatives of the underwriter(s), if any, and counsel to the underwriter(s), if any, in connection with the preparation of such Registration Statement and the related Prospectus and have considered the matters required to be stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing, no facts came to such counsel’s attention that caused such counsel to believe that the applicable Shelf Registration Statement, (A) at the date of the opinion and at the time such Shelf Registration Statement or any post-effective amendment thereto became effective and (B) at the applicable time identified by such Holders or managing underwriters, in the case of (A) and (B) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus contained in such Shelf Registration Statement as of its date contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein not misleading. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial or statistical data included in any Shelf Registration Statement contemplated by this Agreement or the related Prospectus, and such opinions may be further subject to assumptions and qualifications substantially similar to those set forth in the opinions delivered pursuant to Sections 6(c) of the Dealer Manager Agreement; and

(3) a customary comfort letter, dated the date of effectiveness of the Shelf Registration Statement, from the Company’s independent accountants, in the customary form and covering matters of the type customarily requested to be covered in comfort letters by underwriters in connection with primary underwritten offerings, and covering or affirming the matters set forth in the comfort letter delivered pursuant to Section 6(d) of the Dealer Manager Agreement, without exception;

(B) set forth in full or incorporate by reference in the underwriting agreement, if any, the indemnification provisions and procedures of Section 8 hereof with respect to all parties to be indemnified pursuant to said Section; and

(C) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with Section 6(c)(xi)(A) hereof and with any customary conditions contained in the underwriting agreement or

 

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other agreement entered into by the Company or any of the Guarantors pursuant to this Section 6(c)(xi), if any.

If at any time the representations and warranties of the Company and the Guarantors contemplated in Section 6(c)(xi)(A)(1) hereof cease to be true and correct, the Company or the Guarantors shall so advise the Dealer Managers and the underwriter(s), if any, and each selling Holder promptly and, if requested by such Persons, shall confirm such advice in writing;

(xii) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Securities under the state securities or blue sky laws of such jurisdictions as the selling Holders or underwriter(s), if any, may request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the Shelf Registration Statement; provided, however , that none of the Company or the Guarantors shall be required to register or qualify as a foreign corporation where it is not then so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not then so subject;

(xiii) issue, upon the request of any Holder of Initial Securities covered by the Shelf Registration Statement, Exchange Securities having an aggregate principal amount equal to the aggregate principal amount of Initial Securities surrendered to the Company by such Holder in exchange therefor or being sold by such Holder, such Exchange Securities to be registered in the name of such Holder or in the name of the purchaser(s) of such Securities, as the case may be; in return, the Initial Securities held by such Holder shall be surrendered to the Company for cancellation;

(xiv) subject to the terms of the Indenture, cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Securities to be in such denominations and registered in such names as the Holders or the underwriter(s), if any, may request at least two Business Days prior to any sale of Transfer Restricted Securities made by such Holders or underwriter(s);

(xv) use its commercially reasonable efforts to cause the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in Section 6(c)(xii) hereof;

(xvi) if any fact or event contemplated by Section 6(c)(iii)(D) hereof shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file

 

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any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading;

(xvii) provide a CUSIP number for all Securities not later than the effective date of the Registration Statement covering such Securities and provide the Trustee under the applicable Indenture with printed certificates for such Securities which are in a form eligible for deposit with The Depository Trust Company and take all other action necessary to ensure that all such Securities are eligible for deposit with The Depository Trust Company;

(xviii) cooperate and assist in any filings required to be made with FINRA and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter”) that is required to be retained in accordance with the rules and regulations of FINRA;

(xix) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders, as soon as practicable, a consolidated earning statement meeting the requirements of Rule 158 (which need not be audited) for the twelve-month period (A) commencing at the end of any fiscal quarter in which Transfer Restricted Securities are sold to underwriters in a firm commitment or best efforts Underwritten Offering or (B) if not sold to underwriters in such an offering, beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the Registration Statement;

(xx) cause the Indenture to be qualified under the Trust Indenture Act not later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate with the Trustee and the Holders of Securities to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and to execute, and to use its commercially reasonable efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; and

(xxi) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act.

Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of any notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof, or until it is advised in writing (the “ Advice ”) by the Company that the use of the Prospectus may

 

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be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Company, each Holder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of such notice. In the event the Company shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by the number of days (a “ Delay Period ”) during the period from and including the date of the giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or shall have received the Advice; provided that there shall not be more than 75 days of Delay Periods during any 12-month period; provided further, however, that (except as provided in Section 5(iv) hereof) no such extension shall be taken into account in determining whether Additional Interest is due pursuant to Section 5 hereof or the amount of such Additional Interest, it being agreed that the Company’s option to suspend use of a Registration Statement pursuant to this paragraph shall be treated as a Registration Default for purposes of Section 5 hereof.

S ECTION  7. Registration Expenses.

(a) All expenses incident to the Company’s and the Guarantors’ performance of or compliance with this Agreement will be borne by the Company and the Guarantors, jointly and severally, regardless of whether a Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees and expenses (including filings made by any of the Dealer Managers or any Holder with FINRA (and, if applicable, the fees and expenses of any “qualified independent underwriter”, and one counsel to such person, that may be required by the rules and regulations of FINRA)); (ii) all fees and expenses of compliance with federal securities and state securities or blue sky laws (including the reasonable fees and disbursements of one counsel to the Holders of Transfer Restricted Securities); (iii) all expenses of printing (including printing certificates for the Exchange Securities to be issued in the Exchange Offer and printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Company, the Guarantors and, subject to Section 7(b) hereof, one counsel to the Holders of Transfer Restricted Securities; (v) all application and filing fees in connection with listing the Exchange Securities on a securities exchange or automated quotation system pursuant to the requirements thereof, if required to so list; and (vi) all fees and disbursements of independent certified public accountants of the Company and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance).

Each of the Company and the Guarantors will, in any event, bear its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company or the Guarantors.

(b) In connection with any Registration Statement required by this Agreement (including, without limitation, the Exchange Offer Registration Statement and the Shelf Registration Statement), the Company and the Guarantors, jointly and severally, will reimburse the Dealer Managers and the Holders of Transfer Restricted Securities being tendered in the

 

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Exchange Offer and/or resold pursuant to the “Plan of Distribution” contained in the Exchange Offer Registration Statement or registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Simpson Thacher & Bartlett LLP or such other counsel as may be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared.

S ECTION  8. Indemnification.

(a) The Company and the Guarantors, jointly and severally, agree to indemnify and hold harmless (i) each Holder and (ii) each Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any Holder (any of the Persons referred to in this clause (ii) being hereinafter referred to as a “ controlling person ”) and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or any controlling person (any Person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an “ Indemnified Holder ”), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including, without limitation, and as incurred, reimbursement of all reasonable costs of investigating, preparing, pursuing, settling, compromising, paying or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of counsel to any Indemnified Holder), joint or several, directly or indirectly caused by, related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus (or any amendment or supplement thereto) or Free Writing Prospectus, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses are caused by an untrue statement or omission or alleged untrue statement or omission that is made in reliance upon and in conformity with information relating to any of the Holders furnished in writing to the Company by any of the Holders expressly for use therein. This indemnity agreement shall be in addition to any liability that the Company or any of the Guarantors may otherwise have.

In case any action or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought or asserted against any of the Indemnified Holders with respect to which indemnity may be sought against the Company or the Guarantors, such Indemnified Holder shall promptly notify the Company and the Guarantors in writing; provided, however, that the failure to give such notice shall not relieve any of the Company or the Guarantors of its obligations pursuant to this Agreement. Such Indemnified Holder shall have the right to employ its own counsel in any such action and the fees and expenses of such counsel shall be paid, as incurred, by the Company and the Guarantors (regardless of whether it is ultimately determined that an Indemnified Holder is not entitled to indemnification hereunder). The Company and the Guarantors shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for such Indemnified Holders, which firm shall be designated by the Holders. The Company and the Guarantors shall be liable for any settlement of any such action or proceeding effected with the

 

18


Company’s and the Guarantors’ prior written consent, which consent shall not be withheld unreasonably, and each of the Company and the Guarantors agrees to indemnify and hold harmless any Indemnified Holder from and against any loss, claim, damage, liability or expense by reason of any settlement of any action effected with the written consent of the Company and the Guarantors. The Company and the Guarantors shall not, without the prior written consent of each Indemnified Holder, settle or compromise or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any Indemnified Holder is a party thereto), unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Holder from all liability arising out of such action, claim, litigation or proceeding, and does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Holder.

(b) Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless the Company, the Guarantors and their respective directors, officers of the Company and the Guarantors who sign a Registration Statement, and any Person controlling (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Company or any of the Guarantors, and the respective officers, directors, partners, employees, representatives and agents of each such Person, to the same extent as the foregoing indemnity from the Company and the Guarantors to each of the Indemnified Holders, but only with respect to claims and actions based on information relating to such Holder furnished in writing by such Holder expressly for use in any Registration Statement. In case any action or proceeding shall be brought against the Company, the Guarantors or their respective directors or officers or any such controlling person in respect of which indemnity may be sought against a Holder of Transfer Restricted Securities, such Holder shall have the rights and duties given the Company and the Guarantors, and the Company, the Guarantors, their respective directors and officers and such controlling person shall have the rights and duties given to each Holder by the preceding paragraph.

(c) If the indemnification provided for in this Section 8 is unavailable to an indemnified party under Section 8(a) or (b) hereof (other than by reason of exceptions provided in those Sections) in respect of any losses, claims, damages, liabilities, judgments, actions or expenses referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one hand, and the Holders, on the other hand, from the Senior Notes Exchange Offer and Solicitations and the transactions contemplated thereby (which in the case of the Company and the Guarantors shall be deemed to be equal to the principal amount of the Initial Notes), the amount of Additional Interest which did not become payable as a result of the filing of the Registration Statement resulting in such losses, claims, damages, liabilities, judgments, actions or expenses, and such Registration Statement, or if such allocation is not permitted by applicable law, the relative fault of the Company and the Guarantors, on the one hand, and the Holders, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Company and the Guarantors, on the one hand, and of the Indemnified Holder on the other

 

19


shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or any of the Guarantors, on the one hand, or the Indemnified Holders, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 8(a) hereof, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.

The Company, the Guarantors and each Holder of Transfer Restricted Securities agree that it would not be just and equitable if contribution pursuant to this Section 8(c) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, none of the Holders (and its related Indemnified Holders) shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total price received with respect to the sale of the Initial Securities or Exchange Securities exceeds the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 8(c) are several in proportion to the respective principal amount of Initial Securities held by each of the Holders hereunder and not joint.

S ECTION  9. Rule 144A. Each of the Company and the Guarantors hereby agrees with each Holder, for so long as any Transfer Restricted Securities remain outstanding, to make available to any Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A under the Securities Act.

S ECTION  10. Participation in Underwritten Registrations. No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder’s Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements.

S ECTION  11. Selection of Underwriters. The Holders of Transfer Restricted Securities covered by the Shelf Registration Statement who desire to do so may sell such Transfer

 

20


Restricted Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker(s) and managing underwriter(s) that will administer such offering will be selected by the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering; provided, however , that such investment banker(s) and managing underwriter(s) must be reasonably satisfactory to the Company.

S ECTION  12. Miscellaneous.

(a) Remedies. Each of the Company and the Guarantors hereby agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate.

(b) No Inconsistent Agreements. Each of the Company and the Guarantors will not on or after the date of this Agreement enter into any agreement with respect to its securities that conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with the rights granted to the holders of the Company’s or any of the Guarantors’ securities under any agreement entered into or in effect on the date hereof.

(c) Adjustments Affecting the Securities. The Company will not effect any change, or permit any change to occur, in each case, with respect to the terms of the Securities that would materially and adversely affect the ability of the Holders to Consummate any Exchange Offer.

(d) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless the Company has (i) in the case of Section 5 hereof and this Section 12(d)(i), obtained the written consent of Holders of all outstanding Transfer Restricted Securities affected hereby and (ii) in the case of all other provisions hereof, obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities (excluding any Transfer Restricted Securities held by the Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities being tendered or registered; provided, however, that, with respect to any matter that directly or indirectly affects the rights of any Dealer Manager hereunder, the Company shall obtain the written consent of each such Dealer Manager with respect to which such amendment, qualification, supplement, waiver, consent or departure is to be effective.

(e) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery:

(i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and

 

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(ii) if to the Company or the Guarantors:

Realogy Corporation

One Campus Drive

Parsippany, NJ 07054

Attention: General Counsel

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Telecopier No: (917) 777-3497

Attention: Stacy Kanter, Esq.

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture.

(f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without limitation, and without the need for an express assignment, subsequent Holders of Transfer Restricted Securities; provided, however , that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Securities from such Holder.

(g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

(k) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and

 

22


understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Company with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

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

 

REALOGY CORPORATION
By   /s/ Anthony E. Hull
  Name: Anthony E. Hull
  Title: EVP, CFO & Treasurer
  DOMUS HOLDINGS CORP.
By   /s/ Anthony E. Hull
  Name: Anthony E. Hull
  Title: EVP, CFO & Treasurer

[Signature Page to Registrations Rights Agreement – Senior Subordinated Notes]


CARTUS CORPORATION

CDRE TM LLC

NRT INSURANCE AGENCY, INC.

REALOGY OPERATIONS LLC

REALOGY SERVICES GROUP LLC

REALOGY SERVICES VENTURE PARTNER LLC

SOTHEBY’S INTERNATIONAL REALTY LICENSEE LLC

WREM, INC.

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Chief Financial Officer

[Signature Page to Registrations Rights Agreement – Senior Subordinated Notes]


ASSOCIATES REALTY, INC.

CARTUS ASSET RECOVERY CORPORATION

CARTUS PARTNER CORPORATION

FEDSTATE STRATEGIC CONSULTING,

INCORPORATED

J.W. RIKER – NORTHERN R.I., INC.

LAKECREST TITLE, LLC

NRT PHILADELPHIA LLC

REFERRAL NETWORK LLC

THE CORCORAN GROUP EASTSIDE, INC.

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Executive Vice President & Treasurer

[Signature Page to Registrations Rights Agreement – Senior Subordinated Notes]


AMERICAN TITLE COMPANY OF HOUSTON

ATCOH HOLDING COMPANY

BURNET TITLE LLC

BURNET TITLE HOLDING LLC

BURROW ESCROW SERVICES, INC.

CORNERSTONE TITLE COMPANY

EQUITY TITLE COMPANY

EQUITY TITLE MESSENGER SERVICE HOLDING LLC

FIRST CALIFORNIA ESCROW CORPORATION

FRANCHISE SETTLEMENT SERVICES LLC

GUARDIAN HOLDING COMPANY

GUARDIAN TITLE AGENCY, LLC

GUARDIAN TITLE COMPANY

GULF SOUTH SETTLEMENT SERVICES, LLC

KEYSTONE CLOSING SERVICES LLC

MARKET STREET SETTLEMENT GROUP LLC

MID-ATLANTIC SETTLEMENT SERVICES LLC

NATIONAL COORDINATION ALLIANCE LLC

NRT SETTLEMENT SERVICES OF MISSOURI LLC

NRT SETTLEMENT SERVICES OF TEXAS LLC

PROCESSING SOLUTIONS LLC

SECURED LAND TRANSFERS LLC

ST. JOE TITLE SERVICES LLC

TAW HOLDING INC.

TEXAS AMERICAN TITLE COMPANY

TITLE RESOURCE GROUP AFFILIATES HOLDINGS LLC

TITLE RESOURCE GROUP HOLDINGS LLC

TITLE RESOURCE GROUP LLC

TITLE RESOURCE GROUP SERVICES LLC

TITLE RESOURCES INCORPORATED

TRG SERVICES, ESCROW, INC.

TRG SETTLEMENT SERVICES, LLP

WAYDAN TITLE, INC.

WEST COAST ESCROW COMPANY

By:   /s/ Thomas N. Rispoli
Name:   Thomas N. Rispoli
Title:   Chief Financial Officer

[Signature Page to Registrations Rights Agreement – Senior Subordinated Notes]


BETTER HOMES AND GARDENS REAL ESTATE LLC

BETTER HOMES AND GARDENS REAL ESTATE

LICENSEE LLC

CENTURY 21 REAL ESTATE LLC

CGRN, INC.

COLDWELL BANKER LLC

COLDWELL BANKER REAL ESTATE LLC

ERA FRANCHISE SYSTEMS LLC

GLOBAL CLIENT SOLUTIONS LLC

ONCOR INTERNATIONAL LLC

REALOGY FRANCHISE GROUP LLC

REALOGY GLOBAL SERVICES LLC

REALOGY LICENSING LLC

SOTHEBY’S INTERNATIONAL REALTY AFFILIATES LLC

WORLD REAL ESTATE MARKETING LLC

By:   /s/ Andrew G. Napurano
Name:   Andrew G. Napurano
Title:   Chief Financial Officer

[Signature Page to Registrations Rights Agreement – Senior Subordinated Notes]


FSA MEMBERSHIP SERVICES, LLC
By:   /s/ Marilyn J. Wasser
Name:   Marilyn J. Wasser
Title:   Executive Vice President

[Signature Page to Registrations Rights Agreement – Senior Subordinated Notes]


ALPHA REFERRAL NETWORK LLC

ASSOCIATED CLIENT REFERRAL LLC

ASSOCIATES REALTY NETWORK

BURGDORFF LLC

BURGDORFF REFERRAL ASSOCIATES LLC

BURNET REALTY LLC

CAREER DEVELOPMENT CENTER, LLC

COLDWELL BANKER COMMERCIAL PACIFIC PROPERTIES LLC

COLDWELL BANKER PACIFIC PROPERTIES LLC

COLDWELL BANKER REAL ESTATE SERVICES LLC

COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY

COLDWELL BANKER RESIDENTIAL BROKERAGE LLC

COLDWELL BANKER RESIDENTIAL REAL ESTATE LLC

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK, INC.

COLORADO COMMERCIAL, LLC

HOME REFERRAL NETWORK LLC

JACK GAUGHEN LLC

NRT ARIZONA LLC

NRT ARIZONA COMMERCIAL LLC

NRT ARIZONA REFERRAL LLC

NRT COLORADO LLC

NRT COLUMBUS LLC

NRT COMMERCIAL LLC

NRT COMMERCIAL UTAH LLC

NRT DEVELOPMENT ADVISORS LLC

NRT DEVONSHIRE LLC

NRT HAWAII REFERRAL, LLC

NRT LLC

NRT MID-ATLANTIC LLC

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

[Signature Page to Registrations Rights Agreement – Senior Subordinated Notes]


NRT MISSOURI LLC

NRT MISSOURI REFERRAL NETWORK LLC

NRT NEW ENGLAND LLC

NRT NEW YORK LLC

NRT NORTHFORK LLC

NRT PITTSBURGH LLC

NRT REFERRAL NETWORK LLC

NRT RELOCATION LLC

NRT REOEXPERTS LLC

NRT SUNSHINE INC.

NRT TEXAS LLC

NRT UTAH LLC

REAL ESTATE REFERRAL LLC

REAL ESTATE REFERRALS LLC

REAL ESTATE SERVICES LLC

REFERRAL ASSOCIATES OF NEW ENGLAND LLC

REFERRAL NETWORK, LLC

REFERRAL NETWORK PLUS, INC.

SOTHEBY’S INTERNATIONAL REALTY, INC.

SOTHEBY’S INTERNATIONAL REALTY REFERRAL COMPANY, LLC

THE SUNSHINE GROUP (FLORIDA) LTD. CORP.

THE SUNSHINE GROUP, LTD.

VALLEY OF CALIFORNIA, INC.

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

[Signature Page to Registrations Rights Agreement – Senior Subordinated Notes]


The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written:

 

J.P. MORGAN SECURITIES LLC
By:   /s/ David A. Dwyer
  Name: David A. Dwyer
  Title: Executive Director
CREDIT SUISSE SECURITIES (USA) LLC
By:   /s/ Malcolm Price
  Name: Malcolm Price
  Title: Managing Director
GOLDMAN, SACHS & CO.
By:   /s/ Goldman Sachs & Co.
  (Goldman, Sachs & Co.)

[Signature Page to Registrations Rights Agreement – Senior Subordinated Notes]


Schedule A

Guarantors

Associates Realty, Inc.

Associates Realty Network

Burrow Escrow Services, Inc.

Coldwell Banker Real Estate LLC

Coldwell Banker Residential Brokerage Company

Coldwell Banker Residential Real Estate LLC

Coldwell Banker Residential Referral Network

Cornerstone Title Company

Equity Title Company

Guardian Title Company

National Coordination Alliance LLC

Realogy Operations LLC

Referral Network Plus, Inc.

Valley of California, Inc.

West Coast Escrow Company

Colorado Commercial, LLC

Guardian Title Agency, LLC

NRT Colorado LLC

Referral Network, LLC

Associated Client Referral LLC

Better Homes and Gardens Real Estate Licensee LLC

Better Homes and Gardens Real Estate LLC

Burgdorff LLC

Burgdorff Referral Associates LLC

Career Development Center, LLC

Cartus Asset Recovery Corporation

Cartus Corporation

Cartus Partner Corporation

CDRE TM LLC

Century 21 Real Estate LLC

CGRN, Inc.

Coldwell Banker LLC

Coldwell Banker Real Estate Services LLC

Coldwell Banker Residential Brokerage LLC

Equity Title Messenger Service Holding LLC

ERA Franchise Systems LLC

FedState Strategic Consulting, Incorporated

First California Escrow Corporation

Franchise Settlement Services LLC

FSA Membership Services, LLC

Global Client Solutions LLC

Guardian Holding Company

Gulf South Settlement Services, LLC


Jack Gaughen LLC

Keystone Closing Services LLC

NRT Arizona Commercial LLC

NRT Arizona LLC

NRT Arizona Referral LLC

NRT Columbus LLC

NRT Commercial LLC

NRT Commercial Utah LLC

NRT Development Advisors LLC

NRT Devonshire LLC

NRT Hawaii Referral, LLC

NRT LLC

NRT Mid-Atlantic LLC

NRT Missouri LLC

NRT Missouri Referral Network LLC

NRT New England LLC

NRT New York LLC

NRT Northfork LLC

NRT Philadelphia LLC

NRT Pittsburgh LLC

NRT Referral Network LLC

NRT Relocation LLC

NRT REOExperts LLC

NRT Settlement Services of Missouri LLC

NRT Settlement Services of Texas LLC

NRT Sunshine Inc.

NRT Utah LLC

ONCOR International LLC

Real Estate Referral LLC

Real Estate Referrals LLC

Real Estate Services LLC

Realogy Franchise Group LLC

Realogy Global Services LLC

Realogy Licensing LLC

Realogy Services Group LLC

Realogy Services Venture Partner LLC

Secured Land Transfers LLC

Sotheby’s International Realty Affiliates LLC

Sotheby’s International Realty Licensee LLC

Sotheby’s International Realty Referral Company, LLC

Title Resource Group Affiliates Holdings LLC

Title Resource Group Holdings LLC

Title Resource Group LLC

Title Resource Group Services LLC

Title Resources Incorporated

TRG Services, Escrow, Inc.


World Real Estate Marketing LLC

WREM, Inc.

Referral Network LLC

St. Joe Title Services LLC

The Sunshine Group (Florida) Ltd. Corp.

Coldwell Banker Commercial Pacific Properties LLC

Coldwell Banker Pacific Properties LLC

NRT Insurance Agency, Inc.

Referral Associates of New England LLC

Mid-Atlantic Settlement Services LLC

Sotheby’s International Realty, Inc.

Burnet Realty LLC

Burnet Title LLC

Burnet Title Holding LLC

Home Referral Network LLC

Market Street Settlement Group LLC

The Corcoran Group Eastside, Inc.

The Sunshine Group, Ltd.

Coldwell Banker Residential Referral Network, Inc.

TRG Settlement Services, LLP

J. W. Riker – Northern R.I., Inc.

Lakecrest Title, LLC

Alpha Referral Network

LLC

American Title Company of Houston

ATCOH Holding Company

NRT Texas LLC

Processing Solutions LLC

TAW Holding Inc.

Texas American Title Company

Waydan Title, Inc.

Exhibit 4.69

 

 

 

INDENTURE

Dated as of January 5, 2011

Among

REALOGY CORPORATION,

DOMUS HOLDINGS CORP.,

THE NOTE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Trustee

 

 

11.00% SERIES A CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2018

11.00% SERIES B CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2018

11.00% SERIES C CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2018

 

 

 

 

 


CROSS-REFERENCE TABLE*

 

TIA Section

   Indenture Section
310(a)(1)    7.10
      (a)(2)    7.10
      (a)(3)    N.A.
      (a)(4)    N.A.
      (a)(5)    7.10
      (b)    7.10
      (c)    N.A.
311(a)    7.11
      (b)    7.11
      (c)    N.A.
312(a)    2.05
      (b)    16.03
      (c)    16.03
313(a)    7.06
      (b)(1)    N.A.
      (b)(2)    7.06; 7.07
      (c)    7.06; 16.02
      (d)    7.06
314(a)    4.03; 4.04; 16.02; 16.05
      (b)    N.A.
      (c)(1)    16.04
      (c)(2)    16.04
      (c)(3)    N.A.
      (d)    N.A.
      (e)    16.05
      (f)    N.A.
315(a)    7.01
      (b)    7.05; 16.02
      (c)    7.01
      (d)    7.01
      (e)    6.14
316(a) (last sentence)    2.09
      (a)(1)(A)    6.05
      (a)(1)(B)    6.04
      (a)(2)    N.A.
      (b)    6.07
      (c)    1.05, 9.04
317(a)(1)    6.08
      (a)(2)    6.12
      (b)    2.04
318(a)    16.01
      (b)    N.A.
      (c)    16.01

N.A. means not applicable.

* This Cross-Reference Table is not part of the Indenture.


TABLE OF CONTENTS

 

         Page  

ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE

     8   

Section 1.01.

  Definitions      8   

Section 1.02.

  Other Definitions      22   

Section 1.03.

  Incorporation by Reference of TIA      24   

Section 1.04.

  Rules of Construction      25   

Section 1.05.

  Acts of Holders      26   

ARTICLE 2 THE NOTES

     27   

Section 2.01.

  Form and Dating; Terms      27   

Section 2.02.

  Execution and Authentication      27   

Section 2.03.

  Registrar, Conversion Agent and Paying Agent      28   

Section 2.04.

  Paying Agent to Hold Money in Trust      28   

Section 2.05.

  Holder Lists      28   

Section 2.06.

  Transfer and Exchange      29   

Section 2.07.

  Replacement Notes      30   

Section 2.08.

  Outstanding Notes      30   

Section 2.09.

  Treasury Notes      30   

Section 2.10.

  Temporary Notes      31   

Section 2.11.

  Cancellation      31   

Section 2.12.

  Defaulted Interest      31   

Section 2.13.

  CUSIP Numbers      32   

Section 2.14.

  Calculation of Principal Amount of Notes      32   

ARTICLE 3 REDEMPTION

     32   

Section 3.01.

  Notices to Trustee      32   

Section 3.02.

  Selection of Notes to Be Redeemed      32   

Section 3.03.

  Notice of Redemption      33   

Section 3.04.

  Effect of Notice of Redemption      34   

Section 3.05.

  Deposit of Redemption or Purchase Price      34   

Section 3.06.

  Notes Redeemed or Purchased in Part      35   

Section 3.07.

  Optional Redemption      35   

Section 3.08.

  Mandatory Redemption      35   

ARTICLE 4 COVENANTS

     36   

Section 4.01.

  Payment of Notes      36   

Section 4.02.

  Maintenance of Office or Agency      36   

Section 4.03.

  Reports and Other Information      36   

Section 4.04.

  Compliance Certificate      37   

Section 4.05.

  Note Guarantors      37   

Section 4.06.

  Stay, Extension and Usury Laws      37   

Section 4.07.

  Corporate Existence      38   

Section 4.08.

  Offer to Repurchase Upon Change of Control      38   

 

-i-


         Page  
ARTICLE 5 SUCCESSORS      41   

Section 5.01.

 

Merger, Amalgamation Consolidation or Sale of All or Substantially All Assets

     41   

Section 5.02.

 

Successor Entity Substituted

     42   

ARTICLE 6 DEFAULTS AND REMEDIES

     42   

Section 6.01.

 

Events of Default

     42   

Section 6.02.

 

Acceleration

     44   

Section 6.03.

 

Other Remedies

     45   

Section 6.04.

 

Waiver of Past Defaults

     45   

Section 6.05.

 

Control by Majority

     45   

Section 6.06.

 

Limitation on Suits

     45   

Section 6.07.

 

Rights of Holders of Notes to Receive Payment and to Convert

     46   

Section 6.08.

 

Collection Suit by Trustee

     46   

Section 6.09.

 

Restoration of Rights and Remedies

     46   

Section 6.10.

  Rights and Remedies Cumulative      46   

Section 6.11.

  Delay or Omission Not Waiver      46   

Section 6.12.

  Trustee May File Proofs of Claim      47   

Section 6.13.

  Priorities      47   

Section 6.14.

  Undertaking for Costs      47   

ARTICLE 7 TRUSTEE

     48   

Section 7.01.

 

Duties of Trustee

     48   

Section 7.02.

 

Rights of Trustee

     49   

Section 7.03.

 

Individual Rights of Trustee

     50   

Section 7.04.

 

Trustee’s Disclaimer

     50   

Section 7.05.

 

Notice of Defaults

     50   

Section 7.06.

 

Reports by Trustee to Holders of the Notes

     51   

Section 7.07.

 

Compensation and Indemnity

     51   

Section 7.08.

  Replacement of Trustee      52   

Section 7.09.

 

Successor Trustee by Merger, etc.

     53   

Section 7.10.

 

Eligibility; Disqualification

     53   

Section 7.11.

 

Preferential Collection of Claims Against the Issuer

     53   

ARTICLE 8 CONVERSION OF NOTES

     53   

Section 8.01.

 

Right to Convert

     53   

Section 8.02.

 

Exercise of Conversion Privilege; Issuance of Common Stock on Conversion

     54   

Section 8.03.

 

No Fractional Shares

     55   

Section 8.04.

 

Responsibility of Trustee

     55   

Section 8.05.

 

Adjustment of Conversion Rates

     56   

Section 8.06.

 

Effect of Reclassification, Consolidation, Merger or Sale

     64   

Section 8.07.

 

Taxes on Shares of Common Stock

     65   

Section 8.08.

 

Reservation of Shares, Shares to Be Fully Paid; Compliance With Governmental Requirements; Listing of Common Stock

     65   

Section 8.09.

 

Notice to Holders Prior to Certain Actions

     66   

 

-ii-


         Page  

ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER

     66   

Section 9.01.

 

Without Consent of Holders of Notes

     66   

Section 9.02.

 

With Consent of Holders of Notes

     68   

Section 9.03.

 

Compliance with TIA

     69   

Section 9.04.

 

Revocation and Effect of Consents

     69   

Section 9.05.

 

Notation on or Exchange of Notes

     69   

Section 9.06.

 

Trustee to Sign Amendments, etc.

     69   

ARTICLE 10 SUBORDINATION

     70   

Section 10.01.

 

Agreement To Subordinate

     70   

Section 10.02.

 

Liquidation, Dissolution, Bankruptcy

     70   

Section 10.03.

 

Default on Senior Indebtedness of the Issuer

     71   

Section 10.04.

 

Acceleration of Payment of Notes

     72   

Section 10.05.

 

When Distribution Must Be Paid Over

     72   

Section 10.06.

 

Subrogation

     72   

Section 10.07.

 

Relative Rights

     72   

Section 10.08.

 

Subordination May Not Be Impaired by the Issuer

     73   

Section 10.09.

 

Rights of Trustee and Paying Agent

     73   

Section 10.10.

 

Distribution or Notice to Representative

     73   

Section 10.11.

 

Article 10 Not To Prevent Events of Default or Limit Right To Accelerate

     73   

Section 10.12.

 

Payment Moneys Not Subordinated

     74   

Section 10.13.

 

Trustee Entitled To Rely

     74   

Section 10.14.

 

Trustee To Effectuate Subordination

     74   

Section 10.15.

 

Trustee Not Fiduciary for Holders of Senior Indebtedness of the Issuer

     74   

Section 10.16.

 

Reliance by Holders of Senior Indebtedness of the Issuer on Subordination Provisions

     74   

ARTICLE 11 NOTE GUARANTEES

     75   

Section 11.01.

 

Note Guarantee

     75   

Section 11.02.

 

Limitation on Note Guarantor Liability

     77   

Section 11.03.

 

Execution and Delivery

     77   

Section 11.04.

 

Subrogation

     77   

Section 11.05.

 

Benefits Acknowledged

     78   

Section 11.06.

 

Release of Note Guarantees

     78   

Section 11.07.

 

Securitization Acknowledgement

     78   

ARTICLE 12 HOLDINGS GUARANTEE

     80   

Section 12.01.

 

Holdings Guarantee

     80   

Section 12.02.

 

Limitation on Holdings Liability

     82   

Section 12.03.

 

Execution and Delivery

     82   

Section 12.04.

 

Subrogation

     82   

Section 12.05.

 

Benefits Acknowledged

     83   

Section 12.06.

 

Release of Holdings Guarantee

     83   

ARTICLE 13 SUBORDINATION OF NOTE GUARANTEES

     83   

Section 13.01.

 

Agreement To Subordinate

     83   

 

-iii-


         Page  

Section 13.02.

 

Liquidation, Dissolution, Bankruptcy

     83   

Section 13.03.

 

Default on Senior Indebtedness of a Note Guarantor

     84   

Section 13.04.

 

Demand for Payment

     85   

Section 13.05.

 

When Distribution Must Be Paid Over

     85   

Section 13.06.

 

Subrogation

     85   

Section 13.07.

 

Relative Rights

     85   

Section 13.08.

 

Subordination May Not Be Impaired by a Note Guarantor

     86   

Section 13.09.

 

Rights of Trustee and Paying Agent

     86   

Section 13.10.

 

Distribution or Notice to Representative

     87   

Section 13.11.

 

Article 13 Not To Prevent Events of Default or Limit Right To Demand Payment

     87   

Section 13.12.

 

Payment Moneys Not Subordinated

     87   

Section 13.13.

 

Trustee Entitled To Rely

     87   

Section 13.14.

 

Trustee To Effectuate Subordination

     87   

Section 13.15.

 

Trustee Not Fiduciary for Holders of Senior Indebtedness of Note Guarantors

     88   

Section 13.16.

 

Reliance by Holders of Senior Indebtedness of a Note Guarantor on Subordination Provisions

     88   

ARTICLE 14 SUBORDINATION OF HOLDINGS GUARANTEE

     88   

Section 14.01.

 

Agreement To Subordinate

     88   

Section 14.02.

 

Liquidation, Dissolution, Bankruptcy

     89   

Section 14.03.

 

Default on Holdings Senior Indebtedness

     89   

Section 14.04.

 

Demand for Payment

     90   

Section 14.05.

 

When Distribution Must Be Paid Over

     90   

Section 14.06.

 

Subrogation

     90   

Section 14.07.

 

Relative Rights

     91   

Section 14.08.

 

Subordination May Not Be Impaired by Holdings

     91   

Section 14.09.

 

Rights of Trustee and Paying Agent

     91   

Section 14.10.

 

Distribution or Notice to Holdings Representative

     92   

Section 14.11.

 

Article 14 Not To Prevent Events of Default or Limit Right To Demand Payment

     92   

Section 14.12.

 

Payment Moneys Not Subordinated

     92   

Section 14.13.

 

Trustee Entitled To Rely

     92   

Section 14.14.

 

Trustee To Effectuate Subordination

     92   

Section 14.15.

 

Trustee Not Fiduciary for Holders of Holdings Senior Indebtedness

     93   

Section 14.16.

 

Reliance by Holders of Holdings Senior Indebtedness on Subordination Provisions

     93   

ARTICLE 15 DISCHARGE

     93   

Section 15.01.

 

Discharge

     93   

Section 15.02.

 

Repayment to the Issuer

     94   

ARTICLE 16 MISCELLANEOUS

     94   

Section 16.01.

 

TIA Controls

     94   

Section 16.02.

 

Notices

     94   

Section 16.03.

 

Communication by Holders of Notes with Other Holders of Notes

     95   

Section 16.04.

 

Certificate and Opinion as to Conditions Precedent

     95   

 

-iv-


         Page  

Section 16.05.

 

Statements Required in Certificate or Opinion

     96   

Section 16.06.

 

Rules by Trustee and Agents

     96   

Section 16.07.

 

No Personal Liability of Directors, Officers, Employees and Stockholders

     96   

Section 16.08.

 

Governing Law

     96   

Section 16.09.

 

Waiver of Jury Trial

     96   

Section 16.10.

 

Force Majeure

     97   

Section 16.11.

 

No Adverse Interpretation of Other Agreements

     97   

Section 16.12.

 

Successors

     97   

Section 16.13.

 

Severability

     97   

Section 16.14.

 

Counterpart Originals

     97   

Section 16.15.

 

Table of Contents, Headings, etc.

     97   

Section 16.16.

 

Qualification of Indenture

     97   

 

Appendix A

  

Provisions Relating to Notes

Exhibit A

  

Form of Note

Exhibit B

  

Form of Transferee Letter of Representation

Exhibit C

  

Form of Supplemental Indenture to Be Delivered by Future Note Guarantors

 

-v-


INDENTURE, dated as of January 5, 2011, among Realogy Corporation, a Delaware corporation (the “ Issuer ”), Domus Holdings Corp., a Delaware corporation and the indirect parent of the Issuer (“ Holdings ”), the Note Guarantors (as defined herein) listed on the signature pages hereto and The Bank of New York Mellon Trust Company, N.A., as Trustee.

W I T N E S S E T H

WHEREAS, in connection with the Existing Notes Exchange Offers (as defined herein), the Issuer has duly authorized the creation of and issue of 11.00% Series A Convertible Senior Subordinated Notes Due 2018, 11.00% Series B Convertible Senior Subordinated Notes Due 2018 and 11.00% Series C Convertible Senior Subordinated Notes Due 2018 (collectively, the “ Notes ”), in an aggregate principal amount not to exceed $2.12 billion; and

WHEREAS, the Issuer, Holdings and each of the Note Guarantors has duly authorized the execution and delivery of this Indenture.

NOW, THEREFORE, the Issuer, Holdings, the Note Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Notes.

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01.  Definitions .

Additional Interest ” means all additional interest then owing pursuant to the Registration Rights Agreement.

Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

Agent ” means any Registrar, Conversion Agent and Paying Agent.

Apple Ridge Documents ” means the Transfer and Servicing Agreement, dated as of April 25, 2000, as amended, by and among Apple Ridge Services Corporation, Cartus Corporation, Cartus Financial Corporation, Apple Ridge Funding LLC and The Bank of New York Mellon (formerly known as The Bank of New York) (the “ Transfer and Servicing Agreement ”), the Receivables Purchase Agreement, dated as of April 25, 2000, as amended, by and between Cartus Financial Corporation and Apple Ridge Services Corporation (the “ Receivables Purchase Agreement ”), the Purchase Agreement, dated as of April 25, 2000, as amended, by and between Cartus Corporation and Cartus Financial Corporation (the “ Purchase Agreement ”), the Amended and Restated Note Purchase Agreement, dated as of April 10, 2007, as amended and restated as of July 6, 2007, by and among Apple Ridge Funding LLC, Cartus Corporation, Credit Agricole Corporate and Investment Bank, New York Branch (formerly known as Calyon New York Branch) and the Conduit Purchasers, Committed Purchasers and Managing Agents from time to time parties thereto, the Master Indenture, April 25, 2000, as amended, by and between Apple Ridge Funding LLC and The Bank of New York Mellon, the Amended and Restated Series 2007-1 Indenture Supplement, dated as of April 10, 2007, as amended and restated as of July 6, 2007, by and between Apple Ridge Funding LLC and The Bank of New York Mellon, the Performance Guaranty,

 


dated as of May 12, 2006, as amended by the Fifth Omnibus Amendment dated as of April 10, 2007, by Realogy Corporation in favor of Apple Ridge Funding LLC and Cartus Financial Corporation, and each other agreement or other document contemplated by or entered into in connection with and/or in replacement of the foregoing, each as amended, restated, refinanced, modified or supplemented on or prior to the Issue Date.

Applicable Procedures ” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary to the extent applicable to such transaction and as in effect from time to time.

Arbitrage Programs ” has the meaning ascribed to it in the New Senior Subordinated Note Indenture.

Authorized Denomination ” means, (i) with respect to the Series A Convertible Notes and to the Series C Convertible Notes, $1,000 and integral multiples of $1,000 in excess thereof, and (ii) with respect to the Series B Convertible Notes, $1,000 and integral multiples of $1.00 in excess thereof.

Bank Indebtedness ” means any and all amounts payable under or in respect of the Credit Agreement and the other Credit Agreement Documents as amended, restated, supplemented, waived, replaced, restructured, repaid, refunded, refinanced or otherwise modified from time to time (including after termination of the Credit Agreement), including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Issuer whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof.

Bankruptcy Law ” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

beneficial ownership ” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as such term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire, whether such right is currently exercisable or is exercisable only after the passage of time.

Board of Directors ” means, as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.

Business Day ” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or the city in which the Trustee’s principal office is located.

Capital Stock ” means:

(1) in the case of a corporation or a company, corporate stock or shares;

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

 

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(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

Capitalized Lease Obligation ” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

Cendant ” means Cendant Corporation, a Delaware corporation (now known as Avis Budget Group, Inc.).

Cendant Contingent Liabilities ” has the meaning assigned to “Assumed Cendant Contingent Liabilities” in the Separation and Distribution Agreement and shall also include any liabilities that are related or attributable to or arising in connection with Taxes or Tax Returns (as each term is defined in the Cendant Tax Sharing Agreement).

Cendant Tax Sharing Agreement ” means the Tax Sharing Agreement, dated as of July 28, 2006, by and among Cendant, the Issuer, Wyndham Worldwide Corporation and Travelport Inc., as amended on or prior to the date of the Offering Memorandum.

Change of Control ” means the occurrence of any of the following:

(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of the Issuer and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or

(2) the Issuer becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of the Issuer or any direct or indirect parent of the Issuer. Notwithstanding the foregoing, a Specified Merger/Transfer Transaction shall not constitute a Change of Control.

Closing Sale Price ” of Common Stock on any date means (i) the closing sale price per share (or if no closing sale price is reported, the average of the closing bid and closing ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) on such date as reported in composite transactions for the principal Qualified Exchange on which the Common Stock is traded, or if no closing price is available, the last quoted bid price for such Common Stock in the over-the-counter market as reported by Pink Sheets LLC or similar organization, or, if that bid price is not available, Closing Sale Price per share shall be the Fair Market Value of a share of Common Stock as determined in good faith by the Board of Directors (which determination shall be conclusive and shall be evidenced by an Officer’s Certificate delivered to the Trustee); and (ii) in the case of Section 8.05(e), if such Common Stock is not so listed on a Qualifying Exchange, the Closing Sale Price will be the applicable Conversion Price.

Code ” means the Internal Revenue Code of 1986, as amended.

 

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Common Stock ” means, subject to Section 8.06, Class A common stock of Holdings, par value $0.01 per share.

Common Stock Fair Market Value ” as of any day means the closing sale price as reported in the composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock is so listed or quoted, or, if no closing sale price is reported, the last reported sale price on the principal U.S. national or regional securities exchange on which such Common Stock is so listed or quoted, or if such Common Stock is not so listed or quoted on a U.S. national or regional securities exchange, the last quoted bid price for such Common Stock in the over-the-counter market as reported by Pink Sheets LLC or similar organization, or, if that bid price is not available (whether as a result of not being reported or otherwise), the Common Stock Fair Market Value of such Common Stock as determined by the Board of Directors of Holdings in good faith and certified in a resolution sent to the Trustee.

Contingent Obligations ” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“ primary obligations ”) of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:

(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor;

(2) to advance or supply funds:

(a) for the purchase or payment of any such primary obligation; or

(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

Conversion Price ” as of any day means $1,000 divided by the applicable Conversion Rate as of such date.

Conversion Rate ” as of any day means the number of shares of Common Stock issuable upon conversion of a Note per $1,000 principal amount as of such date. The initial Conversion Rate for the Series A Convertible Notes and the Series B Convertible Notes is 975.6098 shares of Common Stock per $1,000 principal amount of such Notes (or, for the avoidance of doubt, 0.9756098 shares per $1 principal amount of such Notes) and the initial Conversion Rate for the Series C Convertible Notes is 926.7841 shares of Common Stock per $1,000 principal amount of such Notes. The initial Conversion Rates will be subject to adjustment as provided in Section 8.05.

Corporate Trust Office of the Trustee ” means the designated office of the Trustee at which at any time its corporate trust business shall be administered, which office at the dated hereof is located at 525 William Penn Place, 38 th Floor, Pittsburgh, PA 15259, Attention: Corporate Trust Administration, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

 

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Credit Agreement ” means, collectively, (i) the credit agreement dated as of April 10, 2007, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof, among the Issuer, Domus Intermediate Holdings Corp., a Delaware limited liability company and the parent of the Issuer, as guarantor, the other guarantors named therein, the financial institutions named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent, and (ii) whether or not the credit agreement referred to in clause (i) remains outstanding, if designated by the Issuer to be included in the definition of “Credit Agreement,” one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, Permitted Securitization Financings (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers, guarantors or issuers or lenders or group of lenders, and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

Credit Agreement Documents ” means the collective reference to the Credit Agreement, any notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time.

Custodian ” means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.

Dealer Managers ” means J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC and Goldman, Sachs & Co.

Default ” means any event which is, or after notice or passage of time or both would be, an Event of Default.

Definitive Note ” means a certificated Note (bearing the Restricted Notes Legend if the transfer of such Note is restricted by applicable law) that does not include the Global Notes Legend.

Depositary ” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

Designated Senior Indebtedness ” means, with respect to the Issuer or a Note Guarantor:

(1) the Bank Indebtedness (to the extent such Bank Indebtedness constitutes Senior Indebtedness);

(2) the New Senior Notes;

(3) the Existing Senior Notes; and

 

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(4) any other Senior Indebtedness of the Issuer or such Note Guarantor that, at the date of determination, has an aggregate principal amount outstanding of, or under which, at the date of determination, the holders thereof are committed to lend up to, at least $25.0 million and is specifically designated by the Issuer or such Note Guarantor in the instrument evidencing or governing such Senior Indebtedness as “Designated Senior Indebtedness” for purposes of this Indenture.

Disqualified Stock ” means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable, putable or exchangeable), or upon the happening of any event:

(1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale; provided that the relevant asset sale or change of control provisions, taken as a whole, are no more favorable in any material respect to holders of such Capital Stock than the asset sale and change of control provisions applicable to the Notes and any purchase requirement triggered thereby may not become operative until compliance with the asset sale and change of control provisions applicable to the Notes (including the purchase of any Notes tendered pursuant thereto)),

(2) is convertible or exchangeable at the option of the holder thereof for Indebtedness or Disqualified Stock of such Person, or

(3) is redeemable at the option of the holder thereof, in whole or in part,

in each case prior to 91 days after the maturity date of the Notes; provided , however , that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable at the option of the holder thereof or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided further , however , that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the Issuer or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Issuer in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; provided further , that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

Equity Interests ” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

Event of Default ” has the meaning set forth under Section 6.01 hereof.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

Existing Notes ” means the aggregate principal amount of the Existing Senior Cash Notes, Existing Senior Toggle Notes and Existing Senior Subordinated Notes in existence on the Issue Date (after giving effect to the Existing Notes Exchange Offers) less the aggregate principal amount of Existing Senior Notes and Existing Senior Subordinated Notes that are thereafter repurchased, redeemed, discharged or otherwise repaid.

 

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Existing Notes Exchange Offers ” means the transactions contemplated by the Offering Memorandum, including those described therein under the caption “Certain Relationships and Related Transactions”.

Existing Senior Cash Notes ” means the 10.50% Senior Notes due 2014, issued by the Issuer pursuant to the Existing Senior Cash Note Indenture.

Existing Senior Cash Note Indenture ” means the Indenture dated as of April 10, 2007 among the Issuer, the guarantors named therein and The Bank of New York Mellon, as successor Trustee, governing the Existing Senior Cash Notes, as amended, supplemented or modified from time to time.

Existing Senior Notes ” means the Existing Senior Cash Notes and the Existing Senior Toggle Notes.

Existing Senior Subordinated Notes ” means the 12.375% Senior Subordinated Notes due 2015, issued by the Issuer pursuant to the Existing Senior Subordinated Note Indenture.

Existing Senior Subordinated Note Indenture ” means the Indenture dated as of April 10, 2007 among the Issuer, the guarantors named therein and The Bank of New York Mellon, as successor Trustee, governing the Existing Senior Subordinated Notes, as amended, supplemented or modified from time to time.

Existing Senior Toggle Notes ” means the 11.00%/11.75% Senior Toggle Notes due 2014, issued by the Issuer pursuant to the Existing Senior Toggle Note Indenture.

Existing Senior Toggle Note Indenture ” means the Indenture dated as of April 10, 2007 among the Issuer, the guarantors named therein and The Bank of New York Mellon, as successor Trustee, governing the Existing Senior Toggle Notes, as amended, supplemented or modified from time to time.

Extended Maturity Notes ” means, collectively, the New 11.50% Senior Notes, the New 12.00% Senior Notes and the New Senior Subordinated Notes.

Fair Market Value ” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.

GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date.

Global Notes Legend ” means the legend set forth under that caption in Exhibit A to this Indenture.

guarantee ” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

Hedging Obligations ” means, with respect to any Person, the obligations of such Person under:

 

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(1) currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and

(2) other similar agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

Holder ” or “ Noteholder ” means the Person in whose name a Note is registered on the Registrar’s books.

Holdings ” means the party named as such in the preamble to this Indenture and its successors.

Holdings Guarantee ” means the guarantee of the obligations of the Issuer under this Indenture and the Notes by Holdings in accordance with the provisions of this Indenture.

Holdings Pari Passu Indebtedness ” means with respect to Holdings, (i) the guarantee by Holdings of the obligations of the Issuer under the Existing Senior Subordinated Note Indenture and the New Senior Subordinated Note Indenture and (ii) any Indebtedness that is not Holdings Senior Indebtedness or Holdings Subordinated Indebtedness.

Holdings Representative ” means the trustee, agent or representative (if any) for an issue of Holdings Senior Indebtedness; provided that if, and for so long as, such Holdings Senior Indebtedness lacks such a Holdings Representative, then the Holdings Representative for such Holdings Senior Indebtedness shall at all times constitute the holder or holders of a majority in outstanding principal amount of obligations under such Holdings Senior Indebtedness.

Holdings Senior Indebtedness ” means with respect to Holdings, (i) the obligations of Holdings under its guarantees of the obligations of the Issuer under the Existing Senior Notes, the Existing Senior Cash Note Indenture, the Existing Senior Toggle Note Indenture, the New 11.50% Senior Notes, the New 12.00% Senior Notes and the indentures relating to the New 11.50% Senior Notes and the New 12.00% Senior Notes and (ii) any future Indebtedness of Holdings that is designated by Holdings as Holdings Senior Indebtedness.

Holdings Subordinated Indebtedness ” means with respect to Holdings, any Indebtedness of Holdings, guarantee of Holdings or obligation of Holdings that specifically provides that such Indebtedness of Holdings, guarantee of Holdings or obligation of Holdings is to rank junior in right of payment to the Holdings Guarantee.

Incur ” means issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.

Indebtedness ” means, with respect to any Person:

(1) the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except (i) any such balance that constitutes a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business and (ii) any earn-out

 

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obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP), (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

(2) to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and

(3) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person;

provided , however , that notwithstanding the foregoing, Indebtedness shall be deemed to exclude (1) Contingent Obligations incurred in the ordinary course of business and the Cendant Contingent Liabilities (including the Contingent Obligations described in note 13 to the Issuer’s consolidated financial statements for the year ended December 31, 2009, incorporated by reference in the Offering Memorandum) (not in respect of borrowed money); (2) deferred or prepaid revenues or marketing fees; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) obligations under or in respect of a Permitted Securitization Financing (but including the excess, if any, of the amount of the obligations thereunder or in respect thereof over the aggregate receivables balances securing or otherwise supporting such obligations but only to the extent that the Issuer or any Subsidiary of the Issuer other than a Special Purpose Securitization Subsidiary is directly or indirectly liable for such excess); (5) obligations under or in respect of Arbitrage Programs; (6) obligations to make payments in respect of funds held under escrow arrangements in the ordinary course of business; (7) obligations to make payments to third party insurance underwriters in respect of premiums collected by the Issuer and its Subsidiaries in the ordinary course of business; or (8) obligations under the Merger Documents.

Notwithstanding anything in this Indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Accounting Standards Codification 815 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture.

Indenture ” means this Indenture, as amended or supplemented from time to time.

Interest Payment Date ” means April 15 and October 15 of each year to Stated Maturity.

Issue Date ” means January 5, 2011, the date on which the Notes are originally issued.

Issuer ” means the party named as such in the preamble to this Indenture and its successors, and not any of its Subsidiaries.

 

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Issuer Order ” means a written request or order signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of such Issuer, and delivered to the Trustee.

Lien ” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest, preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement), any lease in the nature thereof, any agreement to give a mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest or encumbrance of any kind and, except in connection with any Permitted Securitization Financing, any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction (other than a filing for informational purposes); provided that in no event shall an operating lease or an option or an agreement to sell be deemed to constitute a Lien.

Management Group ” means the group consisting of the directors, executive officers and other management personnel of the Issuer or any direct or indirect parent of the Issuer, as the case may be, on the Issue Date.

Merger Documents ” means the Agreement and Plan of Merger by and among Holdings, Domus Acquisition Corp. and the Issuer, dated as of December 15, 2006, and any other document entered into in connection therewith, in each case as amended, supplemented or modified from time to time on or prior to the Original Issue Date.

New 11.50% Senior Notes ” means the Issuer’s 11.50% Senior Notes due 2017.

New 12.00% Senior Notes ” means the Issuer’s 12.00% Senior Notes due 2017.

New Notes ” means, collectively, the Extended Maturity Notes and the Notes.

New Senior Notes ” means the New 11.50% Senior Notes and the New 12.00% Senior Notes.

New Senior Subordinated Note Indenture ” means the Indenture governing Issuer’s 13.375% Senior Subordinated Notes due 2018, as amended, supplemented and modified from time to time.

New Senior Subordinated Notes ” means the Issuer’s 13.375% Senior Subordinated Notes due 2018.

Note Guarantee ” means any guarantee of the obligations of the Issuer under this Indenture and the Notes by any Note Guarantor in accordance with the provisions of this Indenture.

Note Guarantor ” means any Subsidiary that Incurs a Note Guarantee and its successors; provided that upon the release or discharge of such Person from its Note Guarantee in accordance with this Indenture, such Person ceases to be a Note Guarantor.

Notes ” has the meaning set forth in the recitals hereto and more particularly means any Note authenticated and delivered under this Indenture. For all purposes of this Indenture, the term “Notes” shall include Series A Convertible Notes, Series B Convertible Notes and Series C Convertible Notes. Unless expressly stated otherwise, Series A Convertible Notes, Series B Convertible Notes and Series C Convertible Notes shall be treated as a single class for all purposes under this Indenture.

 

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Obligations ” means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness; provided that Obligations with respect to the Notes shall not include fees or indemnifications in favor of the Trustee and other third parties other than the Holders of the Notes.

Offering Memorandum ” means the offering memorandum, dated November 30, 2010, relating to the exchange of the Existing Notes for the New Notes, as supplemented by Supplement No. 1 dated December 6, 2010, Supplement No. 2 dated December 10, 2010, Supplement No. 3 dated December 13, 2010 and Supplement No. 4 dated December 15, 2010.

Officer ” means the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Issuer. “Officer” of Holdings or any Note Guarantor has a correlative meaning.

Officer’s Certificate ” means a certificate signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer that meets the requirements set forth in this Indenture. “Officer’s Certificate” of Holdings or any Note Guarantor has a correlative meaning.

Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer, Holdings, a Note Guarantor or the Trustee.

Original Issue Date ” means April 10, 2007.

Permitted Holders ” means, at any time, each of the Sponsors and members of the Management Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

Permitted Junior Securities ” means unsecured debt or Equity Interests of the Issuer or any Note Guarantor or any successor corporation issued pursuant to a plan of reorganization or readjustment of the Issuer or any Note Guarantor, as applicable, that are subordinated to the payment of all then outstanding Senior Indebtedness of the Issuer or any Note Guarantor, as applicable (and any debt securities issued in exchange for Senior Indebtedness), at least to the same extent that the Notes and the related Note Guarantee are subordinated to the payment of all Senior Indebtedness of the Issuer or any Note Guarantor, as applicable, on the Issue Date, so long as to the extent that any Senior Indebtedness of the Issuer or any Note Guarantor, as applicable, outstanding on the date of consummation of any such plan of reorganization or readjustment is not paid in full in cash on such date, the holders of any such Senior Indebtedness not so paid in full in cash have consented to the terms of such plan of reorganization or readjustment.

Permitted Securitization Financing ” has the meaning ascribed to it in the New Senior Subordinated Note Indenture.

 

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Person ” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

Preferred Stock ” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.

“Qualified Exchange ” means the NASDAQ Global Select Market, the NASDAQ Global Market or the New York Stock Exchange or any successor exchange to the foregoing.

Qualified Public Offering ” means an underwritten public offering of Common Stock by Holdings or any selling stockholders pursuant to an effective registration statement filed by Holdings with the SEC (other than (a) a registration relating solely to an employee benefit plan or employee stock plan, a dividend reinvestment plan, or a merger or a consolidation, (b) a registration incidental to an issuance of securities under Rule 144A, (c) a registration on Form S-4 or any successor form, or (d) 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 Holdings and/or selling stockholders) sold in such offering (together with the aggregate offering prices from any prior such offerings) is at least $200 million and the listing of Common Stock on a Qualified Exchange.

Qualified Public Offering Effective Date ” means the date on which the registration statement related to the relevant Qualified Public Offering becomes effective.

Record Date ” for interest or Additional Interest, if any, payable on any applicable Interest Payment Date means April 1 or October 1 (whether or not a Business Day) next preceding such Interest Payment Date.

Registration Rights Agreement ” means the Registration Rights Agreement in respect of the Notes, dated as of the Issue Date, among the Dealer Managers, the Issuer, Holdings and the Note Guarantors.

Representative ” means the trustee, agent or representative (if any) for an issue of Senior Indebtedness or Designated Senior Indebtedness, as applicable; provided that if, and for so long as, such Senior Indebtedness lacks such a Representative, then the Representative for such Senior Indebtedness shall at all times constitute the holder or holders of a majority in outstanding principal amount of obligations under such Senior Indebtedness.

Restricted Notes Legend ” means the legend set forth in Section 2.3(d)(i) of Appendix A to this Indenture.

SEC ” means the Securities and Exchange Commission.

Secured Indebtedness ” means any Indebtedness secured by a Lien.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Securitization Repurchase Obligation ” has the meaning ascribed to it in the New Senior Subordinated Note Indenture.

Senior Indebtedness ” with respect to the Issuer or any of the Note Guarantors means all Indebtedness and any Securitization Repurchase Obligation of the Issuer or any such Note Guarantor,

 

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including interest thereon (including interest accruing on or after the filing of any petition in bankruptcy or similar proceeding or for reorganization relating to the Issuer or any Note Guarantor at the rate specified in the documentation with respect thereto whether or not a claim for post-filing interest is allowed in such proceeding) and other amounts (including fees, expenses, reimbursement obligations under letters of credit and indemnities) owing in respect thereof, whether outstanding on the Issue Date or thereafter Incurred, unless the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such obligations are subordinated in right of payment to any other Indebtedness of the Issuer or such Note Guarantor, as applicable; provided , however , that Senior Indebtedness shall not include, as applicable:

(1) any obligation of the Issuer to any Subsidiary of the Issuer (other than any Securitization Repurchase Obligation) or of any Note Guarantor to the Issuer or any other Subsidiary of the Issuer,

(2) any liability for federal, state, local or other taxes owed or owing by the Issuer or such Note Guarantor,

(3) any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities),

(4) any Indebtedness or obligation of the Issuer or any Note Guarantor that by its terms is subordinate or junior in any respect (excluding the intercreditor arrangements benefiting the lenders under the Apple Ridge Documents) to any other Indebtedness or obligation of the Issuer or such Note Guarantor, as applicable, including any Senior Subordinated Pari Passu Indebtedness,

(5) any obligations with respect to any Capital Stock, or

(6) any Indebtedness Incurred in violation of this Indenture but, as to any such Indebtedness Incurred under the Credit Agreement, no such violation shall be deemed to exist for purposes of this clause (6) if the holders of such Indebtedness under the Credit Agreement, or their Representative shall have received an Officer’s Certificate to the effect that the Incurrence of such Indebtedness does not (or, in the case of a revolving credit facility thereunder, the Incurrence of the entire committed amount thereof at the date on which the initial borrowing thereunder is made, would not) violate this Indenture.

If any Senior Indebtedness is disallowed, avoided or subordinated pursuant to the provisions of Section 548 of Title 11 of the United States Code or any applicable state fraudulent conveyance law, such Senior Indebtedness nevertheless will constitute Senior Indebtedness.

Senior Subordinated Pari Passu Indebtedness ” means:

(1) with respect to the Issuer, the Notes and any Indebtedness that ranks pari passu in right of payment to the Notes (including the Existing Senior Subordinated Notes and the New Senior Subordinated Notes); and

(2) with respect to any Note Guarantor, its Note Guarantee and any Indebtedness that ranks pari passu in right of payment to such Note Guarantor’s Note Guarantee (including such Note Guarantor’s guarantees of the Existing Senior Subordinated Notes and the New Senior Subordinated Notes).

 

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Separation and Distribution Agreement ” means the Separation and Distribution Agreement by and among Cendant, the Issuer, Travelport Inc. and Wyndham Worldwide Corporation, dated as of July 27, 2006.

Shelf Registration Statement ” means the Shelf Registration Statement as defined in the Registration Rights Agreement.

Series A Convertible Notes ” means the Issuer’s 11.00% Series A Convertible Senior Subordinated Notes Due 2018.

Series B Convertible Notes ” means the Issuer’s 11.00% Series B Convertible Senior Subordinated Notes Due 2018.

Series C Convertible Notes ” means the Issuer’s 11.00% Series C Convertible Senior Subordinated Notes Due 2018.

Significant Subsidiary ” means any Subsidiary of the Issuer that would be a “Significant Subsidiary” of the Issuer within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC, as such Regulation is in effect on the Issue Date.

Specified Merger/Transfer Transaction ” means a merger, consolidation or amalgamation by the Issuer with an Affiliate incorporated solely for the purpose of reincorporating the Issuer in another state of the United States, the District of Columbia or any territory of the United States or a conversion of the Issuer into a limited liability company (provided that a co-obligor of the Notes is a corporation), so long as the amount of Indebtedness, Disqualified Stock and Preferred Stock of the Issuer and its Subsidiaries is not increased thereby.

Special Purpose Securitization Subsidiary ” has the meaning ascribed to it in the New Senior Subordinated Note Indenture.

Sponsors ” means (i) (x) one or more investment funds controlled by Apollo Management, L.P. and (y) Apollo Management, L.P. and its Affiliates (collectively, the “Apollo Sponsors”) and (ii) any Person that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) with any Apollo Sponsors; provided that in the case of clause (ii), any Apollo Sponsor (x) owns a majority of the voting power of such group and (y) controls a majority of the Board of Directors of the Issuer.

Stated Maturity ” means April 15, 2018.

Subordinated Indebtedness ” means (a) with respect to the Issuer, any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the Notes and (b) with respect to any Note Guarantor, any Indebtedness of such Note Guarantor which is by its terms subordinated in right of payment to its Note Guarantee.

Subsidiary ” means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total ordinary voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof (or persons performing similar functions) is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company or similar entity of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or

 

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general or limited partnership interests, as applicable, is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

TIA ” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of this Indenture.

Transfer Restricted Notes ” means Definitive Notes and any other Notes that bear or are required to bear the Restricted Notes Legend.

Trust Officer ” means:

(1) any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject, and

(2) who shall have direct responsibility for the administration of this Indenture.

Trustee ” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

Voting Stock ” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

Wholly Owned Subsidiary ” of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or shares required to be held by foreign nationals) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.

Section 1.02.  Other Definitions .

 

Term

  

Defined in
Section

“Adjustment Event”

   8.05(k)

“Agent Members”

   2.1(d) of Appendix A

“ARF”

   11.07

“ARSC”

   11.07

“Authentication Order”

   2.02

“Automatic Exchange”

   2.3(h) of Appendix A

“Automatic Exchange Date”

   2.3(h) of Appendix A

“Automatic Exchange Notice”

   2.3(h) of Appendix A

 

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Term

  

Defined in
Section

“Automatic Exchange Notice Date”

   2.3(h) of Appendix A

“Blockage Notice”

   10.03

“Cartus”

   11.07

“CFC”

   11.07

“Change of Control Expiration Time”

   4.08(b)

“Change of Control Offer”

   4.08(b)

“Change of Control Payment”

   4.08(a)

“Change of Control Payment Date”

   4.08(b)

“Commission”

   1.03

“Common Stock Record Date”

   8.05(h)

“Conversion Agent”

   2.03

“Conversion Date”

   8.02

“Convertible Securities”

   8.05(g)

“Current Market Price”

   8.05(h)

“DTC”

   2.03

“Determination Date”

   8.05(k)

“Distributed Property”

   8.05(d)

“Election Form”

   4.08(c)

“Event of Default”

   6.01

“Ex-date”

   8.05(h)

“Expiration Time”

   8.05(e)

“Guarantee Blockage Notice”

   13.03

“Guarantee Payment Blockage Period”

   13.03

“Global Note”

   2.1(b) of Appendix A

“Holdings Guarantee Blockage Notice”

   14.03

“Holdings Guarantee Payment Blockage Period”

   14.03

“Holdings Non-Payment Default”

   14.03

“Holdings Payment Default”

   14.03

“Holdings Permitted Junior Securities”

   14.02

“IAI”

   1.1(a) of Appendix A

“IAI Global Note”

   2.1(b) of Appendix A

“indenture securities”

   1.03

“indenture security Holder”

   1.03

“indenture to be qualified”

   1.03

“indenture trustee”

   1.03

“Indenture Trustee”

   11.07

“Institutional Accredited Investor Notes”

   1.1(a) of Appendix A

“Market Disruption Event”

   8.05(h)

“Non-Payment Default”

   10.03

“Note Guarantor Non-Payment Default”

   13.03

“Note Guarantor Payment Default”

   13.03

“Note Register”

   2.03

“obligor”

   1.03

“OID Legend”

   2.3(d)(i) of

 

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Term

  

Defined in
Section

   Appendix A

“Paying Agent”

   2.03

“pay its Note Guarantee”

   13.03

“pay its Holdings Guarantee”

   14.03

“pay the Notes”

   10.03

“Payment Blockage Period”

   10.03

“Payment Default”

   10.03

“Pool Assets”

   11.07

“Pricing Date”

   8.05(g)

“Purchase Agreement”

   1.01

“Purchased Shares”

   8.05(e)

“QIB”

   1.1(a) of Appendix A

“Reference Property”

   8.06

“Redemption Price”

   3.07(a)

“Registrar”

   2.03

“Receivables Purchase Agreement”

   1.01

“Restricted Note”

   2.3(h) of Appendix A

“Rule 501”

   1.1(a) of Appendix A

“Rule 144”

   1.1(a) of Appendix A

“Rule 144A”

   1.1(a) of Appendix A

“Rule 144A Global Note”

   2.1(b) of Appendix A

“Rule 144A Notes”

   1.1(a) of Appendix A

“Spinoff Valuation Period”

   8.05(d)

“Successor Company”

   5.01

“Trading Day”

   8.05(h)

“Transfer and Servicing Agreement”

   1.01

“Trigger Event”

   8.05(d)

“Underlying Shares”

   8.05(b)

“Unrestricted Note”

   2.3(h) of Appendix A

Section 1.03.  Incorporation by Reference of TIA .

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.

The following TIA terms used in this Indenture have the following meanings:

“Commission” means the SEC;

“indenture securities” means the Notes;

 

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“indenture security Holder” means a Holder of a Note;

“indenture to be qualified” means this Indenture;

“indenture trustee” or “institutional trustee” means the Trustee; and

“obligor” on the Notes, the Holdings Guarantee and the Note Guarantees means the Issuer, Holdings and the Note Guarantors, respectively, and any successor obligor upon the Notes, the Holdings Guarantee and the Note Guarantees, respectively.

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

Section 1.04.  Rules of Construction .

Unless the context otherwise requires:

(i) a term has the meaning assigned to it;

(ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(iii) “or” is not exclusive;

(iv) words in the singular include the plural, and in the plural include the singular;

(v) “will” shall be interpreted to express a command;

(vi) provisions apply to successive events and transactions;

(vii) references to sections of, or rules under, the Securities Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

(viii) unless the context otherwise requires, any reference to an “Article,” “Section” or “clause” refers to an Article, Section or clause, as the case may be, of this Indenture;

(ix) (1) unsecured Indebtedness shall not be deemed to be subordinated or junior to Secured Indebtedness merely because it is unsecured, (2) Senior Indebtedness shall not be deemed to be subordinated or junior to any other Senior Indebtedness merely because it has a junior priority with respect to the same collateral and (3) Indebtedness that is not guaranteed shall not be deemed to be subordinated or junior to Indebtedness that is guaranteed merely because of such guarantee; and

(x) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not any particular Article, Section, clause or other subdivision.

 

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Section 1.05.  Acts of Holders .

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Proof of execution of any such instrument or of a writing appointing any such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section 1.05.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

(c) The ownership of Notes shall be proved by the Note Register.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

(e) The Issuer may, in the circumstances permitted by the TIA, set a record date for purposes of determining the identity of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or take any other act, or to vote or consent to any action by vote or consent authorized or permitted to be given or taken by Holders. Unless otherwise specified, if not set by the Issuer prior to the first solicitation of a Holder made by any Person in respect of any such action, or in the case of any such vote, prior to such vote, any such record date shall be the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee prior to such solicitation.

(f) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each such different part.

(g) Without limiting the generality of the foregoing, a Holder, including DTC that is the Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and DTC that is the Holder of a Global Note may provide its proxy or proxies to the beneficial owners of interests in any such Global Note through such depositary’s standing instructions and customary practices.

 

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(h) The Issuer may fix a record date for the purpose of determining the Persons who are beneficial owners of interests in any Global Note held by DTC entitled under the procedures of such depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other action shall be valid or effective if made, given or taken more than 90 days after such record date.

ARTICLE 2

THE NOTES

Section 2.01.  Form and Dating; Terms .

(a) General . Provisions relating to the Notes are set forth in Appendix A , which is hereby incorporated in and expressly made a part of this Indenture. The Notes and the Trustee’s certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuer, Holdings or any Note Guarantor is subject, if any, or usage ( provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Note shall be dated the date of its authentication. The Notes shall be issued in Authorized Denominations.

(b) Terms . The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is limited to $2.12 billion.

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Issuer, Holdings, the Note Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

Section 2.02.  Execution and Authentication .

At least one Officer shall execute the Notes on behalf of the Issuer by manual or facsimile signature.

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid.

A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated substantially in the form of Exhibit A attached hereto by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been duly authenticated and delivered under this Indenture.

On the Issue Date, the Trustee shall, upon receipt of an Issuer Order (an “ Authentication Order ”), authenticate and deliver the Notes.

 

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The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Issuer.

Section 2.03.  Registrar, Conversion Agent and Paying Agent .

The Issuer shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“ Registrar ”), an office or agency where Notes may be presented for conversion (“ Conversion Agent ”) and an office or agency where Notes may be presented for payment (“ Paying Agent ”). The Registrar shall keep a register of the Notes (“ Note Register ”) and of their transfer and exchange. The Issuer may appoint one or more co-registrars, one or more additional conversion agents and one or more additional paying agents. The term “ Registrar ” includes any co-registrar, the term “ Conversion Agent ” includes any additional conversion agent and the term “ Paying Agent ” includes any additional paying agent. The Issuer may change any Paying Agent, Conversion Agent or Registrar without prior notice to any Holder. The Issuer shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Registrar, Conversion Agent or Paying Agent, the Trustee shall act as such. The Issuer or any of its Wholly Owned Subsidiaries may act as Paying Agent, Conversion Agent or Registrar.

The Issuer initially appoints The Depository Trust Company (“ DTC ”) to act as Depositary with respect to the Global Notes.

The Issuer initially appoints the Trustee to act as the Paying Agent, Conversion Agent and Registrar for the Notes and to act as Custodian with respect to the Global Notes.

Section 2.04.  Paying Agent to Hold Money in Trust .

The Issuer shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, or Additional Interest, if any, or interest on the Notes, and will notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Wholly Owned Subsidiary of the Issuer) shall have no further liability for the money. If the Issuer or a Wholly Owned Subsidiary of the Issuer acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee shall serve as Paying Agent for the Notes.

Section 2.05.  Holder Lists .

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least two Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes, and the Issuer shall otherwise comply with TIA Section 312(a).

 

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Section 2.06.  Transfer and Exchange .

(a) The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with Appendix A .

(b) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

(c) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Issuer may require the Holders to pay any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 4.08 and 9.05 hereof).

(d) Neither the Registrar nor the Issuer shall be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

(e) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

(f) The Issuer shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between a Record Date and the next succeeding Interest Payment Date.

(g) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest (including Additional Interest, if any) on such Notes, for conversion of such Note, and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.

(h) Upon surrender for registration of transfer of any Note at the office or agency of the Issuer designated pursuant to Section 4.02 hereof, the Issuer shall execute, and the Trustee shall authenticate and mail, in the name of the designated transferee or transferees, one or more replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.

(i) At the option of the Holder, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and mail, the replacement Global Notes and Definitive Notes which the Holder making the exchange is entitled to in accordance with the provisions of Section 2.02 hereof.

 

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(j) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

Section 2.07.  Replacement Notes .

If any mutilated Note is surrendered to the Trustee, the Registrar or the Issuer and the Trustee receives evidence to its satisfaction of the ownership and destruction, loss or theft of any Note, the Issuer shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Issuer, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuer and the Trustee may charge for their expenses in replacing a Note.

Every replacement Note is a contractual obligation of the Issuer and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

Section 2.08.  Outstanding Notes .

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Note.

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.

If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

If the Paying Agent (other than the Issuer, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date and/or the Conversion Agent (other than the Issuer, a Subsidiary of the Issuer or an Affiliate of any thereof) holds, on a redemption date or maturity date, shares of Common Stock deliverable in respect of Notes converted on or prior to that date, as applicable, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.

Section 2.09.  Treasury Notes .

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, subject to Section 9.02, Notes owned by the Issuer or, if required by the applicable law, by any Affiliate of the Issuer shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Trust Officer of the Trustee actually knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right to deliver any such direction, waiver or consent with respect to the Notes and that the pledgee is not the Issuer or any obligor upon the Notes or, if required by the applicable law, any Affiliate of the Issuer or of such other obligor.

 

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The Issuer may, to the extent permitted by law, at any time, and from time to time, repurchase Notes in the open market or otherwise at any price or prices. Any Notes repurchased by the Issuer may, to the extent permitted by law, be held and converted by the Issuer in accordance with this Indenture or may, at the Issuer’s option, be surrendered to the Trustee for cancellation. Any Notes repurchased by the Issuer may not be reissued or resold unless registered under the Securities Act. Any Notes surrendered for cancellation shall be promptly cancelled. Any Notes held by the Issuer or one of its Subsidiaries shall be disregarded for voting purposes in connection with any notice, waiver, consent or direction requiring the vote or concurrence of Noteholders.

Section 2.10.  Temporary Notes .

Until certificates representing Notes are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Issuer considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes.

Holders and beneficial holders, as the case may be, of temporary Notes shall be entitled to all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this Indenture.

Section 2.11.  Cancellation .

The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar, the Conversion Agent and the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange, conversion or payment. The Trustee or, at the direction of the Trustee, the Registrar, the Conversion Agent or the Paying Agent and no one else shall cancel all Notes surrendered for registration of transfer, exchange, conversion, payment, replacement or cancellation and shall destroy cancelled Notes in accordance with its customary procedures (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all cancelled Notes shall upon the written request of the Issuer be delivered to the Issuer. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.

Section 2.12.  Defaulted Interest .

If the Issuer defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Issuer shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such defaulted interest as provided in this Section 2.12. The Trustee shall fix or cause to be fixed each such special record date and payment date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. The Trustee shall promptly notify the Issuer of such special record date. At least 15 days before the special record date, the Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) shall mail or cause to be mailed, first-class postage prepaid, to each Holder a

 

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notice at his or her address as it appears in the Note Register that states the special record date, the related payment date and the amount of such interest to be paid.

Subject to the foregoing provisions of this Section 2.12 and for greater certainty, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.

Section 2.13.  CUSIP Numbers .

The Issuer in issuing the Notes may use CUSIP numbers (if then generally in use) and, if so, the Trustee shall use CUSIP numbers in notices of redemption as a convenience to Holders; provided , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will as promptly as practicable notify the Trustee in writing of any change in the CUSIP numbers.

Section 2.14. Calculation of Principal Amount of Notes .

The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes at such date of determination. With respect to any matter requiring consent, waiver, approval or other action of the Holders of a specified percentage of the principal amount of all the Notes, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes, the Holders of which have so consented, by (b) the aggregate principal amount, as of such date of determination, of the Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.08 and Section 2.09 of this Indenture. Any such calculation made pursuant to this Section 2.14 shall be made by the Issuer and delivered to the Trustee pursuant to an Officer’s Certificate.

ARTICLE 3

REDEMPTION

Section 3.01.  Notices to Trustee .

If the Issuer elects to redeem Notes pursuant to Section 3.07 hereof, it shall furnish to the Trustee, at least 5 Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to Section 3.03 hereof but not more than 70 days before a redemption date, an Officer’s Certificate setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of the Notes to be redeemed and (iv) the Redemption Price.

Section 3.02.  Selection of Notes to Be Redeemed .

If less than all of the Notes are to be redeemed at any time, the Trustee shall select the Notes to be redeemed (a) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed or (b) on a pro rata basis or, to the extent that selection on a pro rata basis is not practicable, by lot or by such other method the Trustee shall deem fair and appropriate in accordance with the procedures of DTC, and in each case, such manner as complies with applicable legal requirements. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less

 

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than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption.

The Trustee shall promptly notify the Issuer in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected shall be in Authorized Denominations. Notes that are not in Authorized Denominations shall not be redeemed in part, except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not in Authorized Denominations, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption shall also apply to portions of Notes called for redemption. If any Note selected for partial redemption is submitted for conversion in part after such selection, the portion of such Note submitted for conversion shall be deemed (so far as may be possible) to be the portion to be selected for redemption and shall be so converted.

Upon any redemption of less than all of the outstanding Notes, the Issuer and the Trustee may (but need not), solely for purposes of determining the pro rata allocation among such Notes as are unconverted and outstanding at the time of redemption, treat as outstanding any Notes surrendered for conversion during the period of 15 days next preceding the mailing of a notice of redemption and may (but need not) treat as outstanding any Note authenticated and delivered during such period in exchange for the unconverted portion of any Note converted in part during such period.

Section 3.03.  Notice of Redemption .

The Issuer shall mail or cause to be mailed by first-class mail, postage prepaid (or electronically transmit), notices of redemption at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at such Holder’s registered address or otherwise in accordance with the procedures of DTC. Notice may be delivered prior to the consummation of a Qualified Public Offering, may specify that the redemption date will be the Qualified Public Offering Effective Date, shall specify that Holders may convert their Notes prior to redemption and shall summarize the relevant conversion procedures. Notices of redemption may not be conditional (provided that a notice of redemption may state that the redemption date will be the Qualified Public Offering Effective Date).

The notice shall identify the Notes to be redeemed and shall state:

(i) the redemption date (which shall be a Business Day);

(ii) the Redemption Price;

(iii) if any Note is to be redeemed in part only, the portion of the principal amount of that Note that is to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion of the original Note representing the same indebtedness to the extent not redeemed will be issued in the name of the Holder of the Notes upon cancellation of the original Note;

(iv) the name and address of the Paying Agent;

(v) that Notes called for redemption must be surrendered to the Paying Agent to collect the Redemption Price;

 

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(vi) that, unless the Issuer defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;

(vii) that the Notes called for redemption are being redeemed pursuant to Section 3.07;

(viii) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes;

(ix) the current Conversion Rate for each series of Notes and that, unless the Issuer defaults in making the redemption payment, the right to convert such Notes or portions thereof into Common Stock will expire at the close of business on the Business Day immediately preceding the redemption date; and

(x) a summary of the procedures to convert Notes.

At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at the Issuer’s expense; provided that the Issuer shall have delivered to the Trustee, at least 5 Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to this Section 3.03 (unless a shorter notice shall be agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

Concurrently with the mailing of any such notice of redemption, the Issuer shall issue a press release announcing such redemption, the form and content of which press release shall be determined by the Issuer in its sole discretion.

Section 3.04.  Effect of Notice of Redemption .

Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption, unless a notice of conversion into Common Stock has been submitted pursuant to the terms hereof and the other requirements of Section 8.02 have been satisfied, become irrevocably due and payable on the redemption date at the Redemption Price. The notice, if mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note.

Section 3.05.  Deposit of Redemption or Purchase Price .

Prior to 10:00 a.m. (New York City time) on the redemption or Change of Control Payment Date, the Issuer shall deposit with the Trustee or with the Paying Agent (or, if the Issuer or a Wholly Owned Subsidiary of the Issuer is acting as a Paying Agent, set aside, segregate and hold in trust as provided in Section 2.04) money sufficient to pay the redemption price of and accrued and unpaid interest (including Additional Interest, if any) or the Change of Control Payment on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the Redemption Price of, and accrued and unpaid interest on, or the Change of Control Payment on all Notes to be redeemed or purchased. Any such excess money segregated and held in trust by the Issuer or a Wholly Owned Subsidiary of the Issuer shall be discharged from such trust.

 

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If the Issuer complies with the provisions of the preceding paragraph, on and after the redemption date or Change of Control Payment Date, interest shall cease to accrue on the Notes or the portions of Notes so redemed or purchased, and, after the close of business on the Business Day immediately preceding such redemption date or Change of Control Payment Date (unless the Issuer shall default in the payment of such Notes at the Redemption Price, together with interest (including Additional Interest, if any) accrued to, but excluding, the redemption date, or at the Change of Control Payment) such Notes shall cease to be convertible into Common Stock. If a Note is redeemed or purchased on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest to the redemption date or Change of Control Payment Date shall be paid to the Person in whose name such Note was registered at the close of business on such Record Date. If any Note to be redeemed or purchased shall not be so paid upon surrender for redemption or purchase because of the failure of the Issuer to comply with the preceding paragraph, interest (including Additional Interest, if any) shall be paid on the unpaid principal, from the redemption date or Change of Control Payment Date until such principal is paid, and to the extent lawful on any interest accrued but not paid to the redemption date or Change of Control Payment Date on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof, and such Note shall remain convertible into Common Stock until the Redemption Price or Change of Control Payment and such interest (including Additional Interest, if any) shall have been paid or duly provided for.

Section 3.06.  Notes Redeemed or Purchased in Part .

Upon surrender of a Note that is redeemed or purchased in part, the Issuer shall issue and the Trustee shall authenticate for the Holder at the expense of the Issuer a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered representing the same indebtedness to the extent not redeemed or purchased; provided that each new Note will be in an Authorized Denomination. It is understood that, notwithstanding anything in this Indenture to the contrary, only an Authentication Order and not an Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate such new Note.

Section 3.07.  Optional Redemption .

(a) Upon a Qualified Public Offering and at any time thereafter, the Notes may be redeemed at the option of the Issuer, in whole or in part, upon notice as set forth in Section 3.03 at a redemption price (the “ Redemption Price ”), payable in cash, equal to 90% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest (including Additional Interest, if any) to, but excluding, the date fixed for redemption.

(b) Except pursuant to clause (a) of this Section 3.07, the Notes will not be redeemable at the Issuer’s option.

(c) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

Section 3.08.  Mandatory Redemption .

The Issuer shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes.

 

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ARTICLE 4

COVENANTS

Section 4.01.  Payment of Notes .

The Issuer shall pay or cause to be paid the principal of, premium, if any, Additional Interest, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, Additional Interest, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Issuer or a Wholly Owned Subsidiary of the Issuer, holds as of noon (New York City time) on the due date money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, Additional Interest, if any, and interest then due.

The Issuer shall pay all Additional Interest, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement.

The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal, if any, from time to time on demand at the rate equal to 2% per annum in excess of 11.00% to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest (without regard to any applicable grace period), if any, from time to time on demand at the rate equal to 2% per annum in excess of 11.00% to the extent lawful.

Section 4.02.  Maintenance of Office or Agency .

The Issuer shall maintain, or cause the Trustee to maintain, an office (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where the Issuer will pay the principal and premium, if any, on the Notes and where Holders may present the Notes for conversion, registration of transfer or exchange for other denominations and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

Subject to the preceding paragraph, the Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency for such purposes. The Issuer shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Issuer hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Issuer in accordance with Section 2.03 hereof.

Section 4.03.  Reports and Other Information .

(a) The Issuer shall deliver to the Trustee copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) that the Issuer is required to file with the SEC pursuant to Section

 

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13 or 15(d) of the Exchange Act within 15 days after the Issuer files such reports, information and documents with the SEC.

Notwithstanding the foregoing, all required reports, information and documents referred to in this Section 4.03(a) shall be deemed to be delivered to the Trustee at the time when (i) the Issuer has filed such reports, information and documents with the SEC via the EDGAR filing system (or any successor system) and (ii) such reports are publicly available.

(b) Holdings and the Issuer will furnish to the Holders, beneficial holders and prospective purchasers of the Notes and the Common Stock into which the Notes are convertible, upon their request, the information, if any, required by Rule 144A(d)(4) under the Securities Act until such time as these securities are no longer “restricted securities” within the meaning of Rule 144 under the Securities Act.

Section 4.04.  Compliance Certificate .

The Issuer, Holdings and each Note Guarantor (to the extent that Holdings or such Note Guarantor is so required under the TIA) shall deliver to the Trustee, within 120 days after the end of each fiscal year ending after the Issue Date, a certificate from the principal executive officer, principal financial officer or principal accounting officer stating, as to such Officer signing such certificate, that to the best of his or her knowledge, the Issuer has complied with each and every condition and covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions, covenants and conditions of this Indenture (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action the Issuer is taking or proposes to take with respect thereto). The Issuer, Holdings and the Note Guarantors shall also comply with Section 314(a)(4) of the TIA.

Section 4.05.  Note Guarantors

The Issuer shall cause each Subsidiary that is a guarantor on the Issue Date, or becomes a guarantor, under the New Senior Subordinated Note Indenture, to execute and deliver to the Trustee either this Indenture on the Issue Date or a supplemental indenture, substantially in the form of Exhibit C , pursuant to which such Subsidiary shall become a Note Guarantor. In addition, if requested by the Trustee, such Subsidiary shall deliver to the Trustee an Opinion of Counsel to the effect that:

(a) such Note Guarantee has been duly executed and authorized; and

(b) such Note Guarantee constitutes a valid, binding and enforceable obligation of such Subsidiary, except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without limitation, all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principles of equity.

Section 4.06.  Stay, Extension and Usury Laws .

The Issuer, Holdings and each of the Note Guarantors covenant (to the extent that they may lawfully do so) that they shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer, Holdings and each of the Note Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant that they shall not, by resort to any such

 

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law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.

Section 4.07.  Corporate Existence .

Subject to Article 5 hereof, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence in accordance with its organizational documents (as the same may be amended from time to time) and (ii) its rights (charter and statutory), licenses and franchises; provided that the Issuer shall not be required to preserve any such right, license or franchise if the Issuer in good faith shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer and its Subsidiaries, taken as a whole.

Section 4.08.  Offer to Repurchase Upon Change of Control .

(a) Upon a Change of Control, each Holder shall have the right to require the Issuer to repurchase all or any part of such Holder’s Notes at a purchase price in cash (the “ Change of Control Payment ”) equal to 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to, but excluding, the date of repurchase, in accordance with the terms contemplated in this Section 4.08; provided , however , that notwithstanding the occurrence of a Change of Control, the Issuer shall not be obligated to purchase any Notes pursuant to this Section 4.08 in the event that the Issuer has exercised its right to redeem such Notes in accordance with Section 3.07 of this Indenture; and provided further , that if the Issuer designates a repurchase date following a Change of Control that is after a Record Date and on or prior to the corresponding Interest Payment Date, the Issuer shall pay the full amount of accrued and unpaid interest payable on such Interest Payment Date on the Notes being repurchased to the Holder of record at the close of business on the corresponding Record Date.

In the event that at the time of such Change of Control the terms of the Bank Indebtedness and/or other Senior Indebtedness restrict or prohibit the repurchase of Notes pursuant to this Section 4.08, then prior to the mailing or transmission of the notice to the Holders provided for in Section 4.08(b) but in any event within 30 days following any Change of Control, the Issuer shall (i) repay in full all Bank Indebtedness and/or such other Senior Indebtedness or, if doing so will allow the purchase of Notes, offer to repay in full all Bank Indebtedness and/or such other Senior Indebtedness, as the case may be, and repay the Bank Indebtedness and/or such other Senior Indebtedness of each lender or holder, as the case may be, who has accepted such offer, or (ii) obtain the requisite consent under the agreements governing the Bank Indebtedness and/or such other Senior Indebtedness to permit the repurchase of the Notes as provided for in Section 4.08(b).

(b) Prior to the consummation of any Change of Control, except to the extent that the Issuer has exercised its right to redeem the Notes in accordance with Section 3.07 of this Indenture, the Issuer shall mail or electronically transmit a notice (a “ Change of Control Offer ”) to each Holder to the address of such Holder appearing in the Note Register with a copy to the Trustee, or otherwise in accordance with the procedures of DTC, with the following information:

(1) the events constituting the Change of Control;

(2) the date of the Change of Control;

(3) that the Holder must exercise the repurchase right prior to the close of business on the Business Day immediately preceding the repurchase date (such time, the “ Change of Control Expiration Time ”, and such date, the “ Change of Control Payment Date ”), which date

 

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shall not be less than 45 or more than 60 days after the date of mailing of the Change of Control Offer;

(4) the price at which the Issuer shall be obligated to repurchase Notes and the Change of Control Payment Date, as applicable;

(5) that Holders may convert their Notes prior to the Change of Control Expiration Time and shall summarize the relevant conversion procedures;

(6) the name and address of the Paying Agent and the Conversion Agent;

(7) the current Conversion Rate for each series of Notes;

(8) that the Holder can only convert surrendered Notes if the Holder withdraws any Notes surrendered prior to the Change of Control Expiration Time in accordance with the terms of the Indenture;

(9) the procedures that Holders must follow to require the Issuer to purchase their Notes and to withdraw any surrendered Notes, if applicable;

(10) the CUSIP number or numbers of the Notes (if then generally in use);

(11) that if the Issuer is repurchasing less than all of the Notes, the Holders of the remaining Notes will be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portions of the Notes surrendered; the unpurchased portions of the Notes must be in Authorized Denominations; and

(12) the other instructions, as determined by the Issuer, consistent with this Section 4.08, that a Holder must follow in order to have its Notes purchased.

The notice, if mailed or electronically transmitted in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. If (i) the notice is mailed or electronically transmitted in a manner herein provided and (ii) any Holder fails to receive such notice or a Holder receives such notice but it is defective, such Holder’s failure to receive such notice or such defect shall not affect the validity of the proceedings for the purchase of the Notes as to all other Holders that properly received such notice without defect. The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Indenture by virtue thereof.

(c) For the Notes to be so repurchased at the option of the Holder, the Holder shall deliver to the Issuer or its designated agent, on or before the Change of Control Payment Date, the form entitled “Option of Holder to Elect Purchase” (the “ Election Form ”) and any Notes to be repurchased, duly endorsed for transfer. The Issuer may require the Holder to pay any tax, assessment or other governmental charge payable as a result of any transfer or exchange of the Notes by reason of such repurchase.

The Election Form shall state:

 

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(1) if certificated Notes have been issued, the Notes’ certificate numbers (or, if the Notes are not certificated, the Holder’s Election Form shall comply with appropriate DTC procedures);

(2) the portion of the principal amount of Notes that the Holder will deliver to be purchased, which portion must be in an Authorized Denomination; and

(3) that the Notes shall be purchased pursuant to the terms and conditions specified in this Section 4.08.

(d) On the Change of Control Payment Date, the Issuer shall, to the extent permitted by law,

(1) accept for payment all Notes issued by it or portions thereof properly tendered pursuant to the Change of Control Offer;

(2) deposit with the Paying Agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered; and

(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Issuer.

Payment of the Change of Control Payment for a Note for which an Election Form has been delivered and not withdrawn is conditioned upon book-entry transfer or delivery of such Note, together with necessary endorsements, to the Paying Agent at its corporate trust office in the Borough of Manhattan, The City of New York, or any other office of the Paying Agent, at any time after delivery of the Election Form. Payment of the Change of Control Payment for the Note will be made promptly following the later of the Change of Control Payment Date and the time of book-entry transfer or delivery of the Note. If the Paying Agent holds money sufficient to pay the Change of Control Payment payable in respect of the Note on the Business Day following the Change of Control Payment Date, then, on and after that date, (i) the Note will cease to be outstanding; (ii) interest on the Notes will cease to accrue; and (iii) all other rights of the Holder will terminate, other than the right to receive the repurchase price upon delivery of the Note.

(e) Notwithstanding anything herein to the contrary, any Holder delivering the Election Form shall have the right to withdraw such Election Form at any time prior to the close of business on the Business Day immediately preceding the Change of Control Payment Date by delivery to the Issuer or its designated agent of a written notice of withdrawal, specifying:

(1) the principal amount of the Notes with respect to which such notice of withdrawal is being submitted;

(2) if certificated Notes have been issued, the Notes’ certificate numbers (or, if the Notes are not certificated, the Election Form shall comply with appropriate DTC procedures); and

(3) the principal amount, if any, of such Notes which remains subject to the Election Form.

(f) The Issuer shall not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and

 

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otherwise in compliance with the requirements set forth in this Section 4.08 applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

(g) Notes repurchased by the Issuer pursuant to a Change of Control Offer will have the status of Notes issued but not outstanding or will be retired and canceled at the option of the Issuer. Notes purchased by a third party pursuant to the preceding clause (f) will have the status of Notes issued and outstanding, subject to Section 2.08 and Section 2.09.

(h) Notes that are not in Authorized Denominations shall not be purchased in part, except that if all of the Notes of a Holder are to be purchased, the entire outstanding amount of Notes held by such Holder, even if not in Authorized Denominations, shall be purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes to be purchased shall also apply to portions of Notes to be purchased. Other than as specifically provided in this Section 4.08, any purchase pursuant to this Section 4.08 shall be made pursuant to the provisions of Sections 3.05 and 3.06 hereof.

ARTICLE 5

SUCCESSORS

Section 5.01.  Merger, Amalgamation Consolidation or Sale of All or Substantially All Assets .

The Issuer shall not consolidate with or merge with or into any other Person or Persons, or sell, convey, transfer or lease all or substantially all of its properties or assets to any Person unless:

(1) the Issuer is the surviving Person or the resulting, surviving or transferee Person, if other than the Issuer, is organized and existing under the laws of the United States, any state thereof or the District of Columbia (the Issuer or such Person, as the case may be, being herein called the “ Successor Company ”);

(2) the Successor Company (if other than the Issuer) expressly assumes all the obligations of the Issuer under this Indenture and the Notes pursuant to supplemental indentures or other documents or instruments in form and substance reasonably satisfactory to the Trustee;

(3) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

(4) if the Successor Company is not the Issuer, each Note Guarantor, unless it is the other party to the transactions described above or as a result of the transaction shall no longer guarantee the New Senior Subordinated Notes, shall have by supplemental indenture confirmed that its Note Guarantee shall apply to such Person’s obligations under this Indenture and the Notes; and

(5) the Successor Company (if other than the Issuer) shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, sale, conveyance, transfer or lease complies with this Indenture.

 

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Section 5.02.  Successor Entity Substituted .

Upon any consolidation with, or merger of the Issuer into any Person, or any sale, conveyance, transfer or lease of all or substantially all of the assets of the Issuer in accordance with Section 5.01, the Successor Company (if other than the Issuer) will succeed to, and be substituted for, the Issuer under this Indenture and the Notes, and in such event the Issuer will automatically be released and discharged from its obligations under this Indenture and the Notes, but in the case of a lease of all or substantially all of its assets, the Issuer will not be released from the conversion obligations under this Indenture and the obligations to pay the principal of, interest and Additional Interest, if any, on the Notes.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01.  Events of Default .

An “ Event of Default ” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1) there is a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption pursuant to Article 3, upon required repurchase pursuant to Section 4.08, upon declaration or otherwise (whether or not prohibited by the subordination provisions of this Indenture);

(2) a default in any payment of any interest (including any Additional Interest) on any Note when the same becomes due and payable (whether or not prohibited by the subordination provisions of this Indenture), and such default continues for a period of 30 days;

(3) default in the Issuer’s obligation to convert any Notes following the exercise by the Holder of the right to convert such Notes into Common Stock or other property pursuant to and in accordance with Article 8, and such failure continues for a period of 5 days;

(4) default in the Issuer’s obligation to provide a Change of Control Notice on a timely basis as provided in Section 4.08, and such failure continues for a period of 5 days;

(5) the Issuer fails to comply with its obligations under Section 5.01;

(6) the Issuer or any Significant Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to the Issuer or a Subsidiary of the Issuer) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $100.0 million or its foreign currency equivalent;

(7) the Issuer or any Significant Subsidiary fails to pay final judgments aggregating in excess of $100.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days following the entry thereof;

 

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(8) the Issuer fails to comply with any of its agreements in the Notes or this Indenture (other than those referred to in clauses (1) through (5) of this Section 6.01) and such failure continues for 60 days after the notice specified below;

(9) any Note Guarantee of a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms thereof) or any Note Guarantor that qualifies as a Significant Subsidiary (or one or more Note Guarantors that, taken together as of the date of the most recent audited financial statements of the Issuer, would constitute a Significant Subsidiary) denies or disaffirms its obligations under this Indenture or any Note Guarantee and such Default continues for 10 days after the notice specified below;

(10) Holdings, the Issuer or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

(i) commences proceedings to be adjudicated bankrupt or insolvent;

(ii) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under applicable Bankruptcy law;

(iii) consents to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;

(iv) makes a general assignment for the benefit of its creditors; or

(v) generally is not paying its debts as they become due; or

(11) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief against Holdings, the Issuer or any Significant Subsidiary, in a proceeding in which Holdings, the Issuer or any such Significant Subsidiary, is to be adjudicated bankrupt or insolvent;

(ii) appoints a receiver, liquidator, assignee, trustee, sequestrator or other similar official of Holdings, the Issuer or any Significant Subsidiary, or for all or substantially all of the property of Holdings, the Issuer or any Significant Subsidiary; or

(iii) orders the liquidation of Holdings, the Issuer or any Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days.

A Default under clause (8) above shall not constitute an Event of Default until the Trustee notifies the Issuer or the Holders of at least 25% in principal amount of the outstanding Notes notify the Issuer and the Trustee of the Default and the Issuer does not cure such Default within the time specified in clause (8) after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a “Notice of Default.”

The Issuer shall deliver to the Trustee, within thirty (30) days after the occurrence thereof, written notice in the form of an Officer’s Certificate of any event which is, or with the giving of

 

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notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

Section 6.02. Acceleration .

(a) If an Event of Default (other than an Event of Default specified in clauses (10) or (11) of Section 6.01 with respect to the Issuer) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Notes, by notice to the Issuer may declare the principal of, premium, if any, and accrued but unpaid interest (including Additional Interest, if any) on all the Notes to be due and payable; provided , however , that so long as any Bank Indebtedness remains outstanding, no such acceleration shall be effective until the earlier of:

(i) five Business Days after the giving of written notice to the Issuer and the Representative under the Credit Agreement; and

(ii) the day on which any Bank Indebtedness is accelerated.

Upon such a declaration, such principal and interest (including Additional Interest, if any) shall be due and payable immediately. If an Event of Default specified in clauses (10) or (11) of Section 6.01) with respect to the Issuer occurs, the principal of, premium, if any, and interest (including Additional Interest, if any) on all the Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

In the event of any Event of Default specified in clause (6) of Section 6.01, such Event of Default and all consequences thereof (excluding, however, any resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders of the Notes, if within 20 days after such Event of Default arose the Issuer delivers an Officer’s Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of the Notes as described above be annulled, waived or rescinded upon the happening of any such events.

(b) Subject to Section 6.02(a), at any time after a declaration of acceleration with respect to the Notes, the Holders of a majority in principal amount of Notes may rescind and cancel such declaration and its consequences:

(1) if the rescission would not conflict with any judgment or decree;

(2) if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration;

(3) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid; and

(4) if the Issuer has paid the Trustee its reasonable compensation and reimbursed the Trustee for its expenses, disbursements and advances.

No such rescission shall affect any subsequent Default or impair any right consequent thereto.

 

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Section 6.03.  Other Remedies .

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes and Additional Interest, if any, or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

Section 6.04.  Waiver of Past Defaults .

Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences hereunder, except a continuing Default in the payment of the principal of, premium, if any, Additional Interest, if any, or interest on, any Note held by a non-consenting Holder (including in connection with a Change of Control Offer) or a failure to perform conversion obligations under Article 8; provided , subject to Section 6.02 hereof, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

Section 6.05.  Control by Majority .

Subject to Sections 7.01(e), 7.02(f), 7.02(k) and 7.07, Holders of a majority in principal amount of the then total outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or that would involve the Trustee in personal liability.

Section 6.06.  Limitation on Suits .

Subject to Section 6.07 hereof, no Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:

(1) such Holder has previously given the Trustee notice that an Event of Default is continuing;

(2) Holders of at least 25% in principal amount of the total outstanding Notes have requested the Trustee to pursue the remedy;

(3) Holders of the Notes have offered the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

 

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(5) Holders of a majority in principal amount of the total outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

Section 6.07.  Rights of Holders of Notes to Receive Payment and to Convert .

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, and Additional Interest, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with a Change of Control Offer) and to convert Notes in accordance with the provisions of Article 8, or to bring suit for the enforcement of any such payment on or after such respective dates or conversion rights, shall not be impaired or affected without the consent of such Holder.

Section 6.08.  Collection Suit by Trustee .

If an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount of principal of, premium, if any, and Additional Interest, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.09.  Restoration of Rights and Remedies .

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceedings, the Issuer, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding has been instituted.

Section 6.10.  Rights and Remedies Cumulative .

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07 hereof, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 6.11.  Delay or Omission Not Waiver .

No delay or omission of the Trustee or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

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Section 6.12.  Trustee May File Proofs of Claim .

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Notes including Holdings and the Note Guarantors), their creditors or their property and shall be entitled and empowered to participate as a member in any official committee of creditors appointed in such matter and to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.13.  Priorities .

If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:

(i) to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

(ii) to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, and Additional Interest, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and Additional Interest, if any, and interest, respectively; and

(iii) to the Issuer or to such party as a court of competent jurisdiction shall direct including Holdings or a Note Guarantor, if applicable.

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.13.

Section 6.14.  Undertaking for Costs .

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party

 

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litigant. This Section 6.14 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

ARTICLE 7

TRUSTEE

Section 7.01.  Duties of Trustee .

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of an Event of Default:

(1) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

(2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved in a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and

(3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

(e) The Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of the Holders of the Notes unless the Holders have

 

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offered to the Trustee indemnity or security satisfactory to the Trustee against any loss, liability or expense.

(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

Section 7.02.  Rights of Trustee .

(a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation. Any permissive right or authority granted to the Trustee shall not be construed as a mandatory duty.

(b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both subject to the other provisions of this Indenture. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer shall be sufficient if signed by an Officer of the Issuer. The Trustee shall have no duty to inquire as to the performance of the Issuer’s, Holdings’ or any Note Guarantor’s covenants herein.

(f) None of the provisions of this Indenture shall require the Trustee to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.

(g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the existence of a Default or Event of Default, the Notes and this Indenture.

(h) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

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(i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

(j) In the event the Issuer is required to pay Additional Interest, the Issuer will provide written notice to the Trustee of the Issuer’s obligation to pay Additional Interest no later than 15 days prior to the next Interest Payment Date, which notice shall set forth the amount of the Additional Interest to be paid by the Issuer. The Trustee shall not at any time be under any duty or responsibility to any Holders to determine whether the Additional Interest is payable and the amount thereof.

(k) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers or duties.

(l) The Trustee may request that the Issuer deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officer’s Certificate may be signed by any person authorized to sign an Officer’s Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.

(m) The permissive rights of the Trustee enumerated herein shall not be construed as duties.

Section 7.03.  Individual Rights of Trustee .

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

Section 7.04.  Trustee’s Disclaimer .

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuer’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

Section 7.05.  Notice of Defaults .

If a Default occurs and is continuing and if it is actually known to a Trust Officer of the Trustee, the Trustee shall mail or electronically transmit to Holders of Notes a notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default relating to the payment of principal, premium, if any, Additional Interest, if any, or interest on any Note, or a failure to perform conversion obligations under Article 8, the Trustee may withhold from the Holders notice of any continuing Default if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is

 

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in the interests of the Holders of the Notes. The Trustee shall not be deemed to know of any Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee and references a Default or Event of Default.

Section 7.06.  Reports by Trustee to Holders of the Notes .

Within 60 days after each December 31, beginning with the December 31 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c).

A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Issuer and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA Section 313(d). The Issuer shall promptly notify the Trustee when the Notes are listed on any stock exchange and of any delisting thereof.

Section 7.07.  Compensation and Indemnity .

The Issuer and the Note Guarantors, jointly and severally, shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as the parties shall agree in writing from time to time. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

The Issuer and the Note Guarantors, jointly and severally, shall indemnify the Trustee and any predecessor Trustee and their agents for, and hold the Trustee harmless against, any and all loss, damage, claims, liability or expense (including attorneys’ fees and including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) incurred by it in connection with the acceptance or administration of this trust and the performance of its duties hereunder (including the costs and expenses of enforcing this Indenture against the Issuer, Holdings or any of the Note Guarantors (including this Section 7.07) or defending itself against any claim whether asserted by any Holder, the Issuer, Holdings, any Note Guarantor or any other Person, or liability in connective with the acceptance, exercise or performance of any of its powers or duties hereunder). The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Trustee may have separate counsel and the Issuer shall pay the fees and expenses of such counsel. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee’s own willful misconduct, negligence or bad faith.

The obligations of the Issuer under this Section 7.07 shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee.

To secure the payment obligations of the Issuer and the Note Guarantors in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

 

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When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(10) or (11) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

The Trustee shall comply with the provisions of TIA Section 313(b)(2) to the extent applicable.

Section 7.08.  Replacement of Trustee .

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Holders of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuer in writing. The Issuer may remove the Trustee if:

(i) the Trustee fails to comply with Section 7.10 hereof;

(ii) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

(iii) a custodian or public officer takes charge of the Trustee or its property; or

(iv) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the Issuer’s expense), the Issuer or the Holders of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

 

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Section 7.09.  Successor Trustee by Merger, etc .

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee.

Section 7.10.  Eligibility; Disqualification .

This Indenture shall always have a Trustee who satisfies the requirements of TIA Sections 310(a)(1), (2) and (5). The Trustee is subject to TIA Section 310(b). provided , however , that there shall be excluded from the operation of TIA Section 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met.

Section 7.11.  Preferential Collection of Claims Against the Issuer .

The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein.

ARTICLE 8

CONVERSION OF NOTES

Section 8.01.  Right to Convert .

(a) Subject to the provisions of this Indenture, the Holder of any Note shall have the right, at such Holder’s option, at any time prior to the close of business on the Business Day immediately preceding April 15, 2018, to convert the principal amount of the Note, or any portion of such principal amount which is in an Authorized Denomination, into fully paid and non-assessable shares of Common Stock at the Conversion Rate for such series of Notes in effect at such time, by surrender of such Note so to be converted, in whole or in part, together with any required funds, in the manner provided in Section 8.02.

(b) Notes that are not in Authorized Denominations shall not be converted in part, except that if all of the Notes of a Holder are to be converted, the entire outstanding amount of Notes held by such Holder, even if not in Authorized Denominations, shall be converted. Except as provided in the preceding sentence, provisions of this Indenture that apply to conversion of Notes shall also apply to conversion of portions of Notes.

(c) Notwithstanding the foregoing, if such Note has been called for redemption pursuant to Article 3, the Note may be converted only until the close of business on the Business Day immediately preceding the redemption date unless the Issuer defaults in the payment of such Notes at the Redemption Price in accordance with the terms of this Indenture.

(d) A Note in respect of which a Holder is electing to exercise its option to require repurchase upon a Change of Control pursuant to Section 4.08 may be converted only if such Holder withdraws its election in accordance with Section 4.08(e). A Holder of a Note is not entitled to any rights of a holder of Common Stock until such Holder has converted such Note to Common Stock, and only to the extent such Note is deemed to have been converted to Common Stock under this Article 8.

 

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Section 8.02.  Exercise of Conversion Privilege; Issuance of Common Stock on Conversion .

In order to exercise the conversion privilege with respect to any Note in certificated form, the Issuer must receive at the office or agency of the Issuer maintained for that purpose or, at the option of such Holder, the Corporate Trust Office of the Trustee, such Note with the original or facsimile of the form entitled “Option of Holder to Elect Conversion” on the reverse thereof, duly completed and manually signed, together with such Notes duly endorsed for transfer, accompanied by the funds, if any, required by this Section 8.02. Such notice shall also state the name or names (with address or addresses) in which the certificate or certificates for shares of Common Stock issuable on such conversion shall be issued, and shall be accompanied by transfer or similar taxes, if required pursuant to Section 8.07.

In order to exercise the conversion privilege with respect to any interest in a Global Note, the beneficial holder must comply with the Applicable Procedures to cause its interests in such Global Note to be delivered to the Conversion Agent and pay the funds, if any, required by this Section 8.02 and any transfer or similar taxes, if required pursuant to Section 8.07.

If the Issuer elects, in its sole discretion, to issue and deliver shares of Common Stock upon conversion of any interest in a Global Note in book-entry form through the Depositary, the Issuer shall provide to Holders a notice of such change in the manner set forth in Section 16.02. Thereafter, to exercise the conversion privilege with respect to any interest in a Global Note, the beneficial holder must complete, or cause to be completed, the appropriate instruction form for conversion pursuant to the Depositary’s book-entry conversion program, deliver, or cause to be delivered, by book-entry delivery its interests in such Global Note to the Conversion Agent, and pay the funds, if any, required by this Section 8.02 and any transfer or similar taxes, if required pursuant to Section 8.07.

In order to validly exercise the conversion privilege under this Section 8.02, a conversion must be effected prior to the expiration of the period of time set forth in Section 8.01. Each conversion shall be deemed to have been effected as to any such Note (or portion thereof) on the date on which the requirements set forth in this Section 8.02 have been satisfied as to such Note (or portion thereof) (the “ Conversion Date ”), and the Person in whose name any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be deemed to have become on said date the holder of record of the shares represented thereby; provided that any such surrender on any date when the stock transfer books of Holdings shall be closed shall constitute the Person in whose name the certificates are to be issued or shares of Common Stock are to be credited as the holder of record thereof for all purposes on the next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Rate in effect on the date upon which such Note shall be surrendered.

As promptly as practicable following the Conversion Date, subject to compliance with any restrictions on transfer if shares of Common Stock issuable on conversion are to be issued in a name other than that of the Noteholder (as if such transfer were a transfer of the Note or Notes (or portion thereof) so converted) but in any event, no later than the third Business Day following the Conversion Date or, if the shares of Common Stock are to be issued in the name of the beneficial owner of an interest in a Global Note, the third Business Day after such beneficial owner provides to the Conversion Agent the name or names (with address or addresses) in which the certificate or certificates for shares of Common Stock issuable on such conversion shall be issued, Holdings shall issue and the Issuer shall deliver to such Noteholder, (a) a certificate or certificates at the office or agency maintained by the Issuer for such purpose pursuant to Section 4.02 for the number of full shares of Common Stock issuable upon the conversion of such Note or portion thereof as determined by the Issuer in accordance with the provisions of this Article 8 or (b) effect a book-entry transfer pursuant to the Applicable Procedures for the number of full shares of Common Stock issuable upon the conversion of such Note or portion thereof as determined by the Issuer in accordance with the provisions of this Article 8. In case any Note of an

 

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Authorized Denomination shall be surrendered for partial conversion, the Issuer shall execute and the Trustee shall authenticate and deliver to the Holder of the Note so surrendered, without charge to him, a new Note or Notes in Authorized Denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Note. It is understood that, notwithstanding anything in this Indenture to the contrary, only an Authentication Order and not an Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate such new Note.

Any Note or portion thereof surrendered for conversion during the period from the close of business on the Record Date for any Interest Payment Date to the close of business on the Business Day preceding the following Interest Payment Date shall be accompanied by payment, in immediately available funds or other funds acceptable to the Issuer, of an amount equal to the interest otherwise payable on such Interest Payment Date on the principal amount being converted; provided that no such payment need be made (1) if the Issuer has specified a redemption date that is after a Record Date and prior to the next Interest Payment Date, (2) if the Issuer has specified a Change of Control Payment Date that is after a Record Date and prior to the next Interest Payment Date or (3) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such Note. Except as provided above in this Section 8.02, no payment or other adjustment shall be made for interest accrued on any Note converted or for dividends on any shares issued upon the conversion of such Note as provided in this Article 8.

Upon the conversion of an interest in a Global Note, the Trustee (or other Conversion Agent appointed by the Issuer), or the Custodian at the direction of the Trustee (or other Conversion Agent appointed by the Issuer), shall make a notation on such Global Note as to the reduction in the principal amount represented thereby.

Upon conversion, a Holder shall not receive any separate cash payment for accrued and unpaid interest except as set forth in this Section 8.02. The Issuer’s delivery of the Common Stock in exchange for the Note being converted pursuant to the provisions hereof shall be deemed to satisfy its obligation to pay the principal amount of the Note and accrued and unpaid interest to, but not including, the Conversion Date. As a result, accrued and unpaid interest to, but not including, the Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited.

Section 8.03.  No Fractional Shares .

No fractional shares of Common Stock or scrip certificates representing fractional shares shall be issued upon conversion of Notes. If more than one Note shall be surrendered for conversion at one time by the same Holder, the number of full shares that shall be issuable upon conversion shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof to the extent permitted hereby) so surrendered. If any fractional share of stock would be issuable upon the conversion of any Note or Notes, the Issuer shall round up and deliver an additional share.

Section 8.04. Responsibility of Trustee .

The Trustee and any other Conversion Agent shall not at any time be under any duty or responsibility to any Holder of Notes to determine the Conversion Rate or whether any facts exist which may require any adjustment of the Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, which may at any time be delivered upon the conversion of any Note; and the Trustee and any other Conversion Agent make no representations

 

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with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Issuer to transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Note for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Issuer contained in this Article 8. Without limiting the generality of the foregoing, neither the Trustee nor the Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 8.06 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Noteholders upon the conversion of their Notes after any event referred to in such Section 8.06 or to any adjustment to be made with respect thereto, but, subject to Sections 7.01 and 7.02 hereof, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officer’s Certificate (which the Issuer shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto.

Section 8.05. Adjustment of Conversion Rates .

The applicable Conversion Rate shall be adjusted from time to time by the Issuer as follows:

(a) In case Holdings shall hereafter pay a dividend or make a distribution to all or substantially all holders of the outstanding Common Stock in shares of Common Stock, each Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying such Conversion Rate in effect at the opening of business on the date following the Common Stock Record Date by a fraction,

(i) the numerator of which shall be sum of (x) the number of shares of Common Stock outstanding at the close of business on the Common Stock Record Date and (y) the total number of shares of Common Stock constituting such dividend or other distribution; and

(ii) the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the Common Stock Record Date;

such increase to become effective at the opening of business on the date following such Common Stock Record Date. For the purpose of this paragraph (a), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of Holdings. Holdings will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of Holdings. If any dividend or distribution of the type described in this Section 8.05(a) is declared but not so paid or made, the applicable Conversion Rate shall again be adjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(b) In case Holdings shall issue rights, options or warrants to all or substantially all holders of its outstanding shares of Common Stock (except as to rights, options and warrants which do not entitle their holders to purchase shares until the occurrence of a Trigger Event) entitling them (for a period expiring within forty-five (45) days after the Common Stock Record Date) to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price calculated using the declaration date as the date for determination of stockholders entitled to receive such rights, options or warrants, each Conversion Rate shall be increased by multiplying such Conversion Rate in effect at the opening of business on the Common Stock Record Date by a fraction,

(i) the numerator of which shall be the sum of (x) the number of shares of Common Stock outstanding at the close of business on the Common Stock Record Date,

 

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and (y) the total number of shares (the “ Underlying Shares ”) of Common Stock underlying all of such issued rights, options or warrants (whether by exercise, conversion, exchange or otherwise); and

(ii) the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding at the close of business on the Common Stock Record Date, and (y) the number of shares of Common Stock which the aggregate exercise, conversion, exchange or other price at which the Underlying Shares may be subscribed for or purchased pursuant to such rights or warrants would purchase at such Current Market Price;

such increase to become effective at the opening of business on the date following such Common Stock Record Date.

Such adjustment shall be successively made whenever any such rights, options or warrants are issued, and shall become effective immediately after the opening of business on the Common Stock Record Date. To the extent that shares of Common Stock are not delivered after the expiration of such rights, options or warrants, each Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be each Conversion Rate that would then be in effect if a Common Stock Record Date had not been fixed. In determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than such Current Market Price, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by Holdings for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors acting in good faith.

(c) In case outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, each Conversion Rate in effect at the opening of business on the date following the date upon which such subdivision becomes effective shall be proportionately increased, and conversely, in case outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, each Conversion Rate in effect at the opening of business on the date following the date upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the date following the date upon which such subdivision or combination becomes effective.

(d) In case Holdings shall, by dividend or otherwise, distribute to all or substantially all holders of its Common Stock a portion of its assets (including cash, debt, or other securities or rights to purchase securities (but excluding any distribution referred to in Sections 8.05(a), 8.05(b), 8.05(c) or 8.05(f)) (any of the foregoing hereinafter in this Section 8.05(d) called the “ Distributed Property ”), then, in each such case (unless Holdings elects to reserve such Distributed Property for distribution to the Noteholders upon the conversion of the Notes, so that any such Holder converting Notes will receive upon such conversion, in addition to the shares of Common Stock to which such Holder is entitled, the amount and kind of such Distributed Property which such Holder would have received if such Holder had converted its Notes into Common Stock immediately prior to the Common Stock Record Date) each Conversion Rate shall be increased so that the same shall be equal to the rate determined by multiplying such Conversion Rate in effect at the opening of business on the Common Stock Record Date with respect to such distribution by a fraction,

 

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(i) the numerator of which shall be the Current Market Price with respect to such Common Stock Record Date; and

(ii) the denominator of which shall be the Current Market Price with respect to such Common Stock Record Date less the Fair Market Value (as determined by the Board of Directors acting in good faith, whose determination shall be conclusive, and described in a resolution of the Board of Directors) on the Common Stock Record Date of the portion of the Distributed Property so distributed applicable to one share of Common Stock,

such adjustment to become effective immediately at the opening of business on the date following such Common Stock Record Date; provided that if the then Fair Market Value (as so determined) of the portion of the Distributed Property so distributed applicable to one share of Common Stock is equal to or greater than the Current Market Price on the Common Stock Record Date, in lieu of the foregoing adjustment, adequate provision shall be made so that each Noteholder shall have the right to receive upon conversion the amount of the Distributed Property such Holder would have received had such Holder converted each Note on the Common Stock Record Date. If such dividend or distribution is not so paid or made, each Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. If the Board of Directors determines the Fair Market Value of any distribution for purposes of this Section 8.05(d) by reference to the actual or when issued trading market for any securities, it must in doing so consider the prices in such market over the same period used in computing the Current Market Price with respect to Common Stock Record Date.

Notwithstanding the foregoing, if at the time following a Qualified Public Offering the Distributed Property distributed by Holdings to all or substantially all holders of its Common Stock consists of capital stock of, or similar equity interests in, a Subsidiary or other business unit, each Conversion Rate shall be increased so that the same shall be equal to the rate determined by multiplying such Conversion Rate in effect at the opening of business on the Common Stock Record Date with respect to such distribution by a fraction:

(1) the numerator of which shall be the sum of (x) the average of the daily Closing Sale Prices per share of Common Stock over the ten (10) consecutive Trading Day period (the “ Spinoff Valuation Period ”) commencing on and including the Trading Day after the date on which “ex-dividend trading” commences on the Common Stock on the principal national or regional securities exchange on which the Common Stock is then listed or quoted and (y) the average Fair Market Value (as determined by the Board of Directors acting in good faith, whose determination shall be conclusive, and described in a resolution of the Board of Directors) over the Spinoff Valuation Period of the portion of the Distributed Property so distributed applicable to one share of Common Stock; and

(2) the denominator of which shall be the average of the daily Closing Sale Prices per share of Common Stock over the Spinoff Valuation Period,

such adjustment to become effective at the opening of business on the date following such Common Stock Record Date; provided that the Issuer may in lieu of the foregoing adjustment make adequate provision so that each Noteholder shall have the right to receive upon conversion the amount of Distributed Property such Holder would have received had such Holder converted each Note on the Common Stock Record Date with respect to such distribution.

 

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Rights, options or warrants distributed by Holdings to all holders of Common Stock entitling the holders thereof to subscribe for or purchase shares of the Holdings’ capital stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (“ Trigger Event ”): (i) are deemed to be transferred with such shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this Section 8.05(d) (and no adjustment to the Conversion Rates under this Section 8.05(d) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options and warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rates shall be made under this Section 8.05(d).

If any such right or warrant, including any such existing rights, options or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and record date with respect to new rights, options or warrants with such rights (and a termination or expiration of the existing rights, options or warrants without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights, options or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rates under this Section 8.05 was made, (1) in the case of any such rights, options or warrants that shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Rates shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder or holders of Common Stock with respect to such rights, options or warrants (assuming such holder had retained such rights, options or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights, options or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rates shall be readjusted as if such rights, options and warrants had not been issued.

No adjustment of the Conversion Rates shall be made pursuant to this Section 8.05(d) in respect of rights, options or warrants distributed or deemed distributed on any Trigger Event to the extent that such rights, options or warrants are actually distributed, or reserved by the Issuer for distribution, to Holders of Notes upon conversion by such Holders of Notes to Common Stock.

For purposes of this Section 8.05(d) and Section 8.05(a) and Section 8.05(b), any dividend or distribution to which this Section 8.05(d) is applicable that also includes shares of Common Stock, or rights, options or warrants to subscribe for or purchase shares of Common Stock (or both), shall be deemed instead to be (1) a dividend or distribution of the evidences of indebtedness, assets or shares of capital stock other than such shares of Common Stock or rights, options or warrants (and any Conversion Rate adjustments required by this Section 8.05(d) with respect to such dividend or distribution shall then be made) immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights, options or warrants (and any further Conversion Rate adjustments required by Section 8.05(a) and Section 8.05(b) with respect to such dividend or distribution shall then be made), except that any shares of Common Stock included in such dividend or distribution shall not be deemed “outstanding at the close of business on the date fixed for such determination” within the meaning of Section 8.05(a).

(e) In case a tender or exchange offer made by Holdings or any of its Subsidiaries for all or any portion of the Common Stock shall expire and such tender or exchange offer (as amended upon the expiration thereof) shall require the payment to stockholders of consideration per share of Common Stock

 

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having a Fair Market Value (as determined by the Board of Directors acting in good faith, whose determination shall be conclusive and described in a resolution of the Board of Directors) that as of the last time (the “ Expiration Time ”) tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be amended) exceeds the Closing Sale Price per share of Common Stock on the Trading Day next succeeding the Expiration Time, each Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying such Conversion Rate in effect immediately prior to the Expiration Time by a fraction,

(i) the numerator of which shall be the sum of (x) the Fair Market Value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Expiration Time (the shares deemed so accepted up to any such maximum, being referred to as the “ Purchased Shares ”) and (y) the product of the number of shares of Common Stock outstanding (less any Purchased Shares) at the Expiration Time and the Closing Sale Price per share of Common Stock on the Trading Day (or, if a Qualified Public Offering has not yet occurred, the Business Day) next succeeding the Expiration Time, and

(ii) the denominator of which shall be the number of shares of Common Stock outstanding (including any tendered or exchanged shares) at the Expiration Time multiplied by the Closing Sale Price per share of Common Stock on the Trading Day (or, if a Qualified Public Offering has not yet occurred, the Business Day) next succeeding the Expiration Time,

such adjustment to become effective at the opening of business on the date following the Expiration Time. If Holdings is obligated to purchase shares pursuant to any such tender or exchange offer, but is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, each Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made.

(f) In case Holdings shall, by dividend or otherwise, at any time make a distribution of cash (excluding any cash that is distributed as part of a distribution requiring a Conversion Rate adjustment pursuant to Section 8.05(d)) to all or substantially all holders of Common stock, then in such case each Conversion Rate shall be increased by multiplying such Conversion Rate in effect at the opening of business on the Common Stock Record Date for the determination of holders of Common Stock entitled to such distribution by a fraction, the numerator of which shall be the Current Market Price with respect to such Common Stock Record Date and the denominator of which shall be an amount equal to the Current Market Price with respect to such Common Stock Record Date less the amount of the distribution per share of Common Stock, such adjustment to become effective at the opening of business on the date following the Common Stock Record Date.

(g) In case Holdings shall issue (i) shares of Common Stock, or (ii) options to purchase or rights to subscribe for Common Stock, securities by their terms convertible into or exchangeable for Common Stock, or options to purchase or rights to subscribe for such convertible or exchangeable securities (collectively, “ Convertible Securities ”), without consideration or for consideration per share less than the Common Stock Fair Market Value on the date the price of such shares of Common Stock or such Convertible Securities is fixed by the Holdings (such date, the “ Pricing Date ”), excluding:

(i) dividends, distributions, rights, options or warrants as to which an adjustment was effected pursuant to Sections 8.05(a), 8.05(b), 8.05(c) or 8.05(d);

 

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(ii) shares of Common Stock issued pursuant to any equity compensation plans;

(iii) shares of Common Stock issued in connection with (x) the funding of an acquisition (whether by stock sale, merger, recapitalization, asset purchase or otherwise) or (y) a joint venture or strategic alliance;

(iv) shares of Common Stock issued in a tender offer or exchange offer by Holdings or any of its Subsidiaries as to which an adjustment was effected pursuant to Section 8.05(e) above;

(v) public or broadly marketed offerings (as determined by the Board of Directors of Holdings acting in good faith) and sales of shares of Common Stock, securities convertible into shares of Common Stock or rights or warrants entitling the Holder to purchase shares of Common Stock for cash, conducted on a basis consistent with offerings by public companies of similar size in their own capital raising transactions;

each Conversion Rate shall be increased so that the same shall be equal to the rate determined by multiplying such Conversion Rate in effect on the Pricing Date by a fraction:

(x) the numerator of which shall be the sum of (A) the number of shares of Common Stock outstanding immediately prior to the Pricing Date and (B) the number of additional shares of Common Stock issued (or into which Such Convertible Securities may be exercised or converted); and

(y) the denominator of which shall be the sum of (A) the number of shares of Common Stock outstanding immediately prior to the Pricing Date and (B) the number of shares of Common Stock which the aggregate consideration receivable by Holdings for the total number of shares of Common Stock so issued (or into which such Convertible Securities may be exercised or convert) would purchase at the Common Stock Fair Market Value on the last Trading Day (or, if a Qualified Public Offering has not yet occurred, the Business Day) preceding the Pricing Date.

Such adjustments shall be made successively whenever any shares of Common Stock are issued (or into which such Convertible Securities may be exercised or converted). Any adjustment made pursuant to this Section 8.05(g) shall become effective after the close of business on the Pricing Date.

For purposes of this Section 8.05(g), the aggregate consideration receivable by Holdings in connection with the issuance of such shares of Common Stock or Convertible Securities shall be deemed to be equal to the sum of the net offering price (including the Fair Market Value of any non-cash consideration and after deduction of any related reasonable expenses payable to third parties) of all such securities plus, if applicable, the minimum aggregate amount, if any, payable upon exercise or conversion of any such Convertible Securities into shares of Common Stock.

(h) For purposes of this Section 8.05, the following terms shall have the meaning indicated:

 

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(i) “ Current Market Price ” means (i) at such times as the Common Stock is not listed on a Qualified Exchange, the applicable Conversion Price then in effect, and (ii) at such times as the Common Stock is listed on a Qualified Exchange, the average of the daily Closing Sale Prices per share of Common Stock for the ten consecutive Trading Days ending on the earlier of the date of determination of the Common Stock holders entitled to receive such issuance or distribution and the day before the “Ex-date” with respect to the issuance or distribution requiring such computation immediately prior to the date in question.

If another issuance, distribution, subdivision or combination to which Section 8.05 applies occurs during the period applicable for calculating “ Current Market Price ” pursuant to the definition in the preceding paragraph, “ Current Market Price ” shall be calculated for such period in a manner determined in good faith by the Board of Directors to reflect the impact of such issuance, distribution, subdivision or combination on the Closing Sale Price of the Common Stock during such period.

(ii) “ Common Stock Record Date ” means, for purposes of this Section 8.05, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of stockholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise).

(iii) “ Ex-date ” means (A) at such time as the Common Stock is not listed on a Qualifying Exchange, the applicable Common Stock Record Date, and (B) (1) when used with respect to any issuance or distribution, means the first date on which the Common Stock trades, regular way, on the relevant exchange or in the relevant market from which the Closing Sale Price was obtained without the right to receive such issuance or distribution, and (2) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades, regular way, on such exchange or in such market after the time at which such subdivision or combination becomes effective.

(iv) “ Market Disruption Event ” means the occurrence or existence for more than one half hour period in the aggregate on any scheduled Trading Day for the Common Stock of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the principal national or regional securities exchange on which the Common Stock is then listed or otherwise) in the Common Stock or in any options, contracts or future contracts relating to the Common Stock, and such suspension or limitation occurs or exists at any time before 1:00 p.m. (New York City time) on such day.

(v) “ Trading Day ” means any day on which (i) there is no Market Disruption Event and (ii) the New York Stock Exchange is open for trading, or, if the Common Stock is not listed on the New York Stock Exchange, any day on which the principal national or regional securities exchange on which the Common Stock is listed is open for trading, or, if the Common Stock is not listed on a national or regional securities exchange, any Business Day. A “Trading Day” only includes those days that have a

 

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scheduled closing time of 4:00 p.m. (New York City time) or the then standard closing time for regular trading on the relevant exchange or trading system.

(i) The Issuer may make such increases in a Conversion Rate, in addition to those required by Section 8.05(a), (b), (c), (d), (e), (f) or (g) as the Board of Directors considers to be advisable to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock resulting from any dividend or distribution of stock (or rights to acquire stock) or from any event treated as such for income tax purposes.

To the extent permitted by applicable law, the Issuer from time to time may increase the Conversion Rate by any amount for any period of time if the period is at least twenty (20) days, the increase is irrevocable during the period and the Board of Directors shall have made a determination that such increase would be in the best interests of the Issuer, which determination shall be conclusive. Whenever the Conversion Rate is increased pursuant to the preceding sentence, the Issuer shall mail to Holders of the Notes a notice of the increase at least fifteen (15) days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

(j) Whenever a Conversion Rate is adjusted as herein provided, the Issuer shall promptly file with the Trustee and any Conversion Agent other than the Trustee an Officer’s Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall have received such Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume that the last related Conversion Rate of which it has knowledge is still in effect. Promptly after delivery of such Officer’s Certificate, the Issuer shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Rate to the Holder of each Note at his last address appearing on the Note Register provided for in Section 2.5 of this Indenture, within twenty (20) days after the date of execution of such Officer’s Certificate. Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

(k) In any case in which this Section 8.05 provides that an adjustment shall become effective on or after (1) a record date or Common Stock Record Date for an event, (2) the date fixed for the determination of stockholders entitled to receive a dividend or distribution pursuant to Section 8.05(a), (d) or (f), (3) a date fixed for the determination of stockholders entitled to receive rights, options or warrants pursuant to Section 8.05(b), or (4) the Expiration Time for any tender or exchange offer pursuant to Section 8.05(e), or (5) on the Pricing Date pursuant to Section 8.05(g) (each a “ Determination Date ”), the Issuer may elect to defer such adjustment until the occurrence of the applicable Adjustment Event (as hereinafter defined) by issuing to the Holder of any Note converted after such Determination Date and before the occurrence of such Adjustment Event, the additional shares of Common Stock or other securities issuable upon such conversion by reason of the adjustment required by such Adjustment Event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment. For purposes of this Section 8.05(k), the term “ Adjustment Event ” shall mean:

(i) in any case referred to in clause (1) hereof, the occurrence of such event,

(ii) in any case referred to in clause (2) hereof, the date any such dividend or distribution is paid or made,

(iii) in any case referred to in clause (3) hereof, the date of expiration of such rights, options or warrants,

 

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(iv) in any case referred to in clause (4) hereof, the date a sale or exchange of Common Stock pursuant to such tender or exchange offer is consummated and becomes irrevocable, and

(v) in any case of an adjustment pursuant to Section 8.05(g), the date of the closing of such sale.

(l) For purposes of this Section 8.05, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of Holdings but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. Holdings shall not pay any dividend or make any distribution on shares of Common Stock held in the treasury of Holdings.

(m) Upon conversion of the Notes, the Holders shall receive, in addition to any shares of Common Stock issuable upon such conversion, the associated rights issued under any future shareholder rights plan Holdings adopts unless, prior to conversion, the rights have separated from the Common Stock, expired, terminated or been redeemed or exchanged in accordance with such plan. If the Holders receive rights under such shareholder rights plans as described in the preceding sentence upon conversion of their Notes, then no other adjustment pursuant to this Section 8.05 shall be made in connection with such shareholder rights plans. If the rights under a shareholder rights plan have separated from the Common Stock, then each Conversion Rate shall be adjusted as provided in Section 8.05(d).

Section 8.06. Effect of Reclassification, Consolidation, Merger or Sale .

If any of the following events occur, namely:

(i) any recapitalization, reclassification or change of the outstanding shares of Common Stock (other than a subdivision or combination to which Section 8.05(c) applies);

(ii) any consolidation, merger or combination of Holdings with another Person;

(iii) any sale or conveyance of all or substantially all of the properties and assets of Holdings to any other Person; or

(iv) statutory share exchange;

in each case as a result of which holders of Common Stock shall be entitled to receive stock, other securities or other property or assets (including cash or any combination thereof) with respect to or in exchange for such Common Stock (such property, collectively, the “ Reference Property ”), then the Issuer shall execute with the Trustee, Holdings, such other Person (if applicable) and the Note Guarantors a supplemental indenture providing that at and after the effective time of such transaction each Note shall be convertible into the Reference Property receivable upon such transaction by a holder of a number of shares of Common Stock issuable upon conversion of such Notes (assuming, for such purposes, a sufficient number of authorized shares of Common Stock are available to convert all such Notes) immediately prior to such recapitalization, reclassification, change, consolidation, merger, combination, sale or conveyance assuming such holder of Common Stock did not exercise his rights of election, if any, as to the kind or amount of stock, other securities or other property or assets (including cash) receivable upon such transaction. If the transaction causes the Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration, the Reference Property into which the Notes will be convertible will be deemed to be the weighted average of the types and amounts of

 

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consideration received by the holders of Common Stock. The Issuer shall notify Holders of the weighted average as soon as practicable after such determination is made. The supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 8.

The Issuer shall cause notice of the execution of such supplemental indenture to be mailed to each Holder of Notes, at its address appearing on the Note Register provided for in Section 2.03 of this Indenture, within twenty (20) days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

The above provisions of this Section 8.06 shall similarly apply to successive reclassifications, changes, consolidations, mergers, combinations, sales and conveyances.

Section 8.07. Taxes on Shares of Common Stock .

The delivery of stock certificates on conversions of Notes shall be made without charge to the converting Noteholder for any documentary, stamp or similar tax. The Issuer shall not, however, be required to pay any such tax which may be payable in respect of any transfer involved in the delivery of stock in any name other than that of the Holder of any Note converted, and the Issuer shall not be required to deliver any such stock certificate in connection with conversion unless and until the Person or Persons requesting the delivery thereof shall have paid to the Issuer the amount of such tax or shall have established to the satisfaction of the Issuer that such tax has been paid.

Section 8.08. Reservation of Shares, Shares to Be Fully Paid; Compliance With Governmental Requirements; Listing of Common Stock .

The Issuer shall provide, or cause Holdings to provide, free from preemptive rights, a sufficient number of shares of Common Stock to provide for the conversion of the Notes from time to time as such Notes are presented for conversion.

The Issuer covenants that, before taking any action which would cause an adjustment increasing the Conversion Rate to an amount that would cause the related Conversion Price to be reduced below the then par value, if any, of the shares of Common Stock issuable upon conversion of the Notes, Holdings shall take all corporate action which may, in the opinion of its counsel, be necessary in order that Holdings may validly and legally issue shares of such Common Stock at such adjusted Conversion Rate.

The Issuer covenants that all shares of Common Stock which may be issued upon conversion of Notes will upon issue be validly issued, fully paid and non-assessable and free from all taxes (excluding any income taxes of the Holder or taxes resulting from the Holder’s failure to submit certifications about the Holder’s status), Liens and charges with respect to the issue thereof, and be entitled to identical rights and privileges as then outstanding Common Stock.

The Issuer covenants that, if any shares of Common Stock to be provided for the purpose of conversion of Notes hereunder require registration with or approval of any governmental authority under any federal or state law before such shares may be validly issued upon conversion, the Issuer shall in good faith and as expeditiously as possible, to the extent then permitted by the rules and interpretations of the SEC (or any successor thereto), endeavor to secure such registration or approval.

The Issuer further covenants that, if at any time the Common Stock shall be listed on an Qualified Exchange or automated quotation system, Holdings shall, if permitted by the rules of such Qualified Exchange or automated quotation system, list and keep listed, so long as the Common Stock

 

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shall be so listed on such Qualified Exchange or automated quotation system, all Common Stock issuable upon conversion of the Note; provided that if the rules of such Qualified Exchange or automated quotation system permit Holdings to defer the listing of such Common Stock until the first conversion of the Notes into Common Stock in accordance with the provisions of this Indenture, the Issuer covenants that Holdings shall list such Common Stock issuable upon conversion of the Notes in accordance with the requirements of such Qualified Exchange or automated quotation system at such time.

Section 8.09. Notice to Holders Prior to Certain Actions .

Unless a notice has been provided under Section 8.05(j), in case:

(a) Holdings shall declare a dividend (or any other distribution) on its Common Stock or take any other action that would require an adjustment in a Conversion Rate pursuant to Section 8.05;

(b) Holdings shall authorize the granting to the holders of all or substantially all of its Common Stock of rights, options or warrants to subscribe for or purchase any share of any class or any other rights, options or warrants;

(c) of any reclassification or reorganization of the Common Stock (other than a subdivision or combination of its outstanding Common Stock, or a change in par value, or from par value to no par value, or from no par value to par value), or of any consolidation or merger to which Holdings is a party and for which approval of any stockholders of Holdings is required, or of the sale or transfer of all or substantially all of the assets of Holdings or the Issuer; or

(d) of the voluntary or involuntary dissolution, liquidation or winding up of Holdings or the Issuer;

the Issuer shall cause to be filed with the Trustee and to be mailed to each Holder of Notes at his address appearing on the Note Register provided for in Section 2.5 of this Indenture, as promptly as possible but in any event no later than the applicable date specified in sub-section (i) or (ii) below, a notice stating (i) the date on which a record is to be taken for the purpose of such dividend, distribution or rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, action, distribution or rights are to be determined, or (ii) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend, action, distribution, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01.  Without Consent of Holders of Notes .

Notwithstanding Section 9.02 hereof, the Issuer, Holdings (with respect to the Holdings Guarantee or this Indenture), any Note Guarantor (with respect to its Note Guarantee or this Indenture) and the Trustee may amend or supplement this Indenture and the Notes, the Holdings Guarantee or any Note Guarantee without the consent of any Holder:

 

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(1) to cure any ambiguity, omission, mistake, defect or inconsistency;

(2) to provide for uncertificated Notes in addition to or in place of certificated Notes; provided , however , that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code;

(3) to comply with Section 5.01 hereof;

(4) to provide for the conversion of Notes into Reference Property in accordance with Section 8.06 of this Indenture;

(5) to provide for the assumption of the Issuer’s, Holdings’ or any Note Guarantor’s obligations to the Holders;

(6) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under this Indenture of any such Holder;

(7) to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Issuer, Holdings or any Note Guarantor;

(8) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA;

(9) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee thereunder pursuant to the requirements thereof;

(10) to add a Note Guarantor under this Indenture;

(11) to secure the Notes, the Holdings Guarantee or any Note Guarantees;

(12) to conform the text of this Indenture, the Holdings Guarantee, Note Guarantees or the Notes to any provision of the “Description of the Convertible Notes” section of the Offering Memorandum to the extent that such provision in such “Description of the Convertible Notes” section was intended to be a verbatim recitation of a provision of this Indenture, the Holdings Guarantee, Note Guarantees or Notes;

(13) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including, without limitation to facilitate the issuance and administration of the Notes; provided , however , that (i) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of Holders to transfer Notes; or

(14) to make any change that does not adversely affect the rights of any Holder in any material respect.

Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Issuer, Holdings and the Note Guarantors in the execution of any amended or supplemental indenture authorized or

 

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permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.

Section 9.02.  With Consent of Holders of Notes .

Except as provided below in this Section 9.02, the Issuer, Holdings (with respect to the Holdings Guarantee or this Indenture), any Note Guarantor (with respect to its Note Guarantee or this Indenture) and the Trustee may amend or supplement this Indenture, any Note Guarantee, the Holdings Guarantee and the Notes and, subject to Sections 6.02 and 6.04 hereof, compliance therewith may be waived with the consent of the Holders of at least 66  2 / 3 % of the aggregate principal amount of the Notes then outstanding voting as a single class (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes, and with Notes held by Affiliates of the Issuer eligible to consent to the extent permitted by applicable law). Sections 2.08 and 2.09 hereof shall determine which Notes are considered to be “outstanding” for the purposes of this Section 9.02, except that Notes held by Affiliates of the Issuer shall be eligible to consent to the extent permitted by applicable law.

Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Issuer, Holdings and the Note Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer shall mail or electronically transmit to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to mail or electronically transmit such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

Notwithstanding the foregoing, without the consent of each affected Holder of Notes, an amendment or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):

(1) reduce the percentage of the principal amount of the Notes whose Holders must consent to an amendment, supplement or waiver;

(2) change the Stated Maturity of the Notes or time of payment of interest;

(3) reduce the principal of, interest rate on or premium payable on the Notes;

(4) make any change that adversely affects the conversion rights of the Notes, including the Conversion Price and Conversion Rate adjustment provisions;

(5) make any change that grants additional redemption rights;

 

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(6) change the currency payable on the Notes or the location of payment other than as contemplated by this Indenture;

(7) adversely affect the ranking of the Notes, the Holdings Guarantee or the Note Guarantees;

(8) waive or impair the right to institute suit for the enforcement of any payment with respect to, or conversion of, any Notes; or

(9) except as expressly permitted by Section 11.06 hereof, release the Note Guarantees of any Significant Subsidiary.

Section 9.03.  Compliance with TIA .

Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies with the TIA as then in effect.

Section 9.04.  Revocation and Effect of Consents .

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement, or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date unless the consent of the requisite number of Holders has been obtained.

Section 9.05.  Notation on or Exchange of Notes .

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

Section 9.06. Trustee to Sign Amendments, etc.

The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Issuer may not sign an amendment, supplement or waiver until its board of directors approves it. In executing any amendment, supplement or waiver, the Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the

 

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documents required by Section 16.04 hereof, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer, Holdings and any Note Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03).

ARTICLE 10

SUBORDINATION

Section 10.01.  Agreement To Subordinate .

The Issuer agrees, and each Holder by accepting a Note agrees, that the payment of all Obligations owing in respect of the Notes is subordinated in right of payment, to the extent and in the manner provided in this Article 10, to the prior payment in full of all existing and future Senior Indebtedness of the Issuer and that the subordination is for the benefit of and enforceable by the holders of such Senior Indebtedness. The Notes shall in all respects rank pari passu in right of payment with all existing and future senior subordinated Indebtedness of the Issuer (including the Existing Senior Subordinated Notes and the New Senior Subordinated Notes), and will be senior in right of payment to all existing and future Subordinated Indebtedness of the Issuer; and only Indebtedness of the Issuer that is Senior Indebtedness shall rank senior to the Notes in accordance with the provisions set forth herein. All provisions of this Article 10 shall be subject to Section 10.12.

Section 10.02.  Liquidation, Dissolution, Bankruptcy .

Upon any payment or distribution of the assets of the Issuer to creditors upon a total or partial liquidation or a total or partial dissolution of the Issuer or in a reorganization of or similar proceeding relating to the Issuer or its property:

(i) the holders of Senior Indebtedness of the Issuer shall be entitled to receive payment in full in cash of such Senior Indebtedness (including interest accruing after, or which would accrue but for, the commencement of any such proceeding at the rate specified in the applicable Senior Indebtedness, whether or not a claim for such interest would be allowed) before Holders of the Notes shall be entitled to receive any payment;

(ii) until the Senior Indebtedness of the Issuer is paid in full in cash, any payment or distribution to which Holders of the Notes would be entitled but for the subordination provisions of this Indenture shall be made to holders of such Senior Indebtedness as their interests may appear, except that Holders of the Notes may receive and retain (x) Permitted Junior Securities and (y) payments or deposits made pursuant to Article 15 so long as, on the date or dates the respective amounts were paid into the trust, such payments were made with respect to the Notes without violating the subordination provisions described herein; and

(iii) if a distribution is made to Holders of the Notes that, due to the subordination provisions, should not have been made to them, such Holders of the Notes are required to hold it in trust for the holders of Senior Indebtedness of the Issuer and pay it over to them as their interests may appear.

 

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Section 10.03.  Default on Senior Indebtedness of the Issuer .

The Issuer shall not pay principal of, premium, if any, or interest on the Notes (or pay any other Obligations relating to the Notes, including Additional Interest, fees, costs, expenses, indemnities and rescission or damage claims) or make any deposit pursuant to Article 15 hereof and may not purchase, redeem or otherwise retire any Notes (collectively, “ pay the Notes ”) (except that Holders of the Notes may receive and retain (x) Permitted Junior Securities and (y) payments or deposits made pursuant to Article 15), if either of the following occurs (a “ Payment Default ”):

(i) a default in the payment of the principal of, premium, if any, or interest on any Designated Senior Indebtedness of the Issuer occurs and is continuing or any other amount owing in respect of any Designated Senior Indebtedness of the Issuer is not paid when due, or

(ii) any other default on Designated Senior Indebtedness of the Issuer occurs and the maturity of such Designated Senior Indebtedness of the Issuer is accelerated in accordance with its terms,

unless, in either case, the Payment Default has been cured or waived and any such acceleration has been rescinded or such Designated Senior Indebtedness has been paid in full in cash; provided , however , that the Issuer shall be entitled to pay the Notes without regard to the foregoing if the Issuer and the Trustee receive written notice approving such payment from the Representatives of all Designated Senior Indebtedness with respect to which the Payment Default has occurred and is continuing.

During the continuance of any default (other than a Payment Default) (a “ Non-Payment Default ”) with respect to any Designated Senior Indebtedness of the Issuer pursuant to which the maturity thereof may be accelerated without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, the Issuer shall not pay the Notes (except in the form of Permitted Junior Securities) for a period (a “ Payment Blockage Period ”) commencing upon the receipt by the Trustee (with a copy to the Issuer) of written notice (a “ Blockage Notice ”) of such Non-Payment Default from the Representative of such Designated Senior Indebtedness specifying an election to effect a Payment Blockage Period and ending 179 days thereafter, unless earlier terminated as provided below. With respect to Indebtedness under the Credit Agreement, a Blockage Notice may be given only by the administrative agent thereunder unless otherwise agreed to in writing by the requisite lenders named therein. The Payment Blockage Period shall end earlier if such Payment Blockage Period is terminated (i) by written notice to the Trustee and the Issuer from the Person or Persons who gave such Blockage Notice; (ii) because the default giving rise to such Blockage Notice is cured, waived or otherwise no longer continuing; or (iii) because such Designated Senior Indebtedness has been repaid in full in cash.

Notwithstanding the provisions described in the immediately preceding paragraph (but subject to the provisions contained in the first paragraph of this Section 10.03 and Section 10.02 hereof), unless the holders of such Designated Senior Indebtedness or the Representative of such Designated Senior Indebtedness shall have accelerated the maturity of such Designated Senior Indebtedness or a Payment Default exists, the Issuer shall be permitted to resume paying the Notes after the end of such Payment Blockage Period (including any missed payments). The Notes shall not be subject to more than one Payment Blockage Period in any consecutive 360-day period, irrespective of the number of defaults with respect to Designated Senior Indebtedness during such period; provided that if any Blockage Notice is delivered to the Trustee by or on behalf of the holders of Designated Senior Indebtedness of the Issuer (other than the holders of Indebtedness under the Credit Agreement), a Representative of holders of Indebtedness under the Credit Agreement may give another Blockage Notice within such period.

 

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However, in no event shall the total number of days during which any Payment Blockage Period or Periods on the Notes is in effect exceed 179 days in the aggregate during any consecutive 360-day period. Notwithstanding the foregoing, however, no default or event of default that existed or was continuing on the date of commencement of any Payment Blockage Period with respect to Designated Senior Indebtedness initiating such Payment Blockage Period shall be, or be made, the basis for a subsequent Payment Blockage Period by the Representative of such Designated Senior Indebtedness whether or not within a period of 360 consecutive days unless such default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenants during the period after the date of delivery of a Blockage Notice, that, in either case, would give rise to a Non-Payment Default pursuant to any provisions of the Designated Senior Indebtedness under which a Non-Payment Default previously existed or was continuing shall constitute a new Non-Payment Default for this purpose).

Section 10.04.  Acceleration of Payment of Notes .

If payment of the Notes is accelerated because of an Event of Default, the Issuer or the Trustee shall promptly notify the holders of the Designated Senior Indebtedness of the Issuer or the Representative of such Designated Senior Indebtedness of the acceleration; provided that any failure to give such notice shall have no effect whatsoever on the provisions of this Article 10. If any Designated Senior Indebtedness of the Issuer is outstanding, the Issuer may not pay the Notes until five Business Days after the Representatives of all such Designated Senior Indebtedness receive notice of such acceleration and, thereafter, may pay the Notes only if this Indenture otherwise permits payment at that time.

Section 10.05.  When Distribution Must Be Paid Over .

If a distribution is made to Holders that, due to the subordination provisions, should not have been made to them, such Holders are required to hold it in trust for the holders of Senior Indebtedness of the Issuer, and pay it over to them as their interests may appear.

Section 10.06.  Subrogation .

After all Senior Indebtedness of the Issuer is paid in full and until the Notes are paid in full, Holders shall be subrogated to the rights of holders of such Senior Indebtedness to receive distributions applicable to such Senior Indebtedness. A distribution made under this Article 10 to holders of such Senior Indebtedness which otherwise would have been made to Holders is not, as between the Issuer and Holders, a payment by the Issuer on such Senior Indebtedness.

Section 10.07.  Relative Rights .

This Article 10 defines the relative rights of Holders and holders of Senior Indebtedness of the Issuer. Nothing in this Indenture shall:

(i) impair, as between the Issuer and Holders, the obligation of the Issuer, which is absolute and unconditional, to pay principal of and interest on the Notes in accordance with their terms;

(ii) prevent the Trustee or any Holder from exercising its available remedies upon a Default, subject to the rights of holders of Senior Indebtedness of the Issuer to receive payments or distributions otherwise payable to Holders and such other rights of such holders of Senior Indebtedness as set forth herein; or

 

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(iii) affect the relative rights of Holders and creditors of the Issuer other than their rights in relation to holders of Senior Indebtedness.

Section 10.08.  Subordination May Not Be Impaired by the Issuer .

No right of any holder of Senior Indebtedness of the Issuer to enforce the subordination of the Indebtedness evidenced by the Notes shall be impaired by any act or failure to act by the Issuer or by their failure to comply with this Indenture.

Section 10.09.  Rights of Trustee and Paying Agent .

Notwithstanding Section 10.03 hereof, the Trustee or any Paying Agent may continue to make payments on the Notes and shall not be charged with knowledge of the existence of facts that would prohibit the making of any payments unless, not less than three Business Days prior to the date of such payment, a Trust Officer at the Corporate Trust Office of the Trustee receives notice satisfactory to him that payments may not be made under this Article 10; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 7.01, shall be entitled in all respects to assume that no such facts exist; provided , however , that if a Trust Officer of the Trustee shall not have received, at least three Business Days prior to the date upon which by the terms hereof any such money may become payable for any purpose (including, without limitation, the payment of principal, premium, if any, interest, Additional Interest, the Redemption Price or the Change of Control Payment, as the case may be, in respect of any Note), the notice with respect to such money provided for in this Section 10.09 then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within three Business Days prior to such date. The Issuer, a Representative, a holder of Senior Indebtedness of the Issuer, any trustee or agent thereof shall be entitled to give the notice; provided , however , that, if an issue of Senior Indebtedness of the Issuer has a Representative, only the Representative shall be entitled to give the notice.

The Trustee in its individual or any other capacity shall be entitled to hold Senior Indebtedness of the Issuer with the same rights it would have if it were not Trustee. The Registrar and the Paying Agent shall be entitled to do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article 10 with respect to any Senior Indebtedness of the Issuer which may at any time be held by it, to the same extent as any other holder of such Senior Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing in this Article 10 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof or any other Section of this Indenture.

Section 10.10.  Distribution or Notice to Representative .

Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness of the Issuer, the distribution may be made and the notice given to their Representative (if any).

Section 10.11.  Article 10 Not To Prevent Events of Default or Limit Right To Accelerate .

The failure to make a payment pursuant to the Notes by reason of any provision in this Article 10 shall not be construed as preventing the occurrence of a Default. Nothing in this Article 10 shall have any effect on the right of the Holders or the Trustee to accelerate the maturity of the Notes.

 

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Section 10.12.  Payment Moneys Not Subordinated .

Notwithstanding anything contained herein to the contrary, payments from money held by the Trustee pursuant to Section 15.01 shall not be subordinated to the prior payment of any Senior Indebtedness of the Issuer or subject to the restrictions set forth in this Article 10, and none of the Holders shall be obligated to pay over any such amount to the Issuer or any holder of Senior Indebtedness of the Issuer or any other creditor of the Issuer; provided that the subordination provisions of this Article 10 were not violated at the time the applicable amounts were deposited pursuant to Section 15.01 hereof.

Section 10.13.  Trustee Entitled To Rely .

Upon any payment or distribution pursuant to this Article 10, the Trustee and the Holders shall be entitled to conclusively rely (a) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 10.02 hereof are pending, (b) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (c) upon the Representatives of Senior Indebtedness of the Issuer for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of such Senior Indebtedness and other Indebtedness of the Issuer, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 10. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Indebtedness of the Issuer to participate in any payment or distribution pursuant to this Article 10, the Trustee shall be entitled to request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article 10, and, if such evidence is not furnished, the Trustee shall be entitled to defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 hereof shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article 10.

Section 10.14.  Trustee To Effectuate Subordination .

A Holder by its acceptance of a Note agrees to be bound by this Article 10 and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be necessary or appropriate to effectuate the subordination between the Holders and the holders of Senior Indebtedness of the Issuer as provided in this Article 10 and appoints the Trustee as attorney-in-fact for any and all such purposes.

Section 10.15.  Trustee Not Fiduciary for Holders of Senior Indebtedness of the Issuer .

The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of the Issuer and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders or the Issuer or any other Person, money or assets to which any holders of Senior Indebtedness of the Issuer shall be entitled by virtue of this Article 10 or otherwise.

Section 10.16.  Reliance by Holders of Senior Indebtedness of the Issuer on Subordination Provisions .

Each Holder by accepting a Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness of the Issuer, whether such Senior Indebtedness was created or acquired before or after the issuance of the Notes, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness and such holder of such Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness.

 

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Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness of the Issuer may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Trustee or the Holders and without impairing or releasing the subordination provided in this Article 10 or the obligations hereunder of the Holders to the holders of the Senior Indebtedness of the Issuer, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness of the Issuer, or otherwise amend or supplement in any manner Senior Indebtedness of the Issuer, or any instrument evidencing the same or any agreement under which Senior Indebtedness of the Issuer is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness of the Issuer; (iii) release any Person liable in any manner for the payment or collection of Senior Indebtedness of the Issuer; and (iv) exercise or refrain from exercising any rights against the Issuer and any other Person.

ARTICLE 11

NOTE GUARANTEES

Section 11.01. Note Guarantee .

Subject to this Article 11, each of the Note Guarantors hereby, jointly and severally with each other Note Guarantor and with Holdings, irrevocably and unconditionally guarantees, on an unsecured senior subordinated basis, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, the performance of all obligations of the Issuer under this Indenture and the Notes and that: (a) the principal of, premium, if any, interest, and Additional Interest, if any, on the Notes shall be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder whether for payment of principal of, premium, if any, interest, and Additional Interest, if any, on the Notes and all other monetary obligations of the Issuer under this Indenture and the Notes shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, each Note Guarantor, together with Holdings as described in Article 12, shall be jointly and severally obligated to pay the same or cause such performance immediately. Each Note Guarantor agrees that this is a guarantee of performance and payment and not a guarantee of collection.

The Note Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, the Holdings Guarantee, any Note Guarantee or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, Holdings or any Note Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Note Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.

 

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Each Note Guarantor also agrees to pay, in addition to the amount stated above, any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 11.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, Holdings, the Note Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer, Holdings or the Note Guarantors, any amount paid either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Each Note Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Note Guarantor further agrees that, as between the Note Guarantors and Holdings, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Note Guarantors for the purpose of this Note Guarantee. The Note Guarantors shall have the right to seek contribution from any non-paying Note Guarantor or Holdings so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantees.

Each Note Guarantee will be a continuing guarantee and shall:

(1) remain in full force and effect until payment in full of all the applicable guaranteed obligations;

(2) subject to Section 11.06, be binding upon each such Note Guarantor and its successors; and

(3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

Each Note Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer, Holdings or any Note Guarantor for liquidation or reorganization, should the Issuer, Holdings or any Note Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s, Holdings’ or any other Note Guarantor’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, the Holdings Guarantee or Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

In case any provision of any Note Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

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The Note Guarantee issued by any Note Guarantor shall be a general unsecured senior subordinated obligation of such Note Guarantor and shall be subordinated in right of payment to all existing and future Senior Indebtedness of such Note Guarantor, if any.

Each payment to be made by a Note Guarantor in respect of its Note Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

Section 11.02.  Limitation on Note Guarantor Liability .

Each Note Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Note Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders, the Note Guarantors and Holdings hereby irrevocably agree that the obligations of each Note Guarantor shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Note Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Note Guarantor or Holdings in respect of the obligations of such other Note Guarantor or Holdings under this Article 11 and Article 12, result in the obligations of such Note Guarantor under its Note Guarantee not being voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. Each Note Guarantor that makes a payment under its Note Guarantee shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each other Note Guarantor and Holdings in an amount equal to such other Note Guarantor’s or Holdings’ pro rata portion of such payment based on the respective net assets of all the Note Guarantors and Holdings at the time of such payment determined in accordance with GAAP.

Section 11.03.  Execution and Delivery .

To evidence its Note Guarantee set forth in Section 11.01 hereof, each Note Guarantor hereby agrees that this Indenture shall be executed on behalf of such Note Guarantor by its Chairman, President, its Chief Financial Officer, its Treasurer, its Assistant Treasurer, one of its Vice Presidents or one of its Assistant Vice Presidents.

Each Note Guarantor hereby agrees that its Note Guarantee set forth in Section 11.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Note Guarantee on the Notes.

If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Note Guarantee shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Note Guarantors.

If required by Section 4.05 hereof, the Issuer shall cause any newly created or acquired Subsidiary to comply with the provisions of Section 4.05 hereof and this Article 11, to the extent applicable.

Section 11.04.  Subrogation .

Each Note Guarantor shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by such Note Guarantor pursuant to the provisions of Section 11.01

 

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hereof; provided that, if an Event of Default has occurred and is continuing, no Note Guarantor shall be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.

Section 11.05.  Benefits Acknowledged .

Each Note Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to its Note Guarantee are knowingly made in contemplation of such benefits.

Section 11.06.  Release of Note Guarantees .

A Note Guarantee by a Note Guarantor shall be automatically and unconditionally released and discharged, and no further action by such Note Guarantor, Holdings, the Issuer or the Trustee is required for the release of such Note Guarantor’s Note Guarantee, upon:

(a) the sale, disposition or other transfer (including through merger or consolidation) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Note Guarantor is no longer a Subsidiary of the Issuer), of the applicable Note Guarantor if such sale, disposition or other transfer is made in compliance with this Indenture and such Note Guarantor is released from its guarantees, if any, of all Senior Subordinated Pari Passu Indebtedness;

(b) the release or discharge of such Note Guarantor from its guarantee of the New Senior Subordinated Notes that resulted in the obligation to guarantee the Notes, if such Note Guarantor would not then otherwise be required to guarantee the Notes pursuant to this Indenture (for the avoidance of doubt, the only requirement to guarantee the Notes pursuant to this Indenture whether on the Issue Date or thereafter is as set forth in Section 4.05); or

(c) Issuer’s obligations under this Indenture being discharged in accordance with the terms of this Indenture.

In addition, a Note Guarantee will be automatically released upon the applicable Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest securing Bank Indebtedness or other exercise of remedies in respect thereof.

Section 11.07.  Securitization Acknowledgement .

For purposes of this Section 11.07, capitalized terms used herein and not otherwise defined herein (unless there shall be a conflict between a term used in this Section 11.07 and a term used elsewhere in this Indenture, in which case the term as defined in this Section 11.07 shall control solely for purposes of this Section 11.07) shall have the meanings assigned to such terms in the Transfer and Servicing Agreement, or, if not defined therein, as assigned to such terms in the Purchase Agreement or the Receivables Purchase Agreement referred to therein. Subsequent references in this Section 11.07 to Apple Ridge Services Corporation (“ ARSC ”), Cartus Corporation (“ Cartus ”) and Cartus Financial Corporation (“ CFC ”) below shall mean and be references to such corporations as they existed as of the Original Issue Date but shall also include references to any limited liability companies which succeed to the assets and liabilities of such companies in connection with a conversion of any such corporation into a limited liability company.

 

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Holders by their acceptance of Notes entitled to the benefits of this Indenture acknowledge and agree, as follows (which acknowledgement and agreement are part of the consideration for the issuance of the Notes):

(i) Each Holder hereby acknowledges that (A) CFC is a limited purpose corporation whose primary activities are restricted in its certificate of incorporation to purchasing Cartus Purchased Assets (originally referred to as CMSC Purchased Assets) from Cartus pursuant to the Purchase Agreement, making Equity Payments, Equity Loans, Mortgage Payoffs and Mortgage Payments to or on behalf of employees or otherwise purchasing Homes in connection with the Pool Relocation Management Agreements, funding such activities through the sale of CFC Receivables (originally referred to as CMF Receivables) to ARSC, and such other activities as it deems necessary or appropriate in connection therewith, (B) ARSC is a limited purpose corporation whose primary activities are restricted in its certificate of incorporation to purchasing from CFC all CFC Receivables acquired by CFC from Cartus or otherwise originated by CFC, funding such acquisitions through the sale of the CFC Receivables to Apple Ridge Funding LLC (“ ARF ”) and such other activities as it deems necessary or appropriate to carry out such activities, and (C) ARF is a limited purpose limited liability company whose activities are limited in its limited liability company agreement to purchasing the Pool Receivables from ARSC, funding such acquisitions through the issuance of the Notes, pledging such Pool Receivables to The Bank of New York Mellon (formerly known as The Bank of New York) (the “ Indenture Trustee ”) and such other activities as it deems necessary or appropriate to carry out such activities.

(ii) Each Holder hereby acknowledges and agrees that (A) the foregoing transfers are intended to be true and absolute sales as a result of which Cartus has no right, title and interest in and to any of the Cartus Purchased Assets, any Homes acquired by CFC in connection therewith or any CFC Receivables, including any Related Property relating thereto, any proceeds thereof or earnings thereon (collectively, the “ Pool Assets ”), (B) none of CFC, ARSC or ARF is a Loan Party, (C) such Holder is not a creditor of, and has no recourse to, CFC, ARSC or ARF pursuant to the Credit Agreement or any other Loan Document, and (D) such Holder has no lien on or claim, contractual or otherwise, arising under the Credit Agreement or any other Loan Document to the Pool Assets (whether now existing or hereafter acquired and whether tangible or intangible); provided that nothing herein shall limit any rights the Secured Parties may have to any proceeds or earnings which are transferred from time to time to Cartus by CFC, ARSC or ARF.

(iii) No Holder will institute against or join any other person in instituting against CFC, ARSC or ARF any insolvency proceeding, or solicit, join in soliciting, cooperate with or encourage any motion in support of, any insolvency proceeding involving CFC, ARSC or ARF until one year and one day after the payment in full of all Notes; provided that the foregoing shall not limit the right of any Holder to file any claim in or otherwise take any action (not inconsistent with the provisions of this Section 11.07(a)) permitted or required by applicable law with respect to any insolvency proceeding instituted against CFC, ARSC or ARF by any other person.

(iv) Without limiting the foregoing, in the event of any voluntary or involuntary bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any Federal or state bankruptcy or similar law involving Cartus, CFC, ARSC, ARF or any other Affiliates of Cartus as debtor, or otherwise, the Secured Parties

 

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agree that if, notwithstanding the intent of the parties, Cartus is found to have a property interest in the Pool Assets, then, in such event, CFC and its assigns, including the Indenture Trustee, shall have a first and prior claim to the Pool Assets, and any claim or rights the Secured Parties may have to the Pool Assets, contractual or otherwise, shall be subject to the prior claims of the Indenture Trustee and the Noteholders until all amounts owing under the Indenture shall have been paid in full, and the Secured Parties agree to turn over to the Indenture Trustee any amounts received contrary to the provisions of this clause (iv).

(v) Each Holder hereby covenants and agrees that it will not agree to any amendment, supplement or other modification of this Section 11.07(a) without the prior written consent of the Indenture Trustee. Each Holder further agrees that the provisions of this Section 11.07(a) are made for the benefit of, and may be relied upon and enforced by, the Indenture Trustee and that the Indenture Trustee shall be a third party beneficiary of this Section 11.07(a).

ARTICLE 12

HOLDINGS GUARANTEE

Section 12.01.  Holdings Guarantee .

Subject to this Article 12, Holdings hereby, jointly and severally with the Note Guarantors, irrevocably and unconditionally guarantees, on an unsecured junior subordinated basis, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, the performance of all obligations of the Issuer under this Indenture and the Notes and that: (a) the principal of and interest, premium and Additional Interest, if any, on the Notes shall be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder whether for payment of principal of, premium, if any, or interest, or Additional Interest, if any, on the Notes and all other monetary obligations of the Issuer under this Indenture and the Notes shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, Holdings, together with the Note Guarantors as described in Article 11, shall be jointly and severally obligated to pay the same or cause such performance immediately. Holdings agrees that this is a guarantee of performance and payment and not a guarantee of collection.

Holdings hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, this Indenture or any Note Guarantee, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, Holdings or any Note Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Holdings hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and

 

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covenants that this Holdings Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.

Holdings also agrees to pay, in addition to the amount stated above, any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 12.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, Holdings, the Note Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer, Holdings or the Note Guarantors, any amount paid either to the Trustee or such Holder, this Holdings Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Holdings agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Holdings further agrees that, as between Holdings and the Note Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Holdings Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Holdings for the purpose of this Holdings Guarantee. Holdings shall have the right to seek contribution from any non-paying Note Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantees.

This Holdings Guarantee will be a continuing guarantee and shall:

(1) remain in full force and effect until payment in full of all the applicable guaranteed obligations;

(2) subject to Section 12.06, be binding upon Holdings and its successors; and

(3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

This Holdings Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer, Holdings or any Note Guarantor for liquidation or reorganization, should the Issuer, Holdings or any Note Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s, Holdings’ or any Note Guarantor’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, the Holdings Guarantee or Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

In case any provision of this Holdings Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

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This Holdings Guarantee shall be a general unsecured junior subordinated obligation of Holdings and shall be subordinated in right of payment to all existing and future Holdings Senior Indebtedness, if any.

Each payment to be made by Holdings in respect of its Holdings Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

Section 12.02.  Limitation on Holdings Liability .

Holdings, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Holdings Guarantee of Holdings not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to this Holdings Guarantee. To effectuate the foregoing intention, the Trustee, the Holders, Holdings and the Note Guarantors hereby irrevocably agree that the obligations of Holdings shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of Holdings that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of Holdings or any of the Note Guarantors in respect of the obligations of Holdings under this Article 12 or the Note Guarantors under Article 11, result in the obligations of Holdings under this Holdings Guarantee not being voidable under applicable law relating to a fraudulent conveyance or fraudulent transfer or similar law affecting the rights of creditors generally. If Holdings makes a payment under this Holdings Guarantee, then Holdings shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each Note Guarantor in an amount equal to such Note Guarantor’s pro rata portion of such payment based on the respective net assets of Holdings and each of the Note Guarantors at the time of such payment determined in accordance with GAAP.

Section 12.03.  Execution and Delivery .

To evidence the Holdings Guarantee set forth in Section 12.01 hereof, Holdings hereby agrees that this Indenture shall be executed on behalf of Holdings by its Chairman, President, its Chief Financial Officer, its Treasurer, its Assistant Treasurer, one of its Vice Presidents or one of its Assistant Vice Presidents.

Holdings hereby agrees that the Holdings Guarantee set forth in Section 12.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Holdings Guarantee on the Notes.

If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Holdings Guarantee shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Holdings Guarantee set forth in this Indenture on behalf of Holdings.

Section 12.04.  Subrogation .

Holdings shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by Holdings pursuant to the provisions of Section 12.01 hereof; provided that, if an Event of Default has occurred and is continuing, Holdings shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.

 

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Section 12.05.  Benefits Acknowledged .

Holdings acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to the Holdings Guarantee are knowingly made in contemplation of such benefits.

Section 12.06.  Release of Holdings Guarantee .

This Holdings Guarantee shall be automatically and unconditionally released and discharged, and no further action by Holdings, the Issuer, the Note Guarantors or the Trustee is required for the release of this Holdings Guarantee, upon:

(a) the Issuer ceasing to be a Subsidiary of Holdings; provided that any such transaction occurs in compliance with this Indenture; or

(b) Issuer’s obligations under this Indenture being discharged in accordance with the terms of this Indenture.

ARTICLE 13

SUBORDINATION OF NOTE GUARANTEES

Section 13.01.  Agreement To Subordinate .

Each Note Guarantor agrees, and each Holder by accepting a Note agrees, that the obligations of such Note Guarantor under its Note Guarantee are subordinated in right of payment, to the extent and in the manner provided in this Article 13, to the prior payment in full of all existing and future Senior Indebtedness of such Note Guarantor and that the subordination is for the benefit of and enforceable by the holders of such Senior Indebtedness. A Note Guarantor’s obligations under its Note Guarantee shall in all respects rank pari passu in right of payment with all existing and future senior subordinated Indebtedness of such Note Guarantor, and will be senior in right of payment to all existing and future Subordinated Indebtedness of such Note Guarantor; and only Indebtedness of such Note Guarantor that is Senior Indebtedness shall rank senior to the obligations of such Note Guarantor under its Note Guarantee in accordance with the provisions set forth herein. All provisions of this Article 13 shall be subject to Section 13.12.

Section 13.02.  Liquidation, Dissolution, Bankruptcy .

Upon any payment or distribution of the assets of a Note Guarantor to creditors upon a total or partial liquidation or a total or partial dissolution of such Note Guarantor or in a reorganization of or similar proceeding relating to such Note Guarantor or its property:

(1) the holders of Senior Indebtedness of such Note Guarantor shall be entitled to receive payment in full in cash of such Senior Indebtedness (including interest accruing after, or which would accrue but for, the commencement of any such proceeding at the rate specified in the applicable Senior Indebtedness, whether or not a claim for such interest would be allowed) before Holders of the Notes shall be entitled to receive any payment; and

(2) until the Senior Indebtedness of such Note Guarantor is paid in full in cash, any payment or distribution to which Holders of the Notes would be entitled but for the subordination provisions of this Article 13 shall be made to holders of such Senior Indebtedness as their interests may appear, except that Holders of the Notes may receive and retain (x) Permitted Junior Securities and (y)

 

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payments or deposits made pursuant to Article 15 so long as, on the date or dates the respective amounts were paid into the trust, such payments were made with respect to the Notes without violating the subordination provisions described herein; and

(3) if a distribution is made to Holders of the Notes that, due to the subordination provisions, should not have been made to them, such Holders of the Notes are required to hold it in trust for the holders of Senior Indebtedness of such Note Guarantor and pay it over to them as their interests may appear.

Section 13.03.  Default on Senior Indebtedness of a Note Guarantor .

A Note Guarantor shall not make any payment pursuant to its Note Guarantee (or pay any other Obligations relating to its Note Guarantee, including Additional Interest, fees, costs, expenses, indemnities and rescission or damage claims) and may not purchase, redeem or otherwise retire any Notes (collectively, “ pay its Note Guarantee ”) (except that Holders of the Notes may receive and retain (x) Permitted Junior Securities and (y) payments or deposits made pursuant to Article 15), if either of the following occurs (a “ Note Guarantor Payment Default ”):

(1) a default in the payment of the principal of, premium, if any, or interest on any Designated Senior Indebtedness of the Issuer occurs and is continuing or any other amount owing in respect of any Designated Senior Indebtedness of the Issuer is not paid when due, or

(2) any other default on Designated Senior Indebtedness of the Issuer occurs and the maturity of such Designated Senior Indebtedness of the Issuer is accelerated in accordance with its terms,

unless, in either case, the Note Guarantor Payment Default has been cured or waived and any such acceleration has been rescinded or such Designated Senior Indebtedness has been paid in full in cash; provided , however , that such Note Guarantor shall be entitled to pay its Note Guarantee without regard to the foregoing if such Note Guarantor and the Trustee receive written notice approving such payment from the Representatives of all Designated Senior Indebtedness with respect to which the Note Guarantor Payment Default has occurred and is continuing.

During the continuance of any default (other than a Note Guarantor Payment Default) (a “ Note Guarantor Non-Payment Default ”) with respect to any Designated Senior Indebtedness of a Note Guarantor pursuant to which the maturity thereof may be accelerated without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, such Note Guarantor shall not pay its Note Guarantee (except in the form of Permitted Junior Securities) for a period (a “ Guarantee Payment Blockage Period ”) commencing upon the receipt by the Trustee (with a copy to such Note Guarantor and the Issuer) of written notice (a “ Guarantee Blockage Notice ”) of such Note Guarantor Non-Payment Default from the Representative of such Designated Senior Indebtedness specifying an election to effect a Guarantee Payment Blockage Period and ending 179 days thereafter, unless earlier terminated as provided below. So long as there shall remain outstanding any Senior Indebtedness under the Credit Agreement, a Guarantee Blockage Notice may be given only by the administrative agent thereunder unless otherwise agreed to in writing by the requisite lenders named therein. The Guarantee Payment Blockage Period shall end earlier if such Guarantee Payment Blockage Period is terminated (i) by written notice to the Trustee, the relevant Note Guarantor and the Issuer from the Person or Persons who gave such Guarantee Blockage Notice; (ii) because the default giving rise to such Guarantee Blockage Notice is cured, waived or otherwise no longer continuing; or (iii) because such Designated Senior Indebtedness has been repaid in full in cash.

Notwithstanding the provisions described in the immediately preceding paragraph (but subject to the provisions contained in the first paragraph of this Section 13.03 and Section 13.02 hereof),

 

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unless the holders of such Designated Senior Indebtedness or the Representative of such Designated Senior Indebtedness shall have accelerated the maturity of such Designated Senior Indebtedness or a Note Guarantor Payment Default exists, the relevant Note Guarantor shall be permitted to resume paying its Note Guarantee after the end of such Guarantee Payment Blockage Period. Each Note Guarantor shall not be subject to more than one Guarantee Payment Blockage Period in any consecutive 360-day period, irrespective of the number of defaults with respect to Designated Senior Indebtedness of the relevant Note Guarantee during such period; provided that if any Guarantee Blockage Notice is delivered to the Trustee by or on behalf of the holders of Designated Senior Indebtedness of such Note Guarantor (other than the holders of Indebtedness under the Credit Agreement), a Representative of holders of Indebtedness under the Credit Agreement may give another Guarantee Blockage Notice within such period. However, in no event shall the total number of days during which any Guarantee Payment Blockage Period or Periods on a Note Guarantor is in effect exceed 179 days in the aggregate during any consecutive 360-day period. Notwithstanding the foregoing, however, no default that existed or was continuing on the date of delivery of any Guarantee Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Guarantee Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenants during the period after the date of delivery of a Guarantee Blockage Notice, that, in either case, would give rise to a Note Guarantor Non-Payment Default pursuant to any provisions of the Designated Senior Indebtedness under which a Note Guarantor Non-Payment Default previously existed or was continuing shall constitute a new Note Guarantor Non-Payment Default for this purpose).

Section 13.04.  Demand for Payment .

If payment of the Notes is accelerated because of an Event of Default and a demand for payment is made on a Note Guarantor pursuant to Article 11 hereof, the Issuer, the Trustee or such Note Guarantor shall promptly notify the holders of the Designated Senior Indebtedness of such Note Guarantor or the Representative of such Designated Senior Indebtedness of such demand; provided that any failure to give such notice shall have no effect whatsoever on the provisions of this Article 13. If any Designated Senior Indebtedness of a Note Guarantor is outstanding, such Note Guarantor may not pay its Note Guarantee until five Business Days after the Representatives of all of such Designated Senior Indebtedness receive notice of such acceleration and, thereafter, may pay its Note Guarantee only if this Indenture otherwise permits payment at that time.

Section 13.05.  When Distribution Must Be Paid Over .

If a distribution is made to Holders that, due to the subordination provisions, should not have been made to them, such Holders are required to hold it in trust for the holders of Senior Indebtedness of the relevant Note Guarantor and pay it over to them as their interests may appear.

Section 13.06.  Subrogation .

After all Senior Indebtedness of a Note Guarantor is paid in full and until the Notes are paid in full, Holders shall be subrogated to the rights of holders of such Senior Indebtedness to receive distributions applicable to such Senior Indebtedness. A distribution made under this Article 13 to holders of such Senior Indebtedness which otherwise would have been made to Holders is not, as between the relevant Note Guarantor and Holders, a payment by such Note Guarantor on such Senior Indebtedness.

Section 13.07.  Relative Rights .

This Article 13 defines the relative rights of Holders and holders of Senior Indebtedness of a Note Guarantor. Nothing in this Indenture shall:

 

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(1) impair, as between such Note Guarantor and Holders, the obligation of such Note Guarantor, which is absolute and unconditional, to make payments under its Note Guarantee in accordance with its terms;

(2) prevent the Trustee or any Holder from exercising its available remedies upon a default by such Note Guarantor under its obligations with respect to its Note Guarantee, subject to the rights of holders of Senior Indebtedness of such Note Guarantor to receive payments or distributions otherwise payable to Holders and such other rights of such holders of Senior Indebtedness as set forth herein; or

(3) affect the relative rights of Holders and creditors of such Note Guarantor other than their rights in relation to holders of Senior Indebtedness.

Section 13.08.  Subordination May Not Be Impaired by a Note Guarantor .

No right of any holder of Senior Indebtedness of a Note Guarantor to enforce the subordination of the obligations of such Note Guarantor under its Note Guarantee shall be impaired by any act or failure to act by such Note Guarantor or by its failure to comply with this Indenture.

Section 13.09.  Rights of Trustee and Paying Agent .

Notwithstanding Section 13.03 hereof, the Trustee or any Paying Agent may continue to make payments on the Notes and shall not be charged with knowledge of the existence of facts that would prohibit the making of any payments unless, not less than three Business Days prior to the date of such payment, a Trust Officer at the Corporate Trust Office of the Trustee receives notice satisfactory to him that payments may not be made under this Article 13; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 7.01, shall be entitled in all respects to assume that no such facts exist; provided , however , that if a Trust Officer of the Trustee shall not have received, at least three Business Days prior to the date upon which by the terms hereof any such money may become payable for any purpose (including, without limitation, the payment of principal, premium, if any, interest, Additional Interest, the Redemption Price or the Change of Control Payment, as the case may be, in respect of any Note), the notice with respect to such money provided for in this Section 13.09 then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within three Business Days prior to such date. A Note Guarantor, a Representative, a holder of Senior Indebtedness of such Note Guarantor, any trustee or agent thereof shall be entitled to give the notice; provided , however , that, if an issue of Senior Indebtedness of such Note Guarantor has a Representative, only the Representative shall be entitled to give the notice.

The Trustee in its individual or any other capacity shall be entitled to hold Senior Indebtedness of a Note Guarantor with the same rights it would have if it were not Trustee. The Registrar and the Paying Agent shall be entitled to do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article 13 with respect to any Senior Indebtedness of a Note Guarantor which may at any time be held by it, to the same extent as any other holder of such Senior Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing in this Article 13 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof or any other Section of this Indenture.

 

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Section 13.10.  Distribution or Notice to Representative .

Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness of a Note Guarantor, the distribution may be made and the notice given to their Representative (if any).

Section 13.11.  Article 13 Not To Prevent Events of Default or Limit Right To Demand Payment .

The failure of a Note Guarantor to make a payment pursuant to its Note Guarantee by reason of any provision in this Article 13 shall not be construed as preventing the occurrence of a default by such Note Guarantor under its Note Guarantee. Nothing in this Article 13 shall have any effect on the right of the Holders or the Trustee to make a demand for payment on a Note Guarantor pursuant to Article 11 hereof.

Section 13.12.  Payment Moneys Not Subordinated .

Notwithstanding anything contained herein to the contrary, payments from money held by the Trustee pursuant to Section 15.01 shall not be subordinated to the prior payment of any Senior Indebtedness of any Note Guarantor or subject to the restrictions set forth in this Article 13, and none of the Holders shall be obligated to pay over any such amount to such Note Guarantor or any holder of Senior Indebtedness of such Note Guarantor or any other creditor of such Note Guarantor, provided that the subordination provisions of this Article 13 were not violated at the time the applicable amounts were deposited pursuant to Section 15.01 hereof.

Section 13.13.  Trustee Entitled To Rely .

Upon any payment or distribution pursuant to this Article 13, the Trustee and the Holders shall be entitled to conclusively rely (a) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 13.02 hereof are pending, (b) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (c) upon the Representatives of Senior Indebtedness of a Note Guarantor for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of such Senior Indebtedness and other Indebtedness of such Note Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 13. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Indebtedness of a Note Guarantor to participate in any payment or distribution pursuant to this Article 13, the Trustee shall be entitled to request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article 13, and, if such evidence is not furnished, the Trustee shall be entitled to defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 hereof shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article 13.

Section 13.14.  Trustee To Effectuate Subordination .

A Holder by its acceptance of a Note agrees to be bound by this Article 13 and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be necessary or appropriate to effectuate the subordination between the Holders and the holders of Senior Indebtedness of a Note Guarantor as provided in this Article 13 and appoints the Trustee as attorney-in-fact for any and all such purposes.

 

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Section 13.15.  Trustee Not Fiduciary for Holders of Senior Indebtedness of Note Guarantors .

The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of a Note Guarantor and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders or such Note Guarantor or any other Person, money or assets to which any holders of Senior Indebtedness of such Note Guarantor shall be entitled by virtue of this Article 13 or otherwise.

Section 13.16.  Reliance by Holders of Senior Indebtedness of a Note Guarantor on Subordination Provisions .

Each Holder by accepting a Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness of a Note Guarantor, whether such Senior Indebtedness was created or acquired before or after the issuance of the Notes, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness and such holder of such Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness.

Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness of a Note Guarantor may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Trustee or the Holders and without impairing or releasing the subordination provided in this Article 13 or the obligations hereunder of the Holders to the holders of the Senior Indebtedness of such Note Guarantor, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness of such Note Guarantor, or otherwise amend or supplement in any manner Senior Indebtedness of such Note Guarantor, or any instrument evidencing the same or any agreement under which Senior Indebtedness of such Note Guarantor is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness of such Note Guarantor; (iii) release any Person liable in any manner for the payment or collection of Senior Indebtedness of such Note Guarantor; and (iv) exercise or refrain from exercising any rights against such Note Guarantor and any other Person.

ARTICLE 14

SUBORDINATION OF HOLDINGS GUARANTEE

Section 14.01.  Agreement To Subordinate .

Holdings agrees, and each Holder by accepting a Note agrees, that the obligations of Holdings under its Holdings Guarantee are subordinated in right of payment, to the extent and in the manner provided in this Article 14, to the prior payment in full of all existing and future Holdings Senior Indebtedness and that the subordination is for the benefit of and enforceable by the holders of such Holdings Senior Indebtedness. Holdings’ obligations under its Holdings Guarantee shall in all respects rank pari passu in right of payment with all existing and future Holdings Pari Passu Indebtedness of Holdings, and will be senior in right of payment to all existing and future Holdings Subordinated Indebtedness of Holdings; and only Indebtedness of Holdings that is Holdings Senior Indebtedness shall rank senior to the obligations of Holdings under its Holdings Guarantee in accordance with the provisions set forth herein. All provisions of this Article 14 shall be subject to Section 14.12.

 

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Section 14.02.  Liquidation, Dissolution, Bankruptcy .

Upon any payment or distribution of the assets of Holdings to creditors upon a total or partial liquidation or a total or partial dissolution of Holdings or in a reorganization of or similar proceeding relating to Holdings or its property:

(1) the holders of Holdings Senior Indebtedness shall be entitled to receive payment in full in cash of such Holdings Senior Indebtedness (including interest accruing after, or which would accrue but for, the commencement of any such proceeding at the rate specified in the applicable Holdings Senior Indebtedness, whether or not a claim for such interest would be allowed) before Holders of the Notes shall be entitled to receive any payment; and

(2) until the Holdings Senior Indebtedness is paid in full in cash, any payment or distribution to which Holders of the Notes would be entitled but for the subordination provisions of this Article 14 shall be made to holders of such Holdings Senior Indebtedness as their interests may appear, except that Holders of the Notes may receive and retain, so long as the Holders are not in the same or a higher class of creditors in such liquidation, dissolution or proceeding as the holders of the Holdings Senior Indebtedness, shares of stock and any debt securities that are subordinated to Holdings Senior Indebtedness to at least the same extent as the Holdings Guarantee (such stock and debt securities referred to herein as “ Holdings Permitted Junior Securities ”); and

(3) if a distribution is made to Holders of the Notes that, due to the subordination provisions, should not have been made to them, such Holders of the Notes are required to hold it in trust for the holders of Holdings Senior Indebtedness and pay it over to them as their interests may appear.

Section 14.03.  Default on Holdings Senior Indebtedness .

Holdings shall not make any payment pursuant to its Holdings Guarantee (or pay any other Obligations relating to its Holdings Guarantee, including Additional Interest, fees, costs, expenses, indemnities and rescission or damage claims) and may not purchase, redeem or otherwise retire any Notes (collectively, “ pay its Holdings Guarantee ”) (except that Holders of the Notes may receive and retain (x) Holdings Permitted Junior Securities and (y) payments or deposits made pursuant to Article 15), if either of the following occurs (a “ Holdings Payment Default ”):

(1) a default in the payment of the principal of, premium, if any, or interest on any Holdings Senior Indebtedness occurs and is continuing or any other amount owing in respect of any Holdings Senior Indebtedness is not paid when due, or

(2) any other default on Holdings Senior Indebtedness occurs and the maturity of such Holdings Senior Indebtedness is accelerated in accordance with its terms,

unless, in either case, the Holdings Payment Default has been cured or waived and any such acceleration has been rescinded or such Holdings Senior Indebtedness has been paid in full in cash; provided , however , that Holdings shall be entitled to pay its Holdings Guarantee without regard to the foregoing if Holdings and the Trustee receive written notice approving such payment from the Holdings Representatives of all Holdings Senior Indebtedness with respect to which the Holdings Payment Default has occurred and is continuing.

During the continuance of any default (other than a Holdings Payment Default) (a “ Holdings Non-Payment Default ”) with respect to any Holdings Senior Indebtedness pursuant to which the maturity thereof may be accelerated without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, Holdings shall not pay its

 

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Holdings Guarantee (except in the form of Holdings Permitted Junior Securities) for a period (a “ Holdings Guarantee Payment Blockage Period ”) commencing upon the receipt by the Trustee (with a copy to Holdings and the Issuer) of written notice (a “ Holdings Guarantee Blockage Notice ”) of such Holdings Non-Payment Default from the Holdings Representative of such Holdings Senior Indebtedness specifying an election to effect a Holdings Guarantee Payment Blockage Period and ending 179 days thereafter. The Holdings Guarantee Payment Blockage Period shall end earlier if such Holdings Guarantee Payment Blockage Period is terminated (i) by written notice to the Trustee, Holdings and the Issuer from the Person or Persons who gave such Holdings Guarantee Blockage Notice; (ii) because the default giving rise to such Holdings Guarantee Blockage Notice is cured, waived or otherwise no longer continuing; or (iii) because such Holdings Senior Indebtedness has been repaid in full in cash.

Notwithstanding the provisions described in the immediately preceding paragraph (but subject to the provisions contained in the first sentence of this Section 14.03 and Section 14.02 hereof), unless the holders of such Holdings Senior Indebtedness or the Holdings Representative of such Holdings Senior Indebtedness shall have accelerated the maturity of such Holdings Senior Indebtedness or a Holdings Payment Default exists, Holdings shall be permitted to resume paying its Holdings Guarantee after the end of such Holdings Guarantee Payment Blockage Period. Holdings shall not be subject to more than one Holdings Guarantee Payment Blockage Period in any consecutive 360-day period, irrespective of the number of defaults with respect to Holdings Senior Indebtedness during such period. However, in no event shall the total number of days during which any Holdings Guarantee Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate during any consecutive 360-day period. Notwithstanding the foregoing, however, no default that existed or was continuing on the date of delivery of any Holdings Guarantee Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Holdings Guarantee Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenants during the period after the date of delivery of a Holdings Guarantee Blockage Notice, that, in either case, would give rise to a Holdings Non-Payment Default pursuant to any provisions of the Holdings Senior Indebtedness under which a Holdings Non-Payment Default previously existed or was continuing shall constitute a new Holdings Non-Payment Default for this purpose).

Section 14.04.  Demand for Payment .

If payment of the Notes is accelerated because of an Event of Default and a demand for payment is made on Holdings pursuant to Article 12 hereof, the Issuer, the Trustee or Holdings shall promptly notify the holders of the Holdings Senior Indebtedness or the Holdings Representative of such Holdings Senior Indebtedness of such demand; provided that any failure to give such notice shall have no effect whatsoever on the provisions of this Article 14. If any Holdings Senior Indebtedness is outstanding, Holdings may not pay its Holdings Guarantee until five Business Days after the Holdings Representatives of all of such Holdings Senior Indebtedness receive notice of such acceleration and, thereafter, may pay its Holdings Guarantee only if this Indenture otherwise permits payment at that time.

Section 14.05.  When Distribution Must Be Paid Over .

If a distribution is made to Holders that, due to the subordination provisions, should not have been made to them, such Holders are required to hold it in trust for the holders of Holdings Senior Indebtedness and pay it over to them as their interests may appear.

Section 14.06.  Subrogation .

After all Holdings Senior Indebtedness is paid in full and until the Notes are paid in full, Holders shall be subrogated to the rights of holders of such Holdings Senior Indebtedness to receive

 

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distributions applicable to such Holdings Senior Indebtedness. A distribution made under this Article 14 to holders of such Holdings Senior Indebtedness which otherwise would have been made to Holders is not, as between Holdings and Holders, a payment by Holdings on such Holdings Senior Indebtedness.

Section 14.07.  Relative Rights .

This Article 14 defines the relative rights of Holders and holders of Holdings Senior Indebtedness. Nothing in this Indenture shall:

(1) impair, as between Holdings and Holders, the obligation of Holdings, which is absolute and unconditional, to make payments under its Holdings Guarantee in accordance with its terms;

(2) prevent the Trustee or any Holder from exercising its available remedies upon a default by Holdings under its obligations with respect to its Holdings Guarantee, subject to the rights of holders of Holdings Senior Indebtedness to receive payments or distributions otherwise payable to Holders and such other rights of such holders of Holdings Senior Indebtedness as set forth herein; or

(3) affect the relative rights of Holders and creditors of Holdings other than their rights in relation to holders of Holdings Senior Indebtedness.

Section 14.08.  Subordination May Not Be Impaired by Holdings .

No right of any holder of Holdings Senior Indebtedness to enforce the subordination of the obligations of Holdings under its Holdings Guarantee shall be impaired by any act or failure to act by Holdings or by its failure to comply with this Indenture.

Section 14.09.  Rights of Trustee and Paying Agent .

Notwithstanding Section 14.03 hereof, the Trustee or any Paying Agent may continue to make payments on the Notes and shall not be charged with knowledge of the existence of facts that would prohibit the making of any payments unless, not less than three Business Days prior to the date of such payment, a Trust Officer at the Corporate Trust Office of the Trustee receives notice satisfactory to him that payments may not be made under this Article 14; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 7.01, shall be entitled in all respects to assume that no such facts exist; provided , however , that if a Trust Officer of the Trustee shall not have received, at least three Business Days prior to the date upon which by the terms hereof any such money may become payable for any purpose (including, without limitation, the payment of principal, premium, if any, interest, Additional Interest, the Redemption Price or the Change of Control Payment, as the case may be, in respect of any Note), the notice with respect to such money provided for in this Section 14.09 then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within three Business Days prior to such date. Holdings, a Holdings Representative, a holder of Holdings Senior Indebtedness or any trustee or agent thereof shall be entitled to give the notice; provided , however , that, if an issue of Holdings Senior Indebtedness has a Holdings Representative, only the Holdings Representative shall be entitled to give the notice.

The Trustee in its individual or any other capacity shall be entitled to hold Holdings Senior Indebtedness with the same rights it would have if it were not Trustee. The Registrar and the Paying Agent shall be entitled to do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article 14 with respect to any Holdings Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of such Holdings Senior Indebtedness; and nothing in

 

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Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing in this Article 14 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof or any other Section of this Indenture.

Section 14.10.  Distribution or Notice to Holdings Representative .

Whenever a distribution is to be made or a notice given to holders of Holdings Senior Indebtedness, the distribution may be made and the notice given to their Holdings Representative (if any).

Section 14.11.  Article 14 Not To Prevent Events of Default or Limit Right To Demand Payment .

The failure of Holdings to make a payment pursuant to the Holdings Guarantee by reason of any provision in this Article 14 shall not be construed as preventing the occurrence of a default by Holdings under Holdings Guarantee. Nothing in this Article 14 shall have any effect on the right of the Holders or the Trustee to make a demand for payment on Holdings pursuant to Article 12 hereof.

Section 14.12.  Payment Moneys Not Subordinated .

Notwithstanding anything contained herein to the contrary, payments from money held by the Trustee pursuant to Section 15.01 shall not be subordinated to the prior payment of any Holdings Senior Indebtedness or subject to the restrictions set forth in this Article 14, and none of the Holders shall be obligated to pay over any such amount to Holdings or any holder of Holdings Senior Indebtedness or any other creditor of Holdings, provided that the subordination provisions of this Article 14 were not violated at the time the applicable amounts were deposited pursuant to Section 15.01 hereof.

Section 14.13.  Trustee Entitled To Rely .

Upon any payment or distribution pursuant to this Article 14, the Trustee and the Holders shall be entitled to conclusively rely (a) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 14.02 hereof are pending, (b) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (c) upon the Holdings Representatives of Holdings Senior Indebtedness for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of such Holdings Senior Indebtedness and other Indebtedness of Holdings, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 14. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Holdings Senior Indebtedness to participate in any payment or distribution pursuant to this Article 14, the Trustee shall be entitled to request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Holdings Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article 14, and, if such evidence is not furnished, the Trustee shall be entitled to defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 hereof shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article 14.

Section 14.14.  Trustee To Effectuate Subordination .

A Holder by its acceptance of a Note agrees to be bound by this Article 14 and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be necessary or appropriate to effectuate the subordination between the Holders and the holders of Holdings Senior Indebtedness as provided in this Article 14 and appoints the Trustee as attorney-in-fact for any and all such purposes.

 

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Section 14.15.  Trustee Not Fiduciary for Holders of Holdings Senior Indebtedness .

The Trustee shall not be deemed to owe any fiduciary duty to the holders of Holdings Senior Indebtedness and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders or Holdings or any other Person, money or assets to which any holders of Holdings Senior Indebtedness shall be entitled by virtue of this Article 14 or otherwise.

Section 14.16.  Reliance by Holders of Holdings Senior Indebtedness on Subordination Provisions .

Each Holder by accepting a Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Holdings Senior Indebtedness, whether such Holdings Senior Indebtedness was created or acquired before or after the issuance of the Notes, to acquire and continue to hold, or to continue to hold, such Holdings Senior Indebtedness and such holder of such Holdings Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Holdings Senior Indebtedness.

Without in any way limiting the generality of the foregoing paragraph, the holders of Holdings Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Trustee or the Holders and without impairing or releasing the subordination provided in this Article 14 or the obligations hereunder of the Holders to the holders of the Holdings Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Holdings Senior Indebtedness, or otherwise amend or supplement in any manner Holdings Senior Indebtedness, or any instrument evidencing the same or any agreement under which Holdings Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Holdings Senior Indebtedness; (iii) release any Person liable in any manner for the payment or collection of Holdings Senior Indebtedness; and (iv) exercise or refrain from exercising any rights against Holdings and any other Person.

ARTICLE 15

DISCHARGE

Section 15.01.  Discharge .

(a) When (i) the Issuer delivers to the Trustee all Notes (other than Notes replaced pursuant to Section 2.07) for cancellation or (ii) all Notes have become due and payable and/or have been converted and the Issuer deposits with the Trustee, the Payment Agent or the Conversion Agent, as applicable, cash and/or shares of Common Stock (or Reference Property), as applicable under this Indenture, sufficient to pay all amounts due and owing on all Notes and to deliver all shares of Common Stock (or Reference Property) due in respect of all converted Notes (other than, in each case, Notes replaced pursuant to Section 2.07), and if in either case the Issuer pays all other sums payable hereunder by the Issuer, then this Indenture shall, subject to Section 7.07, cease to be of further effect. The Trustee shall join in the execution of a document prepared by the Issuer acknowledging discharge of this Indenture on demand of the Issuer accompanied by an Officer’s Certificate and Opinion of Counsel and at the cost and expense of the Issuer.

(b) Notwithstanding the discharge of this Indenture, if money shall have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of this Section 15.01, the provisions of Section 15.02 shall survive.

 

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Section 15.02.  Repayment to the Issuer .

The Trustee, the Payment Agent or the Conversion Agent, as applicable, shall return to the Issuer upon written request any money or shares of Common Stock (or Reference Property) held by them for the payment of any amount with respect to the Notes that remains unclaimed for two years, subject to applicable unclaimed property law. After return to the Issuer, Holders entitled to the money or shares of Common Stock (or Reference Property) must look to the Issuer for payment as general creditors unless an applicable abandoned property law designates another Person, and the Trustee, the Payment Agent or the Conversion Agent, as applicable, shall have no further liability to the Holders with respect to such money or shares of Common Stock (or Reference Property) for that period commencing after the return thereof.

ARTICLE 16

MISCELLANEOUS

Section 16.01.  TIA Controls .

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA Section 318(c), the imposed duties shall control.

Section 16.02.  Notices .

Any notice or communication by the Issuer, Holdings any Note Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), fax or overnight air courier guaranteeing next day delivery, to the others’ addresses:

If to the Issuer and/or Holdings and/or any Note Guarantor:

c/o Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

If to the Trustee:

The Bank of New York Mellon Trust Company, N.A.

525 William Penn Place, 38th Floor

Pittsburgh, Pennsylvania 15259

Fax No.: (412) 234-7535

Attention: Corporate Trust Administration

The Issuer, Holdings, any Note Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five calendar days after being deposited in the mail, postage prepaid, if mailed by first-class mail; when receipt acknowledged, if faxed; and the next Business Day after timely delivery to the courier, if sent by overnight air courier

 

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guaranteeing next day delivery; provided that any notice or communication delivered to the Trustee shall be deemed effective upon actual receipt thereof.

Any notice or communication to a Holder shall be mailed by first-class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar or by other electronic means or such other delivery system as the Trustee agrees to accept. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

If the Issuer mails a notice or communication to Holders, they shall mail a copy to the Trustee and each Agent at the same time.

The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

Notwithstanding anything to the contrary contained herein, as long as the Notes are in the form of a Global Note, notice to the Holders may be made electronically in accordance with procedures of the Depositary.

Section 16.03.  Communication by Holders of Notes with Other Holders of Notes .

Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).

Section 16.04.  Certificate and Opinion as to Conditions Precedent .

Upon any request or application by the Issuer, Holdings or any of the Note Guarantors to the Trustee to take any action under this Indenture, the Issuer, Holdings or such Note Guarantor, as the case may be, shall furnish to the Trustee:

(i) An Officer’s Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 16.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(ii) An Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 16.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

 

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Section 16.05.  Statements Required in Certificate or Opinion .

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to Section 4.04 hereof or TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include:

(i) a statement that the Person making such certificate or opinion has read such covenant or condition;

(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(iii) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may be limited to reliance on an Officer’s Certificate as to matters of fact); and

(iv) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

Section 16.06.  Rules by Trustee and Agents .

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

Section 16.07.  No Personal Liability of Directors, Officers, Employees and Stockholders .

No director, officer, employee, manager, incorporator or holder of any Equity Interest of the Issuer, Holdings or any Note Guarantor or any direct or indirect parent corporation, as such, shall have any liability for any obligations of the Issuer, Holdings or the Note Guarantors under the Notes, the Holdings Guarantee, the Note Guarantees or this Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

Section 16.08.  Governing Law .

THIS INDENTURE, THE NOTES, THE HOLDINGS GUARANTEE AND ANY NOTE GUARANTEE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 16.09.  Waiver of Jury Trial .

EACH OF THE ISSUER, HOLDINGS, THE NOTE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES, THE HOLDINGS GUARANTEE, THE NOTE GUARANTEES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

96


Section 16.10.  Force Majeure .

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused by, directly or indirectly, any forces beyond its reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services.

Section 16.11.  No Adverse Interpretation of Other Agreements .

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuer, Holdings or their respective Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 16.12.  Successors .

All agreements of the Issuer in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of Holdings and each Note Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 11.06 and Section 12.06 hereof.

Section 16.13.  Severability .

In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 16.14.  Counterpart Originals .

The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

Section 16.15.  Table of Contents, Headings, etc.

The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

Section 16.16.  Qualification of Indenture .

The Issuer, Holdings and the Note Guarantors shall qualify this Indenture under the TIA in accordance with the terms and conditions of the Registration Rights Agreement and shall pay all reasonable costs and expenses (including attorneys’ fees and expenses for the Issuer, Holdings, the Note Guarantors and the Trustee) incurred in connection therewith, including, but not limited to, costs and expenses of qualification of this Indenture and the Notes and printing this Indenture and the Notes. The Trustee shall be entitled to receive from the Issuer, Holdings and the Note Guarantors any such Officer’s Certificates, Opinions of Counsel or other documentation as it may reasonably request in connection with any such qualification of this Indenture under the TIA.

[ Signatures on following page ]

 

97


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

 

REALOGY CORPORATION

By:   /s/ Anthony E. Hull
  Name: Anthony E. Hull
  Title: EVP, CFO & Treasurer

DOMUS HOLDINGS CORP.

By:   /s/ Anthony E. Hull
  Name: Anthony E. Hull
  Title: EVP, CFO & Treasurer

 

[Convertible Senior Subordinated Notes Indenture]


CARTUS CORPORATION

CDRE TM LLC

NRT INSURANCE AGENCY, INC.

REALOGY OPERATIONS LLC

REALOGY SERVICES GROUP LLC

REALOGY SERVICES VENTURE PARTNER LLC

SOTHEBY’S INTERNATIONAL REALTY LICENSEE LLC

WREM, INC.

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Chief Financial Officer

 

[Convertible Senior Subordinated Notes Indenture]


ASSOCIATES REALTY, INC.

CARTUS ASSET RECOVERY CORPORATION

CARTUS PARTNER CORPORATION

FEDSTATE STRATEGIC CONSULTING,

INCORPORATED

J.W. RIKER – NORTHERN R.I., INC.

LAKECREST TITLE, LLC

NRT PHILADELPHIA LLC

REFERRAL NETWORK LLC

THE CORCORAN GROUP EASTSIDE, INC.

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Executive Vice President & Treasurer

 

[Convertible Senior Subordinated Notes Indenture]


AMERICAN TITLE COMPANY OF HOUSTON

ATCOH HOLDING COMPANY

BURNET TITLE LLC

BURNET TITLE HOLDING LLC

BURROW ESCROW SERVICES, INC.

CORNERSTONE TITLE COMPANY

EQUITY TITLE COMPANY

EQUITY TITLE MESSENGER SERVICE HOLDING LLC

FIRST CALIFORNIA ESCROW CORPORATION

FRANCHISE SETTLEMENT SERVICES LLC

GUARDIAN HOLDING COMPANY

GUARDIAN TITLE AGENCY, LLC

GUARDIAN TITLE COMPANY

GULF SOUTH SETTLEMENT SERVICES, LLC

KEYSTONE CLOSING SERVICES LLC

MARKET STREET SETTLEMENT GROUP LLC

MID-ATLANTIC SETTLEMENT SERVICES LLC

NATIONAL COORDINATION ALLIANCE LLC

NRT SETTLEMENT SERVICES OF MISSOURI LLC

NRT SETTLEMENT SERVICES OF TEXAS LLC

PROCESSING SOLUTIONS LLC

SECURED LAND TRANSFERS LLC

ST. JOE TITLE SERVICES LLC

TAW HOLDING INC.

TEXAS AMERICAN TITLE COMPANY

TITLE RESOURCE GROUP AFFILIATES HOLDINGS LLC

TITLE RESOURCE GROUP HOLDINGS LLC

TITLE RESOURCE GROUP LLC

TITLE RESOURCE GROUP SERVICES LLC

TITLE RESOURCES INCORPORATED

TRG SERVICES, ESCROW, INC.

TRG SETTLEMENT SERVICES, LLP

WAYDAN TITLE, INC.

WEST COAST ESCROW COMPANY

By:   /s/ Thomas N. Rispoli
Name:   Thomas N. Rispoli
Title:   Chief Financial Officer

 

[Convertible Senior Subordinated Notes Indenture]


BETTER HOMES AND GARDENS REAL ESTATE LLC

BETTER HOMES AND GARDENS REAL ESTATE LICENSEE LLC

CENTURY 21 REAL ESTATE LLC

CGRN, INC.

COLDWELL BANKER LLC

COLDWELL BANKER REAL ESTATE LLC

ERA FRANCHISE SYSTEMS LLC

GLOBAL CLIENT SOLUTIONS LLC

ONCOR INTERNATIONAL LLC

REALOGY FRANCHISE GROUP LLC

REALOGY GLOBAL SERVICES LLC

REALOGY LICENSING LLC

SOTHEBY’S INTERNATIONAL REALTY AFFILIATES LLC

WORLD REAL ESTATE MARKETING LLC

By:   /s/ Andrew G. Napurano
Name:   Andrew G. Napurano
Title:   Chief Financial Officer

 

[Convertible Senior Subordinated Notes Indenture]


FSA MEMBERSHIP SERVICES, LLC

By:   /s/ Marilyn Wasser
Name:   Marilyn J. Wasser
Title:   Executive Vice President

 

[Convertible Senior Subordinated Notes Indenture]


ALPHA REFERRAL NETWORK LLC

ASSOCIATED CLIENT REFERRAL LLC

ASSOCIATES REALTY NETWORK

BURGDORFF LLC

BURGDORFF REFERRAL ASSOCIATES LLC

BURNET REALTY LLC

CAREER DEVELOPMENT CENTER, LLC

COLDWELL BANKER COMMERCIAL PACIFIC PROPERTIES LLC

COLDWELL BANKER PACIFIC PROPERTIES LLC

COLDWELL BANKER REAL ESTATE SERVICES LLC

COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY

COLDWELL BANKER RESIDENTIAL BROKERAGE LLC

COLDWELL BANKER RESIDENTIAL REAL ESTATE LLC

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK, INC.

COLORADO COMMERCIAL, LLC

HOME REFERRAL NETWORK LLC

JACK GAUGHEN LLC

NRT ARIZONA LLC

NRT ARIZONA COMMERCIAL LLC

NRT ARIZONA REFERRAL LLC

NRT COLORADO LLC

NRT COLUMBUS LLC

NRT COMMERCIAL LLC

NRT COMMERCIAL UTAH LLC

NRT DEVELOPMENT ADVISORS LLC

NRT DEVONSHIRE LLC

NRT HAWAII REFERRAL, LLC

NRT LLC

NRT MID-ATLANTIC LLC

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

 

[Convertible Senior Subordinated Notes Indenture]


NRT MISSOURI LLC

NRT MISSOURI REFERRAL NETWORK LLC

NRT NEW ENGLAND LLC

NRT NEW YORK LLC

NRT NORTHFORK LLC

NRT PITTSBURGH LLC

NRT REFERRAL NETWORK LLC

NRT RELOCATION LLC

NRT REOEXPERTS LLC

NRT SUNSHINE INC.

NRT TEXAS LLC

NRT UTAH LLC

REAL ESTATE REFERRAL LLC

REAL ESTATE REFERRALS LLC

REAL ESTATE SERVICES LLC

REFERRAL ASSOCIATES OF NEW ENGLAND LLC

REFERRAL NETWORK, LLC

REFERRAL NETWORK PLUS, INC.

SOTHEBY’S INTERNATIONAL REALTY, INC.

SOTHEBY’S INTERNATIONAL REALTY REFERRAL COMPANY, LLC

THE SUNSHINE GROUP (FLORIDA) LTD. CORP.

THE SUNSHINE GROUP, LTD.

VALLEY OF CALIFORNIA, INC.

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

 

[Convertible Senior Subordinated Notes Indenture]


THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
        By:    /s/ Justin Huff
  Name: Justin Huff
  Title: Senior Associate

 

[Convertible Senior Subordinated Notes Indenture]


Appendix A

PROVISIONS RELATING TO NOTES

Section 1.1 Definitions.

(a) Capitalized Terms.

Capitalized terms used but not defined in this Appendix A have the meanings given to them in the Indenture. The following capitalized terms have the following meanings:

IAI ” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

Institutional Accredited Investor Notes ” means all Definitive Notes offered and sold to IAIs in reliance on Regulation D under the Securities Act in connection with the exchange of the Existing Senior Subordinated Notes for Notes.

QIB ” means a “qualified institutional buyer” as defined in Rule 144A.

Rule 501 ” means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

Rule 144 ” means Rule 144 promulgated under the Securities Act.

Rule 144A ” means Rule 144A promulgated under the Securities Act.

Rule 144A Notes ” means all Notes offered and sold to QIBs in reliance on Rule 144A.

(b) Other Definitions.

 

Term:

   Defined in Section:  

“Agent Members”

     2.1 (d) 

“Automatic Exchange”

     2.3 (h) 

“Automatic Exchange Date”

     2.3 (h) 

“Automatic Exchange Notice”

     2.3 (h) 

“Automatic Exchange Notice Date”

     2.3 (h) 

“Global Note”

     2.1 (b) 

“IAI Global Note”

     2.1 (b) 

“Restricted Note”

     2.3 (h) 

“Rule 144A Global Note”

     2.1 (b) 

“Unrestricted Note”

     2.3 (h) 

Section 2.1 Form and Dating.

(a) The Notes issued on the date hereof will be offered and sold by the Issuer only to (1) QIBs in reliance on Section 4(2) of the Securities Act and (2) IAIs in reliance on Regulation D under


the Securities Act. Such Notes may thereafter be transferred to, among others, QIBs and IAIs in accordance with Rule 501.

(b)  Global Notes. Rule 144A Notes shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form (collectively, the “ Rule 144A Global Note ”), without interest coupons and bearing the Global Notes Legend, the Restricted Notes Legend and the OID Legend, which shall be registered in the name of the Depositary, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture. One or more Global Notes in definitive, fully registered form without interest coupons and bearing the Global Notes Legend, the Restricted Notes Legend and the OID Legend (collectively, the “ IAI Global Note ”) shall also be issued on the Issue Date, deposited with the Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture to accommodate transfers of beneficial interests in the Notes to IAIs subsequent to the initial distribution in the Existing Notes Exchange Offers. The Rule 144A Global Note and the IAI Global Note are each referred to herein as a “ Global Note ” and are collectively referred to herein as “ Global Notes ”. The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee and on the schedules thereto as hereinafter provided.

(c) Institutional Accredited Investor Notes. Institutional Accredited Investor Notes shall be issued initially in the form of one or more permanent Definitive Notes, without interest coupons and bearing the Restricted Notes Legend, the Definitive Notes Legend and the OID Legend, which shall be registered in the name of the beneficial owner or owners of such Note (or the nominee of such beneficial owner or owners) and delivered to the respective beneficial owner or owners (or the nominee of such beneficial owner or owners). Upon issuance, any such Institutional Accredited Investor Notes shall be duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture.

(d) Book-Entry Provisions. This Section 2.1(d) shall apply only to a Global Note deposited with or on behalf of the Depositary.

The Issuer shall execute and the Trustee shall, in accordance with this Section 2.1(d) and Section 2.2 and pursuant to an order of the Issuer signed by one Officer of the Issuer, authenticate and deliver initially one or more Global Notes that (i) shall be registered in the name of the Depositary for such Global Note or Global Notes or the nominee of such Depositary and (ii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions or held by the Trustee as Custodian.

Members of, or participants in, the Depositary (“ Agent Members ”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary or by the Trustee as Custodian or under such Global Note, and the Depositary may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Note.

(e) Definitive Notes. Except as provided in Section 2.3 or 2.4, owners of beneficial interests in Global Notes will not be entitled to receive physical delivery of certificated Notes.

Section 2.2 Authentication. The Trustee shall authenticate and make available for delivery upon an Issuer Order (a) Notes for issue on the date hereof and (b) upon an Automatic Exchange, Unrestricted

 

Appendix-2


Notes. Such Issuer Order shall specify the amount of the Notes to be authenticated, the date on which the Notes are to be authenticated and whether the Notes are Unrestricted Notes.

Section 2.3 Transfer and Exchange.

(a)  Transfer and Exchange of Definitive Notes. When Definitive Notes are presented to the Registrar with a request:

(i) to register the transfer of such Definitive Notes; or

(ii) to exchange such Definitive Notes for an equal principal amount of Definitive Notes of other authorized denominations,

the Registrar shall register the transfer or make the exchange as requested if the reasonable requirements for such transaction are met; provided , however , that the Definitive Notes surrendered for transfer or exchange:

(1) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing; and

(2) in the case of Transfer Restricted Notes, are accompanied by the following additional information and documents, as applicable:

(A) if such Definitive Notes are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect (in the form set forth on the reverse side of the Note); or

(B) if such Definitive Notes are being transferred to the Issuer, a certification to that effect (in the form set forth on the reverse side of the Note); or

(C) if such Definitive Notes are being transferred pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or in reliance upon another exemption from the registration requirements of the Securities Act, (x) a certification to that effect (in the form set forth in Exhibit B ) and (y) if the Issuer so requests, an opinion of counsel or other evidence reasonably satisfactory to them as to the compliance with the restrictions set forth in the legends set forth in Section 2.3(d)(i).

(b)  Restrictions on Transfer of a Definitive Note for a Beneficial Interest in a Global Note. A Definitive Note may not be exchanged for a beneficial interest in a Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Registrar, together with:

(i) certification (in the form set forth on the reverse side of the Note) that such Definitive Note is being transferred (1) to a QIB in accordance with Rule 144A, or (2) to an IAI that has furnished to the Trustee a signed letter substantially in the form of Exhibit B ; and

(ii) written instructions directing the Trustee to make, or to direct the Custodian to make, an adjustment on its books and records with respect to such Global Note to reflect an increase in the aggregate principal amount of the Notes represented by the Global Note, such instructions to contain information regarding the Depositary account to be credited with such increase, then the

 

Appendix-3


Trustee shall cancel such Definitive Note and cause, or direct the Custodian to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Custodian, the aggregate principal amount of Notes represented by the Global Note to be increased by the aggregate principal amount of the Definitive Note to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Note equal to the principal amount of the Definitive Note so canceled. If no Global Notes are then outstanding and the Global Note has not been previously exchanged for certificated securities pursuant to Section 2.4, the Issuer shall issue and the Trustee shall authenticate, upon an Issuer Order, a new Global Note in the appropriate principal amount.

(c)  Transfer and Exchange of Global Notes. (i) The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depositary, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depositary therefor. A transferor of a beneficial interest in a Global Note shall deliver a written order given in accordance with the Depositary’s procedures containing information regarding the participant account of the Depositary to be credited with a beneficial interest in such Global Note or another Global Note and such account shall be credited in accordance with such order with a beneficial interest in the applicable Global Note and the account of the Person making the transfer shall be debited by an amount equal to the beneficial interest in the Global Note being transferred. In the case of a transfer of a beneficial interest in the Rule 144A Global Note for an interest in the IAI Global Note, the transferee must furnish a signed letter substantially in the form of Exhibit B to the Trustee.

(ii) If the proposed transfer is a transfer of a beneficial interest in one Global Note to a beneficial interest in another Global Note, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of Global Note from which such interest is being transferred.

(iii) Notwithstanding any other provisions of this Appendix A (other than the provisions set forth in Section 2.4), a Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

(iv) In the event that a Global Note is exchanged for Definitive Notes pursuant to Section 2.4 prior to the effectiveness of a Shelf Registration Statement with respect to such Notes, such Notes may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Notes intended to ensure that such transfers comply with Rule 144A or such other applicable exemption from registration under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Issuer.

(d) Legend s.

(i) Except as permitted by the following paragraphs (ii), (iii) or (iv), each Note certificate evidencing the Global Notes and the Definitive Notes (and all Notes issued in exchange therefor or in substitution thereof) shall bear a legend (a “ Restricted Notes Legend” ) in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only):

 

Appendix-4


“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

(1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “ QIB ”) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER REGULATION D OF THE SECURITIES ACT (AN “ INSTITUTIONAL ACCREDITED INVESTOR ”),

(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144 (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO HOLDINGS OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN A TRANSACTION EXEMPT FROM THE REQUIREMENTS OF THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND

(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE.

In addition, each such Note shall bear a legend (an “ OID Legend ”) in substantially the following form:

THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“ OID ”) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED AT ANY TIME BEGINNING NO LATER THAN 10 DAYS AFTER JANUARY 5, 2011 BY WRITING TO: REALOGY CORPORATION, ONE CAMPUS DRIVE, PARSIPPANY, NJ 07054, ATTENTION: CHIEF FINANCIAL OFFICER.

 

Appendix-5


Each Definitive Note shall bear the following additional legend:

“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

(ii) Upon any sale or transfer of a Transfer Restricted Note that is a Definitive Note, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Note for a Definitive Note that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Note if the Holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Note).

(iii) After a transfer of any Notes pursuant to an effective Shelf Registration Statement with respect to such Notes all requirements pertaining to the Restricted Notes Legend on such Notes shall cease to apply and the requirements that any such Notes be issued in global form shall continue to apply.

(iv) All shares of Common Stock issued upon conversion of Notes bearing a Restricted Notes Legend shall bear the following legend until resold pursuant to an effective Shelf Registration Statement or in compliance with Rule 144 (each defined term in the legend being defined as such for purposes of the legend only):

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

(1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “ QIB ”) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER REGULATION D OF THE SECURITIES ACT (AN “ INSTITUTIONAL ACCREDITED INVESTOR ”),

(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144 (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO HOLDINGS OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN A TRANSACTION EXEMPT FROM THE REQUIREMENTS OF THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER

 

Appendix-6


THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND

(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

(v) After a transfer of any Notes pursuant to an effective Shelf Registration Statement with respect to such Notes all requirements pertaining to the Restricted Notes Legend on such Notes shall cease to apply and the requirements that any such Notes be issued in global form shall continue to apply.

(e) Cancellation or Adjustment of Global Note. At such time as all beneficial interests in a Global Note have either been exchanged for Definitive Notes, converted, transferred, redeemed, repurchased or canceled, such Global Note shall be returned by the Depositary to the Trustee for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for Definitive Notes, transferred in exchange for an interest in another Global Note, converted, redeemed, repurchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Custodian, to reflect such reduction.

(f)  Obligations with Respect to Transfers and Exchanges of Notes.

(i) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate, Definitive Notes and Global Notes at the Registrar’s request.

(ii) No service charge shall be made for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 2.07, 2.10, 3.06, 4.08, 8.02 and 9.05 of the Indenture).

(iii) Prior to the due presentation for registration of transfer of any Note, the Issuer, the Trustee, the Conversion Agent, the Paying Agent or the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuer, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.

(iv) All Notes issued upon any transfer or exchange pursuant to the terms of the Indenture shall evidence the same debt and shall be entitled to the same benefits under the Indenture as the Notes surrendered upon such transfer or exchange.

(g) No Obligation of the Trustee.

(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depositary or any other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with

 

Appendix-7


respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to the registered Holders (which shall be the Depositary or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners.

(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

(h) Automatic Exchange from Global Note Bearing Restricted Notes Legend to Global Note Not Bearing Restricted Notes Legend . Upon the Issuer’s satisfaction that the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act, beneficial interests in a Global Note or in a Definitive Note bearing the Restricted Notes Legend (a “ Restricted Note ”) may be automatically exchanged into beneficial interests in a Global Note or Definitive Note, as applicable, not bearing the Restricted Notes Legend (an “ Unrestricted Note ”) without any action required by or on behalf of the Holder (the “ Automatic Exchange ”) at any time on or after the date that is the 366th calendar day after the Issue Date or, if such day is not a Business Day, on the next succeeding Business Day (the “ Automatic Exchange Date ”). Upon the Issuer’s satisfaction that the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act, the Issuer may, but shall not be obligated to, pursuant to Applicable Procedures (i) provide written notice to DTC at least fifteen (15) calendar days prior to the Automatic Exchange Date, instructing DTC to exchange all of the outstanding beneficial interests in a particular Restricted Note to the Unrestricted Note, which the Issuer shall have previously otherwise made eligible for exchange with the DTC, (ii) provide prior written notice (the “ Automatic Exchange Notice ”) to each Holder at such Holder’s address appearing in the register of Holders at least fifteen (15) calendar days prior to the Automatic Exchange Date (the “ Automatic Exchange Notice Date ”), which notice must include (w) the Automatic Exchange Date, (x) the section of this Indenture pursuant to which the Automatic Exchange shall occur, (y) the CUSIP number of the Restricted Note from which such Holder’s beneficial interests will be transferred and (z) the CUSIP number of the Unrestricted Note into which such Holder’s beneficial interests will be transferred, and (iii) on or prior to the Automatic Exchange Date, deliver to the Trustee for authentication one or more Unrestricted Notes, duly executed by the Issuer, in an aggregate principal amount equal to the aggregate principal amount of Restricted Notes to be exchanged. Upon receipt by the Trustee of an Officer’s Certificate of the Issuer setting forth the information to be stated in such Automatic Exchange Notice, which Officer’s Certificate must be received by the Trustee, on no less than five (5) calendar days prior to the Automatic Exchange Notice Date, the Trustee shall deliver, in the Issuer’s name and at the Issuer’s expense, the Automatic Exchange Notice to each Holder at such Holder’s address appearing in the register of Holders. Notwithstanding anything to the contrary in this Section 2.3(h), during the fifteen (15) day period prior to the Automatic Exchange Date, no transfers or exchanges other than pursuant to this Section 2.3(h) shall be permitted without the prior written consent of the Issuer. As a condition to any Automatic Exchange, the Issuer shall provide, and the Trustee shall be entitled to rely upon, an Officer’s Certificate and Opinion of Counsel in form reasonably acceptable to the Trustee, each to the effect that the Automatic Exchange shall be effected in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act and that the aggregate principal amount of the particular

 

Appendix-8


Restricted Note is to be transferred to the particular Unrestricted Note by adjustment made on the records of the Trustee, as custodian for the Depositary to reflect the Automatic Exchange. Upon such exchange of beneficial interests pursuant to this Section 2.3(h), the aggregate principal amount of the Global Notes shall be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, to reflect the relevant increase or decrease in the principal amount of such Global Note resulting from the applicable exchange. The Issuer shall also provide written notice to the Holder of Restricted Notes that are Definitive Notes at least (15) calendar days prior to the Automatic Exchange Date offering to exchange all of such Definitive Notes for Unrestricted Notes which shall include information similar to the notice provided to Holders of Global Notes under clause (ii) above and upon request of such, Holder of Definitive Notes shall follow the procedures set forth above for exchanging such Definitive Notes for Definitive Notes that are not Restricted Notes. The Restricted Notes from which beneficial interests are transferred pursuant to an Automatic Exchange shall be canceled following the Automatic Exchange.

Section 2.4 Definitive Notes.

(a) A Global Note deposited with the Depositary or with the Trustee as Custodian pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of Definitive Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 and (i) the Depositary notifies the Issuer that it is unwilling or unable to continue as a Depositary for such Global Note or if at any time the Depositary ceases to be a “clearing agency” registered under the Exchange Act and, in each case, a successor depositary is not appointed by the Issuer within 90 days of such notice or after the Issuer becomes aware of such cessation, or (ii) an Event of Default has occurred and is continuing or (iii) the Issuer, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of certificated Notes under the Indenture.

(b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depositary to the Trustee, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section shall be executed, authenticated and delivered only in Authorized Denominations and registered in such names as the Depositary shall direct. Any certificated Note in the form of a Definitive Note delivered in exchange for an interest in the Global Note shall, except as otherwise provided by Section 2.3(d), bear the Restricted Notes Legend.

(c) Subject to the provisions of Section 2.4(b), the registered Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under the Indenture or the Notes.

(d) In the event of the occurrence of any of the events specified in Section 2.4(a)(i), (ii) or (iii), the Issuer will promptly make available to the Trustee a reasonable supply of Definitive Notes in fully registered form without interest coupons.

 

Appendix-9


Exhibit A

[FORM OF FACE OF NOTE]

[RULE 144A][IAI][GLOBAL] NOTE

[Global Notes Legend]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“ DTC ”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[Restricted Notes Legend]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

(1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “ QIB ”) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER REGULATION D OF THE SECURITIES ACT (AN “ INSTITUTIONAL ACCREDITED INVESTOR ”),

(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144 (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO HOLDINGS OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH


ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN A TRANSACTION EXEMPT FROM THE REQUIREMENTS OF THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND

(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE.

[Definitive Notes Legend]

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

[OID Legend]

THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“ OID ”) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED AT ANY TIME BEGINNING NO LATER THAN 10 DAYS AFTER JANUARY 5, 2011 BY WRITING TO: REALOGY CORPORATION, ONE CAMPUS DRIVE, PARSIPPANY, NJ 07054, ATTENTION: CHIEF FINANCIAL OFFICER.

 

A-2


CUSIP [            ]

ISIN [            ]

[RULE 144A][IAI][GLOBAL] NOTE

[ 11.00% Series A Convertible Senior Subordinated Note Due 2018 ] 1

[ 11.00% Series B Convertible Senior Subordinated Note Due 2018 ] 2

[ 11.00% Series C Convertible Senior Subordinated Note Due 2018 ] 3

 

No.             

      Principal Amount [$              ][, as revised by the Schedule of Exchanges of Interests in Global Security attached hereto] 4

REALOGY CORPORATION

promises to pay to [CEDE & CO.] 1 [Name of Holder] 5 or registered assigns, [the principal sum of [            ]] United States Dollars [, revised by the Schedule of Exchanges of Interests in Global Security attached hereto,] 1 [[            ] United States Dollars] 2 on April 15, 2018.

Interest Payment Dates: April 15 and October 15

Record Dates: April 1 and October 1

Reference is made to the further provisions of this Note set forth on the reverse hereof, including, without limitation, provisions giving the Holder of this Note the right to convert this Note into Common Stock of Domus Holdings Corp. or other property on the terms and subject to the limitations referred to on the reverse hereof and as more fully specified in the Indenture.

 

 

1

Insert in the 11.00% Series A Convertible Senior Subordinated Notes due 2018.

2

Insert in the 11.00% Series B Convertible Senior Subordinated Notes due 2018.

3

Insert in the 11.00% Series C Convertible Senior Subordinated Notes due 2018.

4

Insert in Global Notes.

5

Insert in Definitive Notes.

 

A-3


IN WITNESS HEREOF, the Issuer has caused this instrument to be duly executed as of the date first set forth above.

 

REALOGY CORPORATION

By:

   
  Name:
  Title:

 

A-4


CERTIFICATE OF AUTHENTICATION:

This is one of the Notes referred to in the within-mentioned Indenture:

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

Dated:

   
   

By:

   
  Authorized Signatory

 

A-5


[FORM OF BACK OF NOTE]

[ 11.00% Series A Convertible Senior Subordinated Note Due 2018 ] 6

[ 11.00% Series B Convertible Senior Subordinated Note Due 2018 ] 7

[ 11.00% Series C Convertible Senior Subordinated Note Due 2018 ] 8

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. Realogy Corporation, a Delaware corporation, promises to pay interest on the principal amount of this Note at [10.50% per annum from October 15, 2010 to, but not including, the Issue Date and at a rate of 11.00% per annum thereafter] 9 [11.75% per annum from October 15, 2010 to, but not including, the Issue Date and at a rate of 11.00% per annum thereafter] 10 [12.375% per annum from October 15, 2010 to, but not including, the Issue Date and at a rate of 11.00% per annum thereafter] 11 . Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months and accrues from October 15, 2010, or from the most recent date to which interest has been paid or duly provided for. The Issuer will pay Additional Interest, if any, payable pursuant to the Registration Rights Agreement referred to below. The Issuer will pay interest and Additional Interest, if any, semi-annually in arrears on April 15 and October 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “ Interest Payment Date ”), and the first Interest Payment Date shall be April 15, 2011. Interest on the Notes will accrue from October 15, 2010, or from the most recent date to which interest has been paid or duly provided for. The Issuer will also pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal, if any, from time to time on demand at the rate equal to 2% per annum in excess of 11.00% to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest (without regard to any applicable grace period), if any, from time to time on demand at the rate equal to 2% per annum in excess of 11.00% to the extent lawful. Each payment of interest on the Notes will include interest accrued through the day before the applicable Interest Payment Date (or repurchase, redemption or, in certain circumstances, conversion date, as the case may be). Any payment required to be made with respect to the Notes on any day that is not a Business Day will be made on the next succeeding Business Day and no additional interest will accrue for the period from and after the Interest Payment Date to such next succeeding Business Day.

2. METHOD OF PAYMENT. The Issuer will pay interest on the Notes and Additional Interest, if any, to the Persons who are registered Holders of Notes at the close of business on April 1 or October 1 (whether or not a Business Day), as the case may be, next preceding the Interest

 

 

6

Insert in the 11.00% Series A Convertible Senior Subordinated Notes due 2018.

7

Insert in the 11.00% Series B Convertible Senior Subordinated Notes due 2018.

8

Insert in the 11.00% Series C Convertible Senior Subordinated Notes due 2018.

9

Insert in the 11.00% Series A Convertible Senior Subordinated Notes due 2018.

10

Insert in the 11.00% Series B Convertible Senior Subordinated Notes due 2018.

11

Insert in the 11.00% Series C Convertible Senior Subordinated Notes due 2018.

 

A-6


Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Principal of and premium, if any, on the Notes will be payable at the office or agency of the Issuer maintained for such purpose. The Issuer may pay interest and Additional Interest, if any, by check mailed to the holder’s address as it appears in the Convertible Note register, provided that a Holder with an aggregate principal amount in excess of $1.0 million, shall be paid, at the Holder’s written election, by wire transfer in immediately available funds. Notwithstanding the foregoing, all payments to The Depository Trust Company or its nominee in respect of Global Notes ( “ DTC ”) will be made by wire transfer of immediately available funds to the account of DTC or its nominee. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

3. PAYING AGENT, CONVERSION AGENT AND REGISTRAR. Initially, The Bank of New York Mellon Trust Company, N.A., the trustee under the Indenture (the “ Trustee ”), will act as Paying Agent, Conversion Agent and Registrar. The Issuer may change any Paying Agent, Conversion Agent or Registrar without notice to the Holders. The Issuer or any of its Wholly Owned Subsidiaries may act in any such capacity.

4. INDENTURE. The Issuer issued the Notes under an Indenture, dated as of January 5, 2011 (the “ Indenture ”), among Realogy Corporation, Domus Holdings Corp., the Note Guarantors named therein and the Trustee. This Note is one of a duly authorized issue of Notes of the Issuer designated as its 11.00% Series A Convertible Senior Subordinated Note Due 2018, 11.00% Series B Convertible Senior Subordinated Note Due 2018 or 11.00% Series C Convertible Senior Subordinated Note Due 2018. Unless expressly stated otherwise, the Notes shall be treated as a single class of securities for all purposes under the Indenture. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “TIA”). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION.

(a) Except as described below under clause (b) below, the Notes will not be redeemable at the Issuer’s option.

(b) Upon a Qualified Public Offering and at any time thereafter, the Notes may be redeemed at the option of the Issuer, in whole or in part, upon not less than 30 nor more than 60 days’ prior notice as set forth in Section 3.03 of the Indenture, mailed by first class mail to the registered address of each Holder (or electronically transmitted) or otherwise in accordance with the procedures of DTC, at a redemption price, payable in cash, equal to 90% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest and Additional Interest, if any, to, but excluding, the date fixed for redemption, subject to the rights of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(c) Any redemption pursuant to this paragraph 5 shall be made pursuant to the provisions of Sections 3.01 through 3.07 of the Indenture.

6. MANDATORY REDEMPTION. The Issuer shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

7. NOTICE OF REDEMPTION. Subject to Section 3.03 of the Indenture, notice of redemption will be mailed by first class mail (or electronically transmitted) at least 30 days but not more

 

A-7


than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address or otherwise in accordance with the procedures of DTC. Notes may be redeemed in whole or part but only in Authorized Denominations, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date, interest will cease to accrue on Notes or portions thereof called for redemption, unless the Issuer shall default in the payment of such Notes at the Redemption Price in accordance with the terms of the Indenture. The right to convert such Notes or portions thereof into Common Stock will expire at the close of business on the Business Day immediately preceding the redemption date, unless the Issuer shall default in the payment of such Notes at the Redemption Price in accordance with the terms of the Indenture.

8. OFFERS TO REPURCHASE. Upon the occurrence of a Change of Control, each Holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Issuer to repurchase all or any part of such Holder’s Notes but only in Authorized Denominations, unless all of the Notes held by a Holder are to be repurchased, at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase (subject to the right of the Holders of record on the relevant Record Date to receive interest due of the relevant Interest Payment Date), as provided in, and subject to the terms of, the Indenture. The Change of Control Offer shall be made in accordance with Section 4.08 of the Indenture.

9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in Authorized Denominations. The Notes may be presented for exchange or registration of transfer at the office of the Trustee or the Registrar as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents. No service charge will be made for any registration of transfer or exchange of Notes but the Issuer may require Holders to pay any tax, assessment or other governmental charge payable as a result of a transfer or exchange. Holders will be required to pay any taxes and fees required by law or permitted by the Indenture. The Issuer need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuer need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed.

10. CONVERSION. Subject to the provisions of the Indenture, prior to the close of business on the Business Day preceding Stated Maturity of the Notes, the Holder hereof has the right, at its option, to convert each $1,000 principal amount of the Notes into [975.6098] 12 [926.7841] 13 shares of Common Stock as such shares shall be constituted at the date of conversion and subject to adjustment from time to time as provided in the Indenture, (i) in the case of certificated Notes, upon surrender of this Note, duly endorsed for transfer, accompanied by the funds, if any, required by Section 8.02 of the Indenture, with the original or facsimile of the form entitled “Option of Holder to Elect Conversion” on the reverse thereof duly completed, to the Issuer at the office or agency of the Issuer maintained for that purpose in accordance with the terms of the Indenture, or at the option of such Holder, the Corporate Trust Office of the Trustee, and, unless the shares issuable on conversion are to be issued in the same name as this Note, duly endorsed by, or accompanied by instruments of transfer in form satisfactory to the Issuer duly executed by, the Holder or by his duly authorized attorney and accompanied by transfer or similar taxes, if required pursuant to Section 8.07 of the Indenture; or (ii) in the case of Global Notes, the

 

 

12

Insert for the 11.00% Series A Convertible Senior Subordinated Notes due 2018 and for the 11.00% Series B Convertible Senior Subordinated Notes due 2018.

13

Insert for the 11.00% Series C Convertible Senior Subordinated Notes due 2018.

 

A-8


beneficial holder must comply with the Applicable Procedures to cause its interests in such Global Note to be delivered to the Conversion Agent and pay the funds, if any, required by Section 8.02 of the Indenture and any transfer or similar taxes, if required pursuant to Section 8.07 of the Indenture.

If the Issuer elects, in its sole discretion, to issue and deliver shares of Common Stock upon conversion of any interest in a Global Note in book-entry form through the Depositary, the Issuer shall provide to Holders a notice of such change in the manner set forth in Section 16.02 of the Indenture. Thereafter, to exercise the conversion privilege with respect to any interest in a Global Note, the beneficial holder must complete, or cause to be completed, the appropriate instruction form for conversion pursuant to the Depositary’s book-entry conversion program, deliver, or cause to be delivered, by book-entry delivery its interests in such Global Note to the Conversion Agent, and pay the funds, if any, required by Section 8.02 of the Indenture and any transfer or similar taxes, if required pursuant to Section 8.07 of the Indenture,

Notwithstanding the foregoing, if such Note has been called for redemption, the Note may be converted only until the close of business on the Business Day immediately preceding the redemption date unless the Issuer fails to pay the Redemption Price in accordance with the terms of the Indenture.

No adjustment in respect of interest on any Note converted or dividends on any shares issued upon conversion of such Note will be made upon any conversion except as set forth in the next sentence. If this Note (or portion hereof) is surrendered for conversion during the period from the close of business on any Record Date for the payment of interest to the close of business on the Business Day preceding the following Interest Payment Date and has not been called for redemption by the Issuer on a redemption date that occurs during such period, this Note (or portion hereof being converted) must be accompanied by payment, in immediately available funds or other funds acceptable to the Issuer, of an amount equal to the interest otherwise payable on such Interest Payment Date on the principal amount being converted; provided that no such payment shall be required (1) if the Issuer has specified a redemption date that is after a Record Date and on or prior to the next Interest Payment Date, (2) if the Issuer has specified a repurchase date following a Change of Control that is after a Record Date and on or prior to the next Interest Payment Date or (3) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such Note.

No fractional shares will be issued upon any conversion. Instead, the Issuer will round up and deliver an additional share, as provided in the Indenture, in respect of any fraction of a share which would otherwise be issuable upon the surrender of any Note or Notes for conversion.

A Note in respect of which a Holder is exercising its right to require repurchase upon a Change of Control may be converted only if such Holder withdraws its election to exercise either such right in accordance with the terms of the Indenture.

11. SUBORDINATION.

(a) The Notes and the Note Guarantees are subordinated to Senior Indebtedness of the Issuer and the Note Guarantors on the terms and subject to the conditions set forth in the Indenture. To the extent provided in the Indenture, Senior Indebtedness must be paid before the Notes and Note Guarantees may be paid.

(b) The Holdings Guarantee is subordinated to Holdings Senior Indebtedness on the terms and subject to the conditions set forth in the Indenture. To the extent provided in the Indenture, Holdings Senior Indebtedness must be paid before the Holdings Guarantee may be paid.

 

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(c) The Issuer agrees, and each Holder by accepting a Note agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give effect thereto and appoints the Trustee as attorney-in-fact for such purpose.

12. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.

13. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees or the Notes may be amended or supplemented as provided in the Indenture.

14. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes by notice to the Issuer may declare the principal of, premium, if any, interest, Additional Interest, if any, and any other monetary obligations on all the then outstanding Notes to be due and payable immediately; provided , however , that so long as any Bank Indebtedness remains outstanding, no such acceleration shall be effective until the earlier of: (i) five Business Days after the giving of written notice to the Issuer and the Representative under the Credit Agreement; and (ii) the day on which any Bank Indebtedness is accelerated. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency of the Issuer, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture, the Notes, the Holding Guarantee or the Notes Guarantees except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default (except a Default relating to the payment of principal, premium, if any, Additional Interest, if any, or interest, or a failure to perform conversion obligations under the Indenture) if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture except a continuing Default in payment of the principal of, premium, if any, Additional Interest, if any, or interest on, or a failure to perform conversion obligations in respect of any of the Notes held by a non-consenting Holder (including in connection with a Change of Control Offer). The Issuer, Holdings and each Note Guarantor (to the extent that Holdings or such Note Guarantor is so required under the TIA) are required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required to deliver to the Trustee, within thirty (30) days after the occurrence of a Default, written notice in the form of an Officer’s Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

15. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.

16. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED NOTES. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Transfer Restricted Notes shall have all rights set forth in the Registration Rights Agreement, dated as of January 5, 2011, among Realogy Corporation, Domus Holdings Corp., the Note Guarantors named therein and the other parties named on the signature pages thereof (the “ Registration Rights Agreement ”), including the right to receive Additional Interest (as defined in the Registration Rights Agreement).

 

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17. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE GUARANTEES.

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

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to the Issuer at the following address:

c/o Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

 

A-11


ASSIGNMENT FORM

                            To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to: ______________________________________________________________

(Insert assignee’s legal name)

 

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

 

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint _____________________________________________________________________________

to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.

Date:                         

 

Your Signature:    
  (Sign exactly as your name appears on the face of this Note)

 

Signature Guarantee*:    
 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF TRANSFER RESTRICTED NOTES

This certificate relates to $              principal amount of Notes held in (check applicable space)              book-entry or              definitive form by the undersigned.

The undersigned (check one box below):

 

¨ has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Note held by the Depositary a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above) in accordance with the Indenture; or

 

¨ has requested the Trustee by written order to exchange or register the transfer of a Note or Notes.

In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144 under the Securities Act, the undersigned confirms that such Notes are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

 

(1)

   ¨    to the Issuer; or

(2)

   ¨    to the Registrar for registration in the name of the Holder, without transfer; or

(3)

   ¨    pursuant to an effective registration statement under the Securities Act of 1933; or

(4)

   ¨    inside the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or

(5)

   ¨    to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements; or

(6)

   ¨    pursuant to another available exemption from registration under the Securities Act of 1933.

Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided , however , that if box (5) or (6) is checked, the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuer has

 

A-13


reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.

 

   
Your Signature

 

Signature Guarantee:        
       

 

Date:            
  Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee       Signature of Signature Guarantee

TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

Dated:            
        NOTICE: To be executed by an executive officer

 

A-14


OPTION OF HOLDER TO ELECT CONVERSION

The undersigned elects to have this Note converted pursuant to Article 8 of the Indenture.

If you want to elect to have only part of this Note converted pursuant to Article 8 of the Indenture, state the amount you elect to have converted:

$             

Date:                     

Your Signature:    
  (Sign exactly as your name appears on the face of this Note)

 

Tax Identification No.: __________________

 

Signature Guarantee*:    
 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-15


Fill in the registration of shares of Common Stock if to be issued, and Notes if to be delivered, other than to and in the name of the registered holder:

 

   
(Name)
   
(Street Address)
   
(City, State and Zip Code)
   
Please print name and address
 
Principal amount to be converted (if less than all):

$________________________________________

 

Social Security or Other Taxpayer

Identification Number:

   

 

A-16


OPTION OF HOLDER TO ELECT PURCHASE

The undersigned elects to have this Note purchased by the Issuer pursuant to Section 4.08 of the Indenture.

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.08 of the Indenture, state the amount you elect to have purchased:

$             

Date:             

Your Signature:    
  (Sign exactly as your name appears on the face of this Note)

 

Tax Identification No.: __________________

 

Signature Guarantee*:    
 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-17


SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $              . The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

 

Date of

Exchange

  

Amount of

decrease
in Principal

Amount of this

Global Note

  

Amount of increase
in Principal
Amount of this
Global Note

  

Principal Amount

of
this Global Note
following such
decrease or increase

  

Signature of
authorized officer
of Trustee or
Custodian

 

* This schedule should be included only if the Note is issued in global form.

 

A-18


Exhibit B

FORM OF

TRANSFEREE LETTER OF REPRESENTATION

Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

In care of

The Bank of New York Mellon Trust Company, N.A.

525 William Penn Place, 38th Floor

Pittsburgh, Pennsylvania 15259

Fax No.: (412) 234-7535

Attention: Corporate Trust Administration

Ladies and Gentlemen:

This certificate is delivered to request a transfer of [    ] principal amount of the 11.00% [Series A] 14 [Series B] 15 [Series C] 16 Convertible Senior Subordinated Notes due 2018 (the “ Notes ”) of Realogy Corporation (the “ Issuer ”).

Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows:

Name:             

Address:             

Taxpayer ID Number:             

The undersigned represents and warrants to you that:

1. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “ Securities Act ”)), purchasing for our own account or for the account of such an institutional “accredited investor” at least $250,000 principal amount of the Securities, and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we

 

 

14

Insert for the 11.00% Series A Convertible Senior Subordinated Notes due 2018.

15

Insert for the 11.00% Series B Convertible Senior Subordinated Notes due 2018.

16

Insert for the 11.00% Series C Convertible Senior Subordinated Notes due 2018.


invest in or purchase securities similar to the Notes in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment.

2. We understand that the Notes have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Notes to offer, sell or otherwise transfer such Notes prior to the date that is one year after the later of the date of original issue and the last date on which the Issuer or any affiliate of the Issuer was the owner of such Notes (or any predecessor thereto) (the “ Resale Restriction Termination Date ”) only (a) to the Issuer, (b) pursuant to a registration statement that has been declared effective under the Securities Act, (c) in a transaction complying with the requirements of Rule 144A under the Securities Act (“ Rule 144A ”), to a person or entity we reasonably believe is a qualified institutional buyer under Rule 144A (a “ QIB ”) that is purchasing for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) to an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing for its own account or for the account of such an institutional “accredited investor,” in each case in a minimum principal amount of Notes of $250,000, or (e) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Notes is proposed to be made pursuant to clause (d) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuer and the Trustee, which shall provide, among other things, that the transferee is an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Notes for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Issuer and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Notes pursuant to clause (d) or (e) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Issuer and the Trustee.

 

TRANSFEREE:                               ,
            By:    
 

 

B-2


Exhibit C

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY FUTURE NOTE GUARANTORS

Supplemental Indenture (this “ Supplemental Indenture ”), dated as of              , among              (the “ Guaranteeing Subsidiary ”), a subsidiary of Realogy Corporation, a Delaware corporation (the “ Issuer ”), and The Bank of New York Mellon Trust Company, N.A., as trustee (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, each of the Issuer, Holdings and the Note Guarantors (as defined in the Indenture referred to below) has heretofore executed and delivered to the Trustee an indenture (the “ Indenture ”), dated as of January 5, 2011, providing for the issuance of 11.00% Series A Convertible Senior Subordinated Notes Due 2018, 11.00% Series B Convertible Senior Subordinated Notes Due 2018 and 11.00% Series C Convertible Senior Subordinated Notes Due 2018 (collectively, the “ Notes ”), in an aggregate principal amount not to exceed $2.12 billion;

WHEREAS, the Section 4.05 of the Indenture provides that under certain circumstances the Issuer is required to cause the Guaranteeing Subsidiary to execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Note Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Issuer, the Trustee and the Guaranteeing Subsidiary are authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee . The Guaranteeing Subsidiary hereby agrees to provide a Note Guarantee upon the terms and subject to the conditions of the Indenture and, without limiting the generality of the foregoing, agrees as follows:

(a) Along with Holdings and all Note Guarantors named in the Indenture or any supplemental indenture, to jointly and severally unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, the performance of all obligations of the Issuer under the Indenture and the Notes and that:

(i) the principal of and interest, premium, if any, and Additional Interest, if any, on the Notes shall be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder whether for payment of principal of, premium, if any, or interest and Additional Interest, if any, on the Notes and all other monetary obligations of the Issuer under the Indenture and the Notes shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and


(ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, Holdings, any Note Guarantor and the Guaranteeing Subsidiary shall be jointly and severally obligated to pay the same immediately. This is a guarantee of performance and payment and not a guarantee of collection.

(b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, the Indenture, the Holdings Guarantee or any other Note Guarantee, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor.

(c) The following is hereby waived: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever.

(d) This Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, the Indenture and this Supplemental Indenture, and the Guaranteeing Subsidiary accepts all obligations of a Note Guarantor under the Indenture.

(e) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, Holdings, the Note Guarantors (including the Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer, Holdings or the Note Guarantors, any amount paid either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(f) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(g) As between the Guaranteeing Subsidiary, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guaranteeing Subsidiary for the purpose of this Note Guarantee.

(h) The Guaranteeing Subsidiary shall have the right to seek contribution from Holdings or any non-paying Note Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Note Guarantee.

(i) Pursuant to Section 11.02 of the Indenture, after giving effect to all other contingent and fixed liabilities that are relevant under any applicable Bankruptcy Law or fraudulent conveyance laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of Holdings or any other Note Guarantor in respect of the obligations of Holdings or such other Note Guarantor under Article 11 or Article 12

 

C-2


of the Indenture, this new Note Guarantee shall be limited to the maximum amount permissible such that the obligations of such Guaranteeing Subsidiary under this Note Guarantee will not be voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

(j) This Note Guarantee shall be a continuing guarantee and shall (1) remain in full force and effect until payment in full of all the applicable obligations guaranteed hereby; (2) subject to Section 11.06 of the Indenture, be binding upon the Guaranteeing Subsidiary and its successors; and (3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

(k) This Note Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer, Holdings or any Note Guarantor for liquidation or reorganization, should the Issuer, Holdings or any Note Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s, Holdings’ or any Note Guarantor’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, or Holdings Guarantee or Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(l) In case any provision of this Note Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(m) This Note Guarantee shall be a general unsecured senior subordinated obligation of such Guaranteeing Subsidiary, and shall be subordinated in right of payment to all existing and future Senior Indebtedness of the Guaranteeing Subsidiary, if any, on the terms set forth in Article 13 of the Indenture.

(n) Each payment to be made by the Guaranteeing Subsidiary in respect of this Note Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

(3) Execution and Delivery . The Guaranteeing Subsidiary agrees that the Note Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Note Guarantee on the Notes.

(4) Releases .

The Note Guarantee of the Guaranteeing Subsidiary shall be automatically and unconditionally released and discharged, and no further action by the Guaranteeing Subsidiary, Holdings, the Issuer or the Trustee is required for the release of the Guaranteeing Subsidiary’s Guarantee, upon:

(a) the sale, disposition or other transfer (including through merger or consolidation) of the Capital Stock (including any sale, disposition or other transfer following which the Guaranteeing Subsidiary is no longer a Subsidiary of the Issuer) of the Guaranteeing Subsidiary if such sale, disposition

 

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or other transfer is made in compliance with the Indenture and the Guaranteeing Subsidiary is released from its guarantees, if any, of all Senior Subordinated Pari Passu Indebtedness;

(b) the release or discharge of the Guaranteeing Subsidiary from its guarantee of the New Senior Subordinated Notes that resulted in the obligation to guarantee the Notes, if the Guaranteeing Subsidiary would not then otherwise be required to guarantee the Notes pursuant to the Indenture (for the avoidance of doubt, the only requirement to guarantee the Notes pursuant to the Indenture is as set forth in Section 4.05 thereof); or

(c) Issuer’s obligations under the Indenture being discharged in accordance with the terms of the Indenture.

(5) No Recourse Against Others . No director, officer, employee, manager, incorporator or holder of any Equity Interests of the Guaranteeing Subsidiary or any direct or indirect parent, as such, shall have any liability for any obligations of the Issuer or the Note Guarantors under the Notes, the Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(6) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(7) Counterparts/Originals . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

(8) Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction hereof.

(9) The Trustee . The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary.

(10) Subrogation . The Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by the Guaranteeing Subsidiary pursuant to the provisions of Section 2 hereof and Section 11.01 of the Indenture; provided that, if an Event of Default has occurred and is continuing, the Guaranteeing Subsidiary shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under the Indenture or the Notes shall have been paid in full.

(11) Benefits Acknowledged . The Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. The Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Note Guarantee are knowingly made in contemplation of such benefits.

(12) Successors . All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in Section 2(k) hereof or elsewhere in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

 

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

 

[GUARANTEEING SUBSIDIARY]
By:    
  Name:
  Title:

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:    
  Name:
  Title:

 

C-5

Exhibit 4.73

11.00% Convertible Senior Subordinated Notes due 2018

REGISTRATION RIGHTS AGREEMENT

by and among

Realogy Corporation

Domus Holdings Corp.

the subsidiaries of Realogy Corporation parties hereto

and

J.P. Morgan Securities LLC

Credit Suisse Securities (USA) LLC

Goldman, Sachs & Co.

Dated as of January 5, 2011


REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “ Agreement ”) is made and entered into as of January 5, 2011, by and among Realogy Corporation, a Delaware corporation (the “ Company ”), Domus Holdings Corp., a Delaware corporation and the indirect parent of the Company (“ Holdings ”), the subsidiaries of the Company listed on Schedule A hereto (collectively, together with Holdings, the “ Guarantors ”), J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC. and Goldman, Sachs & Co. (collectively, the “ Dealer Managers ”), each of whom has agreed to act as a dealer manager pursuant to the Dealer Manager Agreement (as defined below) with respect to the Company’s offers to exchange (the “ Exchange Offers ”) its 11.00% Series A Convertible Senior Subordinated Notes due 2018, 11.00% Series B Convertible Senior Subordinated Notes due 2018 and 11.00% Series C Convertible Senior Subordinated Notes due 2018 (such convertible notes collectively, the “ Notes ”) or its 11.50% Senior Notes due 2017, 12.00% Senior Notes due 2017 or 13.375% Senior Subordinated Notes due 2018, in each case issued by the Company and fully and unconditionally guaranteed by the Guarantors (the “ Guarantees ”) for certain of its outstanding securities (the “ Outstanding Securities”) and the Company’s concurrent solicitation of consents to amend the indentures pursuant to which the Outstanding Securities were issued (the “ Solicitations ”). The Notes and the Guarantees thereof are herein collectively referred to as the “ Debt Securities ”.

This Agreement is made pursuant to the Dealer Manager Agreement, dated November 30, 2010 (the “ Dealer Manager Agreement ”), among the Company, the Guarantors and the Dealer Managers for the benefit of the holders from time to time of the Debt Securities and the Class A Common Stock of Holdings issued upon conversion of the Notes. In connection with the Dealer Manager Agreement and the Exchange Offers, the Issuing Companies and the Guarantors have agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Dealer Managers set forth in Section 6(h) of the Dealer Manager Agreement.

The parties hereby agree as follows:

S ECTION  1. Definitions . As used in this Agreement, the following capitalized terms shall have the following meanings:

Additional Interest: Any additional interest payable with respect to the Registrable Notes due to an increase in interest rate pursuant to Section 3 hereof.

Advice: As defined in Section 4 hereof.

Agreement: As defined in the preamble hereto.

Broker-Dealer: Any broker or dealer registered under the Exchange Act.

Business Day: Any day other than a Saturday, Sunday or U.S. federal holiday or a day on which banking institutions or trust companies located in New York, New York are authorized or obligated to be closed.


Class A Common Stock : means shares of Holdings’ Class A common stock, par value $0.01 per share.

Closing Date: The date of this Agreement.

Commission: The Securities and Exchange Commission.

Company: As defined in the preamble hereto.

Dealer Manager Agreement: As defined in the preamble hereto.

Dealer Managers: As defined in the preamble hereto.

Debt Securities : As defined in the preamble hereto.

Effective Time : means the time at which the Commission declares any Shelf Registration Statement effective or at which any Shelf Registration Statement otherwise becomes effective.

Effectiveness Target Date : As defined in Section 2(a) hereof.

Election Holder: has the meaning assigned thereto in Section 4(a)(i) hereof.

Exchange Act: The Securities Exchange Act of 1934, as amended.

Exchange Offers : As defined in the preamble hereto.

FINRA: The Financial Industry Regulatory Authority, Inc.

Free Writing Prospectus: Any free writing prospectus, as such term is defined in Rule 405 under the Securities Act, relating to any portion of the Securities.

Guarantees: As defined in the preamble hereto.

Guarantors: As defined in the preamble hereto.

Holder: means any person who owns, beneficially or otherwise, any Registrable Security.

Holdings: As defined in the preamble hereto.

Indemnified Holder: As defined in Section 6(a) hereof.

Indenture: The Indenture dated as of January 5, 2011, by and among the Company, the Guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee (the “ Trustee ”), pursuant to which the Debt Securities are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof.

Issuing Companies: The Company and Holdings.

 

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Notes: As defined in the preamble hereto.

Notice and Questionnaire: means a Notice of Registration Statement and Selling Securityholder Notice and Questionnaire, which shall be substantially in the form of Appendix A hereto.

Outstanding Securities: As defined in the preamble hereto.

Person: An individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.

Prospectus: The prospectus included in a Shelf Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus.

Registrable Notes: All or any portion of the Notes that are Registrable Securities.

Registrable Securities: All or any portion of the Notes issued under the Indenture and all of the shares of Class A Common Stock issued upon conversion of such Notes until, in the case of any such securities, the earliest of:

(x) the date on which such security has been registered under the Securities Act and disposed of pursuant to an effective registration statement; provided that, if such security is a share of Class A Common Stock issued upon conversion of a Note that has been so registered and disposed of, the date on which the Note that was converted was registered and disposed of;

(y) the date on which such security is distributed to the public pursuant to Rule 144 under the Securities Act or may be sold or transferred by a person who is not an Affiliate of the Company pursuant to Rule 144 under the Securities Act (or any other similar provision then in force) without any volume or manner of sale restrictions thereunder; and

(z) the date on which such securities cease to be outstanding (whether as a result of repurchase and cancellation, conversion or otherwise).

Registration Default: As defined in Section 3 hereof.

Securities Act: The Securities Act of 1933, as amended.

Shelf Registration Statement: As defined in Section 2(a) hereof.

Solicitations: As defined in the preamble hereto.

Suspension Period: has the meaning assigned thereto in Section 2(c) hereof.

Suspension Notice: has the meaning assigned thereto in Section 2(c) hereof.

10-K Filing Date: As defined in Section 2(a) hereof.

 

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Trust Indenture Act: The Trust Indenture Act of 1939, as amended.

Trustee: As defined in the definition of Indenture above.

Underwritten Registration or Underwritten Offering: A registration in which securities of the Company or Holdings are sold to an underwriter for reoffering to the public.

S ECTION 2. Shelf Registration .

(a) The Issuing Companies and the Guarantors shall:

(x) cause to be filed a shelf registration statement on Form S-1 (or such other form under the Securities Act then available to the Issuing Companies) pursuant to Rule 415 under the Securities Act (the “ Shelf Registration Statement ”) as soon as practicable but in any event on or prior to 15 days after the date the Issuing Companies would be obligated to file its Form 10-K for the year ended December 31, 2010 with the Commission if the Issuing Companies were a non-accelerated filer subject to Sections 13 or 15(d) of the Exchange Act (the “ 10-K Filing Date ”), which Shelf Registration Statement shall provide for resales of all Registrable Securities the Holders of which shall have provided the information required pursuant to Section 4(a) hereof (but shall not include any other securities unless approved by a majority of the Holders whose Registrable Securities are to be covered by such Shelf Registration Statement); and

(y) cause such Shelf Registration Statement to be declared effective by the Commission as promptly as possible (unless it becomes effective automatically upon filing), and in any event on or prior to 120 days after the 10-K Filing Date (the “ Effectiveness Target Date ”).

(b) Each of the Issuing Companies and the Guarantors shall keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 4 hereof to the extent necessary to ensure that it is available for resales of Registrable Securities by the Holders of Registrable Securities entitled to the benefit of this Section 2, and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, until the earlier of: (i) the sale of all outstanding Registrable Securities registered under the Shelf Registration Statement; and (ii) the point when all the Registrable Securities may be sold freely under Rule 144 under the Securities Act (or any other similar provision then in force) without volume limitations or public information requirements. During the period during which the Issuing Companies and the Guarantors are required to maintain an effective Shelf Registration Statement pursuant to this Agreement, the Issuing Companies and the Guarantors will, prior to the expiration of that Shelf Registration Statement, file, cause to be declared effective (unless it becomes effective automatically upon filing) within a period that avoids any interruption in the ability of Holders of Securities covered by the expiring Shelf Registration Statement to make registered dispositions, a new registration statement relating to the Securities, which shall be deemed the “Shelf Registration Statement” for purposes of this Agreement.

 

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(c) The Issuing Companies may suspend the use of the Prospectus and the Shelf Registration Statement for a period not to exceed an aggregate of 90 days in any 12-month period (each, a “ Suspension Period ”), if the Boards of Directors of either the Company or Holdings shall have determined in good faith that because of valid business reasons (not including avoidance of the Issuing Companies’ obligations hereunder), including the acquisition or divestiture of assets, pending corporate developments, public filings with the Commission, including post-effective amendments or new Shelf Registration Statements necessary to comply with its obligations hereunder, and similar events, it is in the best interests of the Company or Holdings to suspend such use, and prior to suspending such use the Company and Holdings shall provide the Election Holders written notice of such suspension (a “ Suspension Notice ”). No Holder shall effect any sales of the Registrable Shares pursuant to such Registration Statement (or such filings) at any time after it has received a Suspension Notice from the Company or Holdings until such date as such Holder receives Advice that the Shelf Registration Statement is again available for resales. If so directed by the Company or Holdings, each Holder will deliver to the Company (at the expense of the Company) all copies other than permanent file copies then in such Holder’s possession of the Prospectus covering the Registrable Securities at the time of receipt of the Suspension Notice. The Company and Holdings shall provide copies of the Prospectus that is a part of the Shelf Registration Statement to each Election Holder, issue a press release when the Shelf Registration Statement has been filed with the Commission and when such Shelf Registration Statement has become effective and the Issuing Companies and the Guarantors shall take such other actions as may be required to permit public resales of the Registrable Securities.

(d) The Company or Holdings may, upon written notice to all Holders of Registrable Securities, postpone having the Shelf Registration Statement declared effective, for a reasonable period not to exceed 90 days if any of the Company or Holdings possesses material non-public information the disclosure of which would have a material adverse effect on the Company or Holdings and their subsidiaries taken as a whole.

S ECTION  3. Additional Interest . If (i) a Shelf Registration Statement has not been filed within 15 days after the 10-K Filing Date, (ii) on or prior to the Effectiveness Target Date, the initial Shelf Registration Statement has not been declared effective by the Commission, or (iii) any Shelf Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective or the Issuing Companies otherwise prevent holders of Registrable Securities from making sales under such Shelf Registration Statement, for more than 90 days, whether or not consecutive, during any 12-month period (each such event referred to in clauses (i) through (iii), a “ Registration Default ”), the Company and the Guarantors hereby agree that the interest rate borne by the Notes shall be increased by 0.25% per annum during the 90-day period immediately following the occurrence of any Registration Default and shall increase by 0.25% per annum at the end of each subsequent 90-day period, but in no event shall such increase exceed 1.00% per annum. Following the earliest of (x) the cure of all Registration Defaults relating to any particular Registrable Securities, (y) the sale of all outstanding Registrable Securities registered under the Shelf Registration Statement and (z) the point when all the Registrable Securities may be sold freely under Rule 144 under the Securities Act (or any other similar provision then in force) without volume limitations or public information requirements, the interest rate borne by the relevant Registrable Notes will be reduced to the original interest rate borne by such Registrable Notes and the accrual of Additional Interest will cease with respect to such Registrable Notes; provided, however, that if, after any such reduction

 

6


in interest rate, a different Registration Default occurs, the interest rate borne by the relevant Registrable Notes shall again be increased pursuant to the foregoing provisions. All accrued Additional Interest will be paid by the Company and the Guarantors on each interest payment date to the Holder in the same manner as interest is paid under the Indenture.

Notwithstanding the foregoing, (i) the amount of Additional Interest payable shall not increase because more than one Registration Default has occurred and is pending and (ii) a Holder of Registrable Notes that is not entitled to the benefits of the Shelf Registration Statement (because, e.g. , such Holder has not elected to include information or has not timely delivered such information to the Company pursuant to Section 4(a) hereof) shall not be entitled to Additional Interest with respect to a Registration Default that pertains to the Shelf Registration Statement.

All obligations of the Company and the Guarantors set forth in the first paragraph of this Section 3 that are outstanding with respect to any Registrable Security at the time such security ceases to be a Registrable Security shall survive until such time as all such obligations with respect to such security shall have been satisfied in full.

S ECTION  4. Registration Procedures.

In connection with the Shelf Registration Statements, the following provisions shall apply:

(a) (i) Not less than 30 days prior to the intended Effective Time of the initial Shelf Registration Statement, the Company shall distribute the Notice and Questionnaire to the Holders of Registrable Securities. The Issuing Companies shall take action to name as a selling securityholder in the initial Shelf Registration Statement at the time of its effectiveness each Holder that properly completes, executes and delivers a Notice and Questionnaire to the Company at the address set forth in the Notice and Questionnaire (an “ Election Holder ”). The Issuing Companies shall not be required to take any action to name any Holder as a selling securityholder in the initial Shelf Registration Statement at the time of its effectiveness or to enable any Holder to use the Prospectus forming a part thereof for resales of Registrable Securities unless such Holder has returned a properly completed and signed Notice and Questionnaire to the Company on or before the fifth Business Day before the intended Effective Time. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.

(ii) Except as otherwise provided in this Section 4(a)(ii), the Issuing Companies shall as promptly as is practicable after the date a completed and signed Notice and Questionnaire is delivered to the Company, and in any event within 30 days after such date, prepare and file with the Commission (x) a supplement to the Prospectus relating to the Shelf Registration Statement or, if required by applicable law, a post-effective amendment to the Shelf Registration Statement or a new Shelf Registration Statement in order to permit such Holder delivering such Notice and Questionnaire to be named as a selling securityholder in the Shelf Registration Statement and to deliver the Prospectus to purchasers of such Holder’s Registrable Securities in accordance with applicable law; provided , that if a Notice and Questionnaire is delivered to the Company during a

 

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Suspension Period, or the Issuing Companies initiate a Suspension Period within 30 days after receiving the Notice and Questionnaire, the Issuing Companies shall be obligated to take the actions set forth in this clause (ii) within 30 days after the end of such Suspension Period; provided , further , the Issuing Companies shall not be obligated to file more than one supplement to the Prospectus per 30-day period in order to name as a selling securityholder any Holder that has provided the Company with a completed Notice and Questionnaire after the fifth Business Day before the Effective Time of the initial Shelf Registration Statement. If the Issuing Companies file a post-effective amendment or a new Shelf Registration Statement, the Issuing Companies shall use reasonable efforts to cause the post-effective amendment or new Shelf Registration Statement to become effective under the Securities Act as promptly as practicable, but in any event by the 90th day after the date the Issuing Companies are required to file the post-effective amendment or new Shelf Registration Statement. However, if a post-effective amendment or a new Shelf Registration Statement is required in order to permit resales by Holders seeking to include Registrable Securities in a Shelf Registration Statement after the Effective Time of the initial Shelf Registration Statement, the Issuing Companies will not be required to file more than one post-effective amendment or new Shelf Registration Statement for such purpose in any 90-day period.

(b) General Provisions. In connection with any Shelf Registration Statement and any Prospectus required by this Agreement to permit the resale of Registrable Securities and any Free Writing Prospectus (including, without limitation, any Shelf Registration Statement and the related Prospectus required to permit resales of Securities by Broker-Dealers and any Free Writing Prospectus related thereto), each of the Issuing Companies and the Guarantors shall:

(i) use its commercially reasonable efforts to keep such Shelf Registration Statement continuously effective during the period required by this Agreement and provide all requisite financial statements (including, if required by the Securities Act or any regulation thereunder, financial statements of the Guarantors for the period specified in Section 2 hereof, as applicable); upon the occurrence of any event that would cause any such Shelf Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Registrable Securities during the period required by this Agreement, the Issuing Companies shall file promptly an appropriate amendment to such Shelf Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B) use its commercially reasonable efforts to cause such amendment to be declared effective (unless automatically declared effective) and such Shelf Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter;

(ii) prepare and file with the Commission such amendments and post-effective amendments to the Shelf Registration Statement as may be necessary to keep the Shelf Registration Statement effective for the applicable period set forth in Section 2 hereof, as applicable, or such shorter period as will terminate when all Registrable Securities covered by such Shelf Registration Statement have been sold; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424, 430A and 430B under the Securities Act in a timely manner; and

 

8


comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Shelf Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Shelf Registration Statement or supplement to the Prospectus;

(iii) advise the underwriter(s), if any, and selling Holders promptly and, if requested by such Persons, to confirm such advice in writing, (A) when the Prospectus, any Prospectus supplement, any post-effective amendment or any Free Writing Prospectus has been filed, and, with respect to any Shelf Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Shelf Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration Statement under the Securities Act, of the suspension by any state securities commission of the qualification of the Registrable Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, of the issuance by the Commission of a notification of objection to the use of the form on which the Shelf Registration Statement has been filed, or of the happening of any event that causes either of the Issuing Companies to become an “ineligible issuer,” as defined in Rule 405 under the Securities Act and (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Shelf Registration Statement, the Prospectus, any amendment or supplement thereto or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Shelf Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Shelf Registration Statement or a notification of objection to the use of the form on which the Shelf Registration Statement has been filed or if any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Registrable Securities under state securities or blue sky laws, each of the Issuing Companies and the Guarantors shall use its commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest practicable time;

(iv) (A) furnish without charge to each selling Holder named in any Shelf Registration Statement that has requested such copies, if any, and each of the underwriter(s), if any, before filing with the Commission, copies of any Shelf Registration Statement or any Prospectus included therein or any amendments or supplements to any such Shelf Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Shelf Registration Statement), which documents will be subject to the review and comment of such requesting Holders and underwriter(s) in connection with such sale, if any, for a period of at least five Business Days, and the Issuing Companies will not file any such Shelf Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference) to which the underwriter(s), if any, shall reasonably object in writing within five Business Days after the receipt thereof (such objection to be deemed timely made upon confirmation of telecopy transmission within such period). The objection of a

 

9


underwriter, if any, shall be deemed to be reasonable if such Shelf Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission;

(v) promptly prior to the filing of any document that is to be incorporated by reference into a Shelf Registration Statement or Prospectus, provide copies of such document to each selling Holder named in any Shelf Registration Statement that has requested such documents, if any, and to the underwriter(s), if any, make the Issuing Companies’ and the Guarantors’ representatives available for discussion of such document and other customary due diligence matters, subject to customary confidentiality agreements, and include such information in such document prior to the filing thereof as such selling Holders or underwriter(s), if any, reasonably may request;

(vi) make available, subject to customary confidentiality agreements, at reasonable times for inspection by the managing underwriter(s), if any, participating in any disposition pursuant to such Shelf Registration Statement and any attorney or accountant retained by any of the underwriter(s), all financial and other records, pertinent corporate documents and properties of each of the Issuing Companies and the Guarantors, and cause the Issuing Companies’ and the Guarantors’ officers, directors and employees to supply all information, in each case as shall be reasonably necessary to enable any such Holder, underwriter, attorney or accountant to exercise any applicable responsibilities in connection with such Shelf Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness and to participate in meetings with investors to the extent reasonably requested by the managing underwriter(s), if any;

(vii) if requested by any selling Holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the “Plan of Distribution” of the Registrable Securities, information with respect to the principal amount of Regitrable Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

(viii) cause the Registrable Notes covered by the Shelf Registration Statement to be rated with the appropriate rating agencies, if so requested by the Holders of a majority in aggregate principal amount of Registrable Securities covered thereby or the underwriter(s), if any;

(ix) if requested, furnish to each selling Holder and each of the underwriter(s), if any, without charge, at least one copy of the Shelf Registration Statement, as first filed with the Commission, and of each amendment thereto, including financial statements and

 

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schedules, all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference);

(x) deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; each of the Issuing Companies and the Guarantors hereby consents to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Registrable Securities covered by the Prospectus or any amendment or supplement thereto;

(xi) enter into such agreements (including an underwriting agreement), and make such representations and warranties, and take all such other commercially reasonable actions in connection therewith in order to expedite or facilitate the disposition of the Registrable Securities pursuant to any Shelf Registration Statement contemplated by this Agreement, all to such extent as may be reasonably requested by any Holder of Registrable Securities or underwriter in connection with any sale or resale pursuant to any Shelf Registration Statement contemplated by this Agreement; and whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, each of the Issuing Companies and the Guarantors shall:

(A) furnish to each selling Holder and each underwriter, if any, in such substance and scope as they may reasonably request and as are customarily made by issuers to underwriters in primary underwritten offerings, upon the date of the effectiveness of the Shelf Registration Statement:

(1) a certificate, dated the date of effectiveness of the Shelf Registration Statement, as the case may be, signed by (y) in the case of the Issuing Companies, the President or any Vice President and a principal financial or accounting officer and (z) in the case of the Guarantors, the President or any Vice President, in each case, confirming, as of the date thereof, the matters set forth in Section 6(e) of the Dealer Manager Agreement and such other matters as such parties may reasonably request;

(2) if requested by a majority of selling Holders, an opinion, dated the date of effectiveness of the Shelf Registration Statement, as the case may be, of (i) counsel for the Issuing Companies and the Guarantors, covering the matters set forth in the opinion delivered pursuant to Section 6(c) of the Dealer Manager Agreement (with such changes as are necessary and appropriate to address the fact that the Registrable Securities are being sold for cash in a registered public offering) and (ii) the General Counsel of the Issuing Companies and the Guarantors, covering matters set forth in the opinion delivered pursuant to Section 6(c) of the Dealer Manager Agreement (with such changes as are necessary and appropriate to address the fact that the Registrable Securities are being sold for cash in a registered public offering) and such other matters customarily covered in opinions requested in similar offerings, and in each

 

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case, including a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Issuing Companies and the Guarantors, representatives of the independent public accountants for the Issuing Companies and the Guarantors, representatives of the underwriter(s), if any, and counsel to the underwriter(s), if any, in connection with the preparation of such Shelf Registration Statement and the related Prospectus and have considered the matters required to be stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing, no facts came to such counsel’s attention that caused such counsel to believe that the applicable Shelf Registration Statement, (A) at the date of the opinion and at the time such Shelf Registration Statement or any post-effective amendment thereto became effective and (B) at the applicable time identified by such Holders or managing underwriters, in the case of (A) and (B) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus contained in such Shelf Registration Statement as of its date contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein not misleading. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial or statistical data included in any Shelf Registration Statement contemplated by this Agreement or the related Prospectus, and such opinions may be further subject to assumptions and qualifications substantially similar to those set forth in the opinions delivered pursuant to Sections 6(c) of the Dealer Manager Agreement (with such changes as are necessary and appropriate to address the fact that the Registrable Securities are being sold for cash in a registered public offering); and

(3) in connection with an Underwritten Registration or Underwritten Offering, a customary comfort letter, dated the date of effectiveness of the Shelf Registration Statement, from the Issuing Companies’ independent accountants, in the customary form and covering matters of the type customarily requested to be covered in comfort letters by underwriters in connection with primary underwritten offerings, and covering or affirming the matters set forth in the comfort letter delivered pursuant to Section 6(d) of the Dealer Manager Agreement, without exception;

(B) set forth in full or incorporate by reference in the underwriting agreement, if any, the indemnification provisions and procedures of Section 6 hereof with respect to all parties to be indemnified pursuant to said Section; and

 

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(C) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with Section 4(b)(xi)(A) hereof and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Issuing Companies or any of the Guarantors pursuant to this Section 4(b)(xi), if any.

If at any time the representations and warranties of the Issuing Companies and the Guarantors contemplated in Section 4(b)(xi)(A)(1) hereof cease to be true and correct, the Issuing Companies or the Guarantors shall so advise the Dealer Managers and the underwriter(s), if any, and each selling Holder promptly and, if requested by such Persons, shall confirm such advice in writing;

(xii) prior to any public offering of Registrable Securities, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Registrable Securities under the state securities or blue sky laws of such jurisdictions as the selling Holders or underwriter(s), if any, may request, keep each such registration or qualification or exemption effective during the period such Registration Statement is required to be kept effective as required by the provisions of Section 4 hereof and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the Shelf Registration Statement; provided, however , that none of the Issuing Companies or the Guarantors shall be required to register or qualify as a foreign corporation where it is not then so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Shelf Registration Statement, in any jurisdiction where it is not then so subject;

(xiii) subject to the terms of the Indenture, cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as the Holders or the underwriter(s), if any, may request at least two Business Days prior to any sale of Registrable Securities made by such Holders or underwriter(s);

(xiv) use its commercially reasonable efforts to cause the Registrable Securities covered by the Shelf Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Registrable Securities, subject to the proviso contained in Section 4(b)(xii) hereof;

(xv) if any fact or event contemplated by Section 4(b)(iii)(D) hereof shall exist or have occurred, prepare a supplement or post-effective amendment to the Shelf Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Registrable Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading;

 

13


(xvi) provide a CUSIP number for all Debt Securities not later than the effective date of the Shelf Registration Statement covering such Debt Securities and provide the Trustee under the Indenture with printed certificates for such Debt Securities which are in a form eligible for deposit with The Depository Trust Company and take all other action necessary to ensure that all such Debt Securities are eligible for deposit with The Depository Trust Company;

(xvii) cooperate and assist in any filings required to be made with FINRA and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter”) that is required to be retained in accordance with the rules and regulations of FINRA;

(xviii) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders, as soon as practicable, a consolidated earning statement meeting the requirements of Rule 158 (which need not be audited) for the twelve-month period (A) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a firm commitment or best efforts Underwritten Offering or (B) if not sold to underwriters in such an offering, beginning with the first month of the Issuing Companies’ first fiscal quarter commencing after the effective date of the Shelf Registration Statement;

(xix) cause the Indenture to be qualified under the Trust Indenture Act not later than the effective date of the first Shelf Registration Statement required by this Agreement, and, in connection therewith, cooperate with the Trustee and the Holders of Debt Securities to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and to execute, and to use its commercially reasonable efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; and

(xx) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act.

Each Holder agrees by acquisition of a Registerable Security that, upon receipt of any notice from the Company or Holdings of the existence of any fact of the kind described in Section 4(b)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Registerable Securities pursuant to the applicable Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 4(b)(xv) hereof, or until it is advised in writing (the “ Advice ”) by the Company or Holdings that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Company or Holdings, each Holder will deliver to the Company or Holdings (at the Company’s or Holdings expense, as applicable) all copies, other than permanent file copies then in such Holder’s possession, of the

 

14


Prospectus covering such Registrable Securities that was current at the time of receipt of such notice.

(c) If the Issuing Companies have an effective Shelf Registration Statement on Form S-1 under the Securities Act and are required to file a new Shelf Registration Statement on Form S-1 or become eligible to use Form S-3 or such other short-form registration statement form under the Securities Act, the Issuing Companies and the Guarantors may, upon 30 days prior written notice to all Holders, register any Registrable Securities registered but not yet distributed under the effective Shelf Registration Statement on such new Shelf Registration Statement on Form S-1 or on such a short-form Shelf Registration Statement and, once such new Shelf Registration Statement on Form S-1 or such short-form Shelf Registration Statement is declared effective, de-register such securities under the previous Registration Statement or transfer the filing fees from the previous Registration Statement (such transfer pursuant to Rule 429, if applicable) unless any Holder registered under the initial Shelf Registration Statement notifies the Company within 10 days of receipt of the Company notice that such a registration under a new Registration Statement and de-registration of the initial Shelf Registration Statement would interfere with its distribution of Registrable Securities already in progress.

S ECTION  5. Registration Expenses.

(a) All expenses incident to the Issuing Companies’ and the Guarantors’ performance of or compliance with this Agreement will be borne by the Issuing Companies and the Guarantors, jointly and severally, regardless of whether a Shelf Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees and expenses (including filings made by any of the Dealer Managers or any Holder with FINRA (and, if applicable, the fees and expenses of any “qualified independent underwriter”, and one counsel to such person, that may be required by the rules and regulations of FINRA)); (ii) all fees and expenses of compliance with federal securities and state securities or blue sky laws (including the reasonable fees and disbursements of one counsel to the Holders of Registrable Securities); (iii) all expenses of printing (including printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Issuing Companies, the Guarantors and, subject to Section 5(b) hereof, one counsel to the Holders of Registrable Securities; (v) all application and filing fees in connection with listing the Registrable Securities on a securities exchange or automated quotation system pursuant to the requirements thereof, if required to so list; and (vi) all fees and disbursements of independent certified public accountants of the Issuing Companies and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance).

Each of the Issuing Companies and the Guarantors will, in any event, bear its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Issuing Companies or the Guarantors.

 

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(b) In connection with any Shelf Registration Statement required by this Agreement, the Issuing Companies and the Guarantors, jointly and severally, will reimburse the Holders of Registrable Securities being registered pursuant to the Shelf Registration Statement, for the reasonable fees and disbursements of not more than one counsel, who shall be Simpson Thacher & Bartlett LLP or such other counsel as may be chosen by the Holders of a majority in principal amount of the Registrable Securities for whose benefit such Registration Statement is being prepared.

S ECTION  6. Indemnification.

(a) The Issuing Companies and the Guarantors, jointly and severally, agree to indemnify and hold harmless (i) each Holder and (ii) each Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any Holder (any of the Persons referred to in this clause (ii) being hereinafter referred to as a “ controlling person ”) and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or any controlling person (any Person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an “ Indemnified Holder ”), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including, without limitation, and as incurred, reimbursement of all reasonable costs of investigating, preparing, pursuing, settling, compromising, paying or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of counsel to any Indemnified Holder), joint or several, directly or indirectly caused by, related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus (or any amendment or supplement thereto) or Free Writing Prospectus, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses are caused by an untrue statement or omission or alleged untrue statement or omission that is made in reliance upon and in conformity with information relating to any of the Holders furnished in writing to the Company by any of the Holders expressly for use therein. This indemnity agreement shall be in addition to any liability that the Issuing Companies or any of the Guarantors may otherwise have.

In case any action or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought or asserted against any of the Indemnified Holders with respect to which indemnity may be sought against the Issuing Companies or the Guarantors, such Indemnified Holder shall promptly notify the Issuing Companies and the Guarantors in writing; provided, however, that the failure to give such notice shall not relieve any of the Issuing Companies or the Guarantors of its obligations pursuant to this Agreement. Such Indemnified Holder shall have the right to employ its own counsel in any such action and the fees and expenses of such counsel shall be paid, as incurred, by the Issuing Companies and the Guarantors (regardless of whether it is ultimately determined that an Indemnified Holder is not entitled to indemnification hereunder). The Issuing Companies and the Guarantors shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for such Indemnified Holders, which firm

 

16


shall be designated by the Holders. The Issuing Companies and the Guarantors shall be liable for any settlement of any such action or proceeding effected with the Issuing Companies’ and the Guarantors’ prior written consent, which consent shall not be withheld unreasonably, and each of the Issuing Companies and the Guarantors agrees to indemnify and hold harmless any Indemnified Holder from and against any loss, claim, damage, liability or expense by reason of any settlement of any action effected with the written consent of the Issuing Companies and the Guarantors. The Issuing Companies and the Guarantors shall not, without the prior written consent of each Indemnified Holder, settle or compromise or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any Indemnified Holder is a party thereto), unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Holder from all liability arising out of such action, claim, litigation or proceeding, and does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Holder.

(b) Each Holder of Registrable Securities agrees, severally and not jointly, to indemnify and hold harmless the Issuing Companies, the Guarantors and their respective directors, officers of the Issuing Companies and the Guarantors who sign a Shelf Registration Statement, and any Person controlling (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any of the Issuing Companies or any of the Guarantors, and the respective officers, directors, partners, employees, representatives and agents of each such Person, to the same extent as the foregoing indemnity from the Issuing Companies and the Guarantors to each of the Indemnified Holders, but only with respect to claims and actions based on information relating to such Holder furnished in writing by such Holder expressly for use in any Registration Statement. In case any action or proceeding shall be brought against the Issuing Companies, the Guarantors or their respective directors or officers or any such controlling person in respect of which indemnity may be sought against a Holder of Registrable Securities, such Holder shall have the rights and duties given the Issuing Companies and the Guarantors, and the Issuing Companies, the Guarantors, their respective directors and officers and such controlling person shall have the rights and duties given to each Holder by the preceding paragraph.

(c) If the indemnification provided for in this Section 6 is unavailable to an indemnified party under Section 6(a) or (b) hereof (other than by reason of exceptions provided in those Sections) in respect of any losses, claims, damages, liabilities, judgments, actions or expenses referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits received by the Issuing Companies and the Guarantors, on the one hand, and the Holders, on the other hand, from the Exchange Offers and Solicitations and the transactions contemplated thereby (which in the case of the Issuing Companies and the Guarantors shall be deemed to be equal to the principal amount of the Notes), the amount of Additional Interest which did not become payable as a result of the filing of the Shelf Registration Statement resulting in such losses, claims, damages, liabilities, judgments, actions or expenses, and such Shelf Registration Statement, or if such allocation is not permitted by applicable law, the relative fault of the Issuing Companies and the Guarantors, on the one hand, and the Holders, on the other hand, in connection with the statements or omissions which

 

17


resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Issuing Companies and the Guarantors, on the one hand, and of the Indemnified Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by any of the Issuing Companies or any of the Guarantors, on the one hand, or the Indemnified Holders, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 6(a) hereof, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.

The Issuing Companies, the Guarantors and each Holder of Registrable Securities agree that it would not be just and equitable if contribution pursuant to this Section 6(c) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6, none of the Holders (and its related Indemnified Holders) shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total price received with respect to the sale of the Debt Securities exceeds the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 6(c) are several in proportion to the respective principal amount of Debt Securities held by each of the Holders hereunder and not joint.

S ECTION  7. Rule 144A. Each of the Issuing Companies and the Guarantors hereby agrees with each Holder, for so long as any Registrable Securities remain outstanding, to make available to any Holder or beneficial owner of Registrable Securities in connection with any sale thereof and any prospective purchaser of such Registrable Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Registrable Securities pursuant to Rule 144A under the Securities Act.

S ECTION  8. Participation in Underwritten Registrations. No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) receives the Company’s prior written consent, (b) agrees to sell such Holder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (c) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements.

 

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S ECTION  9. Selection of Underwriters. In any Underwritten Offering of Registrable Securities, the investment banker(s) and managing underwriter(s) that will administer such offering will be selected by the Holders of a majority in aggregate principal amount of the Registrable Securities included in such offering; provided, however , that such investment banker(s) and managing underwriter(s) must be reasonably satisfactory to the Company.

S ECTION  10. Miscellaneous.

(a) Remedies. Each of the Issuing Companies and the Guarantors hereby agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate. Other than the Issuing Companies’ and the Guarantors’ obligation to pay Additional Interest, the Issuing Companies and the Guarantors will not have any liabilities for damages with respect to a Registration Default on any Registrable Security.

(b) No Inconsistent Agreements. Each of the Issuing Companies and the Guarantors will not on or after the date of this Agreement enter into any agreement with respect to its securities that conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with the rights granted to any of the holders of the Issuing Companies’ or any of the Guarantors’ securities under any agreement entered into or in effect on the date hereof.

(c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless the Company has (i) in the case of Section 3 hereof and this Section 10(c)(i), obtained the written consent of Holders of all outstanding Registrable Securities affected thereby and (ii) in the case of all other provisions hereof, obtained the written consent of Holders of a majority of the outstanding principal amount of Registrable Securities (including any Registrable Securities held by the Company or its Affiliates).

(d) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery:

(i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and

(ii) if to the Issuing Companies or the Guarantors:

Realogy Corporation

One Campus Drive

Parsippany, NJ 07054

Attention: General Counsel

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

 

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Telecopier No: (917) 777-3497

Attention: Stacy Kanter, Esq.

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture.

(e) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without limitation, and without the need for an express assignment, subsequent Holders of Registrable Securities; provided, however , that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Registrable Securities from such Holder.

(f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(i) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

(j) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Issuing Companies and the Guarantors with respect to the Registrable Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

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

 

REALOGY CORPORATION
By   /s/ Anthony E. Hull
  Name:   Anthony E. Hull
  Title:   EVP, CFO & Treasurer

 

DOMUS HOLDINGS CORP.
By   /s/ Anthony E. Hull
  Name:   Anthony E. Hull
  Title:   EVP, CFO & Treasurer

 

 

[Signature Page to Registrations Rights Agreement – Convertible Notes]


CARTUS CORPORATION

CDRE TM LLC

NRT INSURANCE AGENCY, INC.

REALOGY OPERATIONS LLC

REALOGY SERVICES GROUP LLC

REALOGY SERVICES VENTURE PARTNER LLC

SOTHEBY’S INTERNATIONAL REALTY LICENSEE LLC

WREM, INC.

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Chief Financial Officer

 

[Signature Page to Registrations Rights Agreement – Convertible Notes]


ASSOCIATES REALTY, INC.

CARTUS ASSET RECOVERY CORPORATION

CARTUS PARTNER CORPORATION

FEDSTATE STRATEGIC CONSULTING,

INCORPORATED

J.W. RIKER – NORTHERN R.I., INC.

LAKECREST TITLE, LLC

NRT PHILADELPHIA LLC

REFERRAL NETWORK LLC

THE CORCORAN GROUP EASTSIDE, INC.

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Executive Vice President & Treasurer

 

[Signature Page to Registrations Rights Agreement – Convertible Notes]


AMERICAN TITLE COMPANY OF HOUSTON

ATCOH HOLDING COMPANY

BURNET TITLE LLC

BURNET TITLE HOLDING LLC

BURROW ESCROW SERVICES, INC.

CORNERSTONE TITLE COMPANY

EQUITY TITLE COMPANY

EQUITY TITLE MESSENGER SERVICE HOLDING LLC

FIRST CALIFORNIA ESCROW CORPORATION

FRANCHISE SETTLEMENT SERVICES LLC

GUARDIAN HOLDING COMPANY

GUARDIAN TITLE AGENCY, LLC

GUARDIAN TITLE COMPANY

GULF SOUTH SETTLEMENT SERVICES, LLC

KEYSTONE CLOSING SERVICES LLC

MARKET STREET SETTLEMENT GROUP LLC

MID-ATLANTIC SETTLEMENT SERVICES LLC

NATIONAL COORDINATION ALLIANCE LLC

NRT SETTLEMENT SERVICES OF MISSOURI LLC

NRT SETTLEMENT SERVICES OF TEXAS LLC

PROCESSING SOLUTIONS LLC

SECURED LAND TRANSFERS LLC

ST. JOE TITLE SERVICES LLC

TAW HOLDING INC.

TEXAS AMERICAN TITLE COMPANY

TITLE RESOURCE GROUP AFFILIATES HOLDINGS LLC

TITLE RESOURCE GROUP HOLDINGS LLC

TITLE RESOURCE GROUP LLC

TITLE RESOURCE GROUP SERVICES LLC

TITLE RESOURCES INCORPORATED

TRG SERVICES, ESCROW, INC.

TRG SETTLEMENT SERVICES, LLP

WAYDAN TITLE, INC.

WEST COAST ESCROW COMPANY

By:   /s/ Thomas N. Rispoli
Name:   Thomas N. Rispoli
Title:   Chief Financial Officer

 

 

[Signature Page to Registrations Rights Agreement – Convertible Notes]


BETTER HOMES AND GARDENS REAL ESTATE LLC

BETTER HOMES AND GARDENS REAL ESTATE

LICENSEE LLC

CENTURY 21 REAL ESTATE LLC

CGRN, INC.

COLDWELL BANKER LLC

COLDWELL BANKER REAL ESTATE LLC

ERA FRANCHISE SYSTEMS LLC

GLOBAL CLIENT SOLUTIONS LLC

ONCOR INTERNATIONAL LLC

REALOGY FRANCHISE GROUP LLC

REALOGY GLOBAL SERVICES LLC

REALOGY LICENSING LLC

SOTHEBY’S INTERNATIONAL REALTY AFFILIATES LLC

WORLD REAL ESTATE MARKETING LLC

By:   /s/ Andrew G. Napurano
Name:   Andrew G. Napurano
Title:   Chief Financial Officer

 

[Signature Page to Registrations Rights Agreement – Convertible Notes]


FSA MEMBERSHIP SERVICES, LLC
By:   /s/ Marilyn J. Wasser
Name:   Marilyn J. Wasser
Title:   Executive Vice President

 

[Signature Page to Registrations Rights Agreement – Convertible Notes]


ALPHA REFERRAL NETWORK LLC

ASSOCIATED CLIENT REFERRAL LLC

ASSOCIATES REALTY NETWORK

BURGDORFF LLC

BURGDORFF REFERRAL ASSOCIATES LLC

BURNET REALTY LLC

CAREER DEVELOPMENT CENTER, LLC

COLDWELL BANKER COMMERCIAL PACIFIC PROPERTIES LLC

COLDWELL BANKER PACIFIC PROPERTIES LLC

COLDWELL BANKER REAL ESTATE SERVICES LLC

COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY

COLDWELL BANKER RESIDENTIAL BROKERAGE LLC

COLDWELL BANKER RESIDENTIAL REAL ESTATE LLC

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK, INC.

COLORADO COMMERCIAL, LLC

HOME REFERRAL NETWORK LLC

JACK GAUGHEN LLC

NRT ARIZONA LLC

NRT ARIZONA COMMERCIAL LLC

NRT ARIZONA REFERRAL LLC

NRT COLORADO LLC

NRT COLUMBUS LLC

NRT COMMERCIAL LLC

NRT COMMERCIAL UTAH LLC

NRT DEVELOPMENT ADVISORS LLC

NRT DEVONSHIRE LLC

NRT HAWAII REFERRAL, LLC

NRT LLC

NRT MID-ATLANTIC LLC

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

 

[Signature Page to Registrations Rights Agreement – Convertible Notes]


NRT MISSOURI LLC

NRT MISSOURI REFERRAL NETWORK LLC

NRT NEW ENGLAND LLC

NRT NEW YORK LLC

NRT NORTHFORK LLC

NRT PITTSBURGH LLC

NRT REFERRAL NETWORK LLC

NRT RELOCATION LLC

NRT REOEXPERTS LLC

NRT SUNSHINE INC.

NRT TEXAS LLC

NRT UTAH LLC

REAL ESTATE REFERRAL LLC

REAL ESTATE REFERRALS LLC

REAL ESTATE SERVICES LLC

REFERRAL ASSOCIATES OF NEW ENGLAND LLC

REFERRAL NETWORK, LLC

REFERRAL NETWORK PLUS, INC.

SOTHEBY’S INTERNATIONAL REALTY, INC.

SOTHEBY’S INTERNATIONAL REALTY REFERRAL COMPANY, LLC

THE SUNSHINE GROUP (FLORIDA) LTD. CORP.

THE SUNSHINE GROUP, LTD.

VALLEY OF CALIFORNIA, INC.

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

 

[Signature Page to Registrations Rights Agreement – Convertible Notes]


The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written:

 

J.P. MORGAN SECURITIES LLC
By:   /s/ David A. Dwyer
  Name:   David A. Dwyer
  Title:   Executive Director
CREDIT SUISSE SECURITIES (USA) LLC
By:   /s/ Malcolm Price
  Name:   Malcolm Price
  Title:   Managing Director
GOLDMAN, SACHS & CO.
By:   /s/ Goldman Sachs & Co.
  (Goldman, Sachs & Co.)

 

[Signature Page to Registrations Rights Agreement – Convertible Notes]


SCHEDULE A

Guarantors

Associates Realty, Inc.

Associates Realty Network

Burrow Escrow Services, Inc.

Coldwell Banker Real Estate LLC

Coldwell Banker Residential Brokerage Company

Coldwell Banker Residential Real Estate LLC

Coldwell Banker Residential Referral Network

Cornerstone Title Company

Equity Title Company

Guardian Title Company

National Coordination Alliance LLC

Realogy Operations LLC

Referral Network Plus, Inc.

Valley of California, Inc.

West Coast Escrow Company

Colorado Commercial, LLC

Guardian Title Agency, LLC

NRT Colorado LLC

Referral Network, LLC

Associated Client Referral LLC

Better Homes and Gardens Real Estate Licensee LLC

Better Homes and Gardens Real Estate LLC

Burgdorff LLC

Burgdorff Referral Associates LLC

Career Development Center, LLC

Cartus Asset Recovery Corporation

Cartus Corporation

Cartus Partner Corporation

CDRE TM LLC

Century 21 Real Estate LLC

CGRN, Inc.

Coldwell Banker LLC

Coldwell Banker Real Estate Services LLC

Coldwell Banker Residential Brokerage LLC

Equity Title Messenger Service Holding LLC

ERA Franchise Systems LLC

FedState Strategic Consulting, Incorporated

First California Escrow Corporation

Franchise Settlement Services LLC

FSA Membership Services, LLC

Global Client Solutions LLC


Guardian Holding Company

Gulf South Settlement Services, LLC

Jack Gaughen LLC

Keystone Closing Services LLC

NRT Arizona Commercial LLC

NRT Arizona LLC

NRT Arizona Referral LLC

NRT Columbus LLC

NRT Commercial LLC

NRT Commercial Utah LLC

NRT Development Advisors LLC

NRT Devonshire LLC

NRT Hawaii Referral, LLC

NRT LLC

NRT Mid-Atlantic LLC

NRT Missouri LLC

NRT Missouri Referral Network LLC

NRT New England LLC

NRT New York LLC

NRT Northfork LLC

NRT Philadelphia LLC

NRT Pittsburgh LLC

NRT Referral Network LLC

NRT Relocation LLC

NRT REOExperts LLC

NRT Settlement Services of Missouri LLC

NRT Settlement Services of Texas LLC

NRT Sunshine Inc.

NRT Utah LLC

ONCOR International LLC

Real Estate Referral LLC

Real Estate Referrals LLC

Real Estate Services LLC

Realogy Franchise Group LLC

Realogy Global Services LLC

Realogy Licensing LLC

Realogy Services Group LLC

Realogy Services Venture Partner LLC

Secured Land Transfers LLC

Sotheby’s International Realty Affiliates LLC

Sotheby’s International Realty Licensee LLC

Sotheby’s International Realty Referral Company, LLC

Title Resource Group Affiliates Holdings LLC

Title Resource Group Holdings LLC

Title Resource Group LLC

Title Resource Group Services LLC


Title Resources Incorporated

TRG Services, Escrow, Inc.

World Real Estate Marketing LLC

WREM, Inc.

Referral Network LLC

St. Joe Title Services LLC

The Sunshine Group (Florida) Ltd. Corp.

Coldwell Banker Commercial Pacific Properties LLC

Coldwell Banker Pacific Properties LLC

NRT Insurance Agency, Inc.

Referral Associates of New England LLC

Mid-Atlantic Settlement Services LLC

Sotheby’s International Realty, Inc.

Burnet Realty LLC

Burnet Title LLC

Burnet Title Holding LLC

Home Referral Network LLC

Market Street Settlement Group LLC

The Corcoran Group Eastside, Inc.

The Sunshine Group, Ltd.

Coldwell Banker Residential Referral Network, Inc.

TRG Settlement Services, LLP

J. W. Riker – Northern R.I., Inc.

Lakecrest Title, LLC

Alpha Referral Network LLC

American Title Company of Houston

ATCOH Holding Company

NRT Texas LLC

Processing Solutions LLC

TAW Holding Inc.

Texas American Title Company

Waydan Title, Inc.


APPENDIX A

REALOGY CORPORATION

FORM OF NOTICE OF REGISTRATION STATEMENT AND

SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

Notice

Each of Realogy Corporation (the “ Company ”) and Domus Holdings Corp., a Delaware corporation and the indirect parent of the Company ( “Holdings” ) has filed, or intends shortly to file, with the Securities and Exchange Commission (the “ Commission ”), a registration statement on Form S-1 or such other Form as may be available (the “ Shelf Registration Statement ”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “ Securities Act ”), of the Company’s 11.00% Series A Convertible Senior Subordinated Notes due 2018 (CUSIP Nos. 75605E BK5, U7534P AM3 and 75605E BL3), 11.00% Series B Convertible Senior Subordinated Notes due 2018 (CUSIP Nos. 75605E BN9, U7534P AN1 and 75605E BP4) and 11.00% Series C Convertible Senior Subordinated Notes due 2018 (CUSIP Nos. 75605E BR0, U7534P AP6 and 75605E BS8) (collectively, the “ Notes ”), the related guarantees (the “ Guarantees ” and, together with the Notes, the “ Debt Securities” ) of Domus Holdings Corp. (“ Holdings ”) and the other guarantors (collectively, the “ Guarantors ”) and Class A common stock, par value $0.01 per share, of Holdings issuable upon conversion thereof (the “ Class A Common Stock ” and together with the Debt Securities, the “ Registrable Securities ”) in accordance with the terms of the Registration Rights Agreement, dated as of January 5, 2011 (the “ Registration Rights Agreement ”), between the Company, Holdings, the other Guarantors and the Dealer Managers parties thereto. A copy of the Registration Rights Agreement is available from the Company. All capitalized terms not otherwise defined herein have the meanings ascribed thereto in the Registration Rights Agreement.

To sell or otherwise dispose of any Registrable Securities pursuant to the Shelf Registration Statement, a beneficial owner of Registrable Securities generally will be required to be named as a Selling Securityholder (as defined below) in the related Prospectus, deliver a Prospectus to purchasers of Registrable Securities, be subject to certain civil liability provisions of the Securities Act and be bound by those provisions of the Registration Rights Agreement applicable to such beneficial owner (including certain indemnification rights and obligations, as described below). To be included in the Shelf Registration Statement, this Notice and Questionnaire must be properly completed, executed and delivered to the Company at the address set forth herein for receipt PRIOR TO OR ON the 20th calendar day from the receipt hereof (the “ Notice and Questionnaire Deadline ”). Beneficial Owners that do not complete this Notice and Questionnaire and deliver it to the Company prior to the Notice and Questionnaire Deadline as provided below will not be named as Selling Securityholders in the Shelf Registration Statement at the time it is declared effective and, therefore, will not be permitted to sell any Registrable Securities pursuant to the Shelf Registration Statement until we prepare and file a prospectus supplement or, if required, a post-effective

 

A-1


amendment to the Shelf Registration Statement or an additional Shelf Registration Statement.

Certain legal consequences arise from being named as a Selling Securityholder in the Shelf Registration Statement and the related Prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a Selling Securityholder in the Shelf Registration Statement and the related Prospectus.

 

A-2


ELECTION

The undersigned holder (the “ Selling Securityholder ”) of Registrable Securities hereby elects to include in the Prospectus forming a part of the Shelf Registration Statement the Registrable Securities beneficially owned by it and listed below in Item III (unless otherwise specified under Item III). The undersigned, by signing and returning this Notice and Questionnaire, understands that it will be bound with respect to such Registrable Securities by the terms and conditions of this Notice and Questionnaire and the Registration Rights Agreement.

Pursuant to the Registration Rights Agreement, the Selling Securityholder has agreed to indemnify and hold harmless the Issuing Companies, the Guarantors and each person, if any, who controls any of such parties within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each of their respective directors, officers, employees, representatives and agents, from and against certain losses arising in connection with statements concerning the Selling Securityholder made in the Shelf Registration Statement or the related Prospectus, or any amendment or supplement thereto or any state securities or “Blue Sky” application in reliance upon the information provided in this Notice and Questionnaire.

The Selling Securityholder hereby provides the following information to the Company and Holdings and represents and warrants that such information is accurate and complete:

QUESTIONNAIRE

 

I. A. Full Legal Name of Selling Securityholder:

      

 

B. Full legal name of registered holder (if not the same as (A) above) through which Registrable Securities listed in (C) below are held:

      

 

C. Full legal name of DTC participant (if applicable and if not the same as (B) above) through which Registrable Securities listed in Item III are held:

     

 

 

II. Address for notices to Selling Securityholders:
     

 

     

 

 

A-3


Telephone:                                         

Fax:                                         

Contact Person:                                         

 

III. Beneficial ownership of Registrable Securities:

A. Type of Registrable Securities beneficially owned, and principal amount of Notes or number of shares of Class A Common Stock, as the case may be, beneficially owned:

11.00% Series A Convertible Senior Subordinated

Notes due 2018 (CUSIP Nos. 75605E BK5, U7534P AM3 or 75605E BL3): $                                         

11.00% Series B Convertible Senior Subordinated

Notes due 2018 (CUSIP Nos. 75605E BN9, U7534P AN1 or 75605E BP4): $                                         

11.00% Series C Convertible Senior Subordinated

Notes due 2018 (CUSIP Nos. 75605E BR0, U7534P AP6 or 75605E BS8): $                                         

Class A Common Stock:                                          Shares

 

IV. Beneficial ownership of the Issuing Companies’ securities owned by the Selling Securityholder:

EXCEPT AS SET FORTH BELOW IN THIS ITEM IV, THE UNDERSIGNED IS NOT THE BENEFICIAL OR REGISTERED OWNER OF ANY SECURITIES OF THE COMPANY OR HOLDINGS OTHER THAN THE REGISTRABLE SECURITIES LISTED ABOVE IN ITEM III (“ Other Securities ”).

A. Type and amount of Other Securities beneficially owned by the Selling Securityholder:

      

 

B. CUSIP No(s). of such Other Securities beneficially owned:

      

 

 

V. Relationship with the Company

 

A-4


Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with the Company (or their predecessors or affiliates) during the past three years.

State any exception here:

      

 

 

VI. Plan of Distribution:

Except as set forth below, the undersigned (including its donees or pledgees) intends to distribute the Registrable Securities listed above in Item III pursuant to the Shelf Registration Statement only as follows (if at all). Such Registrable Securities may be sold from time to time directly by the undersigned or, alternatively, through underwriters, broker-dealers or agents. If the Registrable Securities are sold through underwriters or broker-dealers, the Selling Securityholder will be responsible for underwriting discounts or commissions or agent’s commissions. Such Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices. Such sales may be effected in transactions (which may involve crosses or block transactions):

1. on any national securities exchange or quotation service on which the Registrable Securities may be listed or quoted at the time of sale;

2. in the over-the-counter market;

3. in transactions otherwise than on such exchanges or services or in the over-the-counter market; or

4. through the writing of options.

In connection with sales of the Registrable Securities or otherwise, the undersigned may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Registrable Securities and deliver Registrable Securities to close out such short positions, or loan

 

A-5


or pledge Registrable Securities to broker-dealers that in turn may sell such securities. State any exceptions here:

      

 

      

 

Note: In no event will such method(s) of distribution take the form of an underwritten offering of the Registrable Securities without the prior agreement of the Issuing Companies.

By signing below, the Selling Securityholder acknowledges that it understands its obligation to comply, and agrees it will comply, with the prospectus delivery requirements and other provisions of the Securities Act and the Exchange Act and the respective rules and regulations promulgated thereunder, particularly Regulation M thereunder (or any successor rules or regulations), in connection with any offering of Registrable Securities pursuant to the Shelf Registration Statement.

If the Selling Securityholder transfers all or any portion of the Registrable Securities listed in Item III above after the date on which such information is provided to the Company, the Selling Securityholder agrees to notify the transferee(s) at the time of the transfer of its rights and obligations under this Notice and Questionnaire and the Registration Rights Agreement.

By signing below, the Selling Securityholder consents to the disclosure of the information contained herein in its answers to Items I through VI above and the inclusion of such information in the Shelf Registration Statement, the related Prospectus and any state securities or “Blue Sky” applications. The Selling Securityholder understands that such information will be relied upon by the Issuing Companies in connection with the preparation or amendment of the Shelf Registration Statement, the related Prospectus and any state securities or “Blue Sky” applications.

In accordance with the Selling Securityholder’s obligation under the Registration Rights Agreement to provide such information as may be required by law for inclusion in the Shelf Registration Statement or the related Prospectus, the Selling Securityholder agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Shelf Registration Statement remains effective. All notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing at the address set forth below.

Once this Notice and Questionnaire is executed by the Selling Securityholders and received by the Company, the terms of this Notice and Questionnaire and the representations and warranties contained herein shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives and assigns of the Issuing Companies and the Selling Securityholder with respect to the Registrable Securities beneficially owned by such Selling Securityholder and listed in Item III above. This Notice and Questionnaire shall be governed by, and construed in accordance with, the laws of the State of New York.

 

A-6


IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its authorized agent.

Dated:

 

Beneficial Owner
By:    
  Name:  
  Title:  

Please return the properly completed and executed Notice and Questionnaire for receipt PRIOR TO OR ON THE 20TH CALENDAR DAY FROM RECEIPT HEREOF to Realogy Corporation at:

Realogy Corporation

One Campus Drive

Parsippany, NJ 07054

Attention: Secretary

 

A-7

Exhibit 4.74

 

 

 

INDENTURE

Dated as of February 3, 2011

Among

REALOGY CORPORATION,

DOMUS HOLDINGS CORP.,

DOMUS INTERMEDIATE HOLDINGS CORP.,

THE NOTE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO,

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Trustee

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Collateral Agent

$700,000,000 7.875% SENIOR SECURED NOTES DUE 2019

 

 

 


TABLE OF CONTENTS

 

     Page  

ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE

     7   

Definitions

     7   

Other Definitions

     53   

[Reserved]

     55   

Rules of Construction

     55   

Acts of Holders

     56   

ARTICLE 2 THE NOTES

     57   

Form and Dating; Terms

     57   

Execution and Authentication

     58   

Registrar and Paying Agent

     58   

Paying Agent to Hold Money in Trust

     59   

Holder Lists

     59   

Transfer and Exchange

     59   

Replacement Notes

     61   

Outstanding Notes

     61   

Treasury Notes

     61   

Temporary Notes

     62   

Cancellation

     62   

Defaulted Interest

     62   

CUSIP Numbers

     63   

Calculation of Principal Amount of Notes

     63   

ARTICLE 3 REDEMPTION

     63   

Notices to Trustee

     63   

Selection of Notes to Be Redeemed or Purchased

     63   

Notice of Redemption

     64   

Effect of Notice of Redemption

     65   

Deposit of Redemption or Purchase Price

     65   

Notes Redeemed or Purchased in Part

     66   

Optional Redemption

     66   

Mandatory Redemption

     67   

Offers to Repurchase by Application of Excess Proceeds

     67   

 

-i-


     Page  

ARTICLE 4 COVENANTS

     69   

Payment of Notes

     69   

Maintenance of Office or Agency

     70   

Reports and Other Information

     70   

Compliance Certificate

     72   

Taxes

     72   

Stay, Extension and Usury Laws

     72   

Limitation on Restricted Payments

     72   

Dividend and Other Payment Restrictions Affecting Subsidiaries

     79   

Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock

     81   

Asset Sales

     89   

Transactions with Affiliates

     92   

Liens

     95   

Corporate Existence

     96   

Offer to Repurchase Upon Change of Control

     96   

Future Note Guarantors

     98   

Limitation on activities of Intermediate Holdings

     99   

Suspension of Certain Covenants

     99   

ARTICLE 5 SUCCESSORS

     101   

Merger, Amalgamation Consolidation or Sale of All or Substantially All Assets

     101   

Successor Entity Substituted

     105   

ARTICLE 6 DEFAULTS AND REMEDIES

     105   

Events of Default

     105   

Acceleration

     108   

Other Remedies

     109   

Waiver of Past Defaults

     109   

Control by Majority

     109   

Limitation on Suits

     110   

Rights of Holders of Notes to Receive Payment

     110   

Collection Suit by Trustee

     110   

Restoration of Rights and Remedies

     110   

Rights and Remedies Cumulative

     111   

Delay or Omission Not Waiver

     111   

 

-ii-


     Page  

Trustee May File Proofs of Claim

     111   

Priorities

     112   

Undertaking for Costs

     112   

ARTICLE 7 TRUSTEE AND COLLATERAL AGENT

     112   

Duties of Trustee and the Collateral Agent

     112   

Rights of Trustee and the Collateral Agent

     114   

Individual Rights of Trustee and Collateral Agent

     115   

Disclaimer

     116   

Notice of Defaults

     116   

[Reserved]

     116   

Compensation and Indemnity

     116   

Replacement of Trustee or Collateral Agent

     117   

Successor by Merger, etc.

     118   

Eligibility; Disqualification

     118   

ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE

     119   

Option to Effect Legal Defeasance or Covenant Defeasance

     119   

Legal Defeasance and Discharge

     119   

Covenant Defeasance

     120   

Conditions to Legal or Covenant Defeasance

     120   

Deposited Money and Government Obligations to Be Held in Trust; Other Miscellaneous Provisions

     122   

Repayment to the Issuer

     122   

Reinstatement

     123   

ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER

     123   

Without Consent of Holders of Notes

     123   

With Consent of Holders of Notes

     127   

[Reserved]

     129   

Revocation and Effect of Consents

     129   

Notation on or Exchange of Notes

     129   

Trustee and Collateral Agent to Sign Amendments, etc.

     129   

ARTICLE 10 INTERMEDIATE HOLDINGS GUARANTEE AND NOTE GUARANTEES

     130   

Intermediate Holdings Guarantee and Note Guarantee

     130   

Limitation on Liability

     133   

Execution and Delivery

     133   

Subrogation

     134   

 

-iii-


     Page  

Benefits Acknowledged

     134   

Release

     134   

Securitization Acknowledgement

     136   

ARTICLE 11 HOLDINGS GUARANTEE

     137   

Holdings Guarantee

     137   

Limitation on Holdings Liability

     139   

Execution and Delivery

     140   

Subrogation

     140   

Benefits Acknowledged

     140   

Release of Holdings Guarantee

     141   

ARTICLE 12 SUBORDINATION OF HOLDINGS GUARANTEE

     141   

Agreement To Subordinate

     141   

Liquidation, Dissolution, Bankruptcy

     141   

Default on Holdings Senior Indebtedness

     142   

Demand for Payment

     143   

When Distribution Must Be Paid Over

     143   

Subrogation

     144   

Relative Rights

     144   

Subordination May Not Be Impaired by Holdings

     144   

Rights of Trustee and Paying Agent

     144   

Distribution or Notice to Holdings Representative

     145   

Article 12 Not To Prevent Events of Default or Limit Right To Demand Payment

     145   

Trust Moneys Not Subordinated

     145   

Trustee Entitled To Rely

     145   

Trustee To Effectuate Subordination

     146   

Trustee Not Fiduciary for Holders of Holdings Senior Indebtedness

     146   

Reliance by Holders of Holdings Senior Indebtedness on Subordination Provisions

     146   

ARTICLE 13 SATISFACTION AND DISCHARGE

     147   

Satisfaction and Discharge

     147   

ARTICLE 14 COLLATERAL AND SECURITY

     148   

Collateral

     148   

Maintenance of Collateral

     149   

Impairment of Collateral

     149   

 

-iv-


     Page  

Further Assurances

     149   

After-Acquired Property

     149   

Real Estate Mortgages and Filings

     150   

Release of Liens on the Collateral

     151   

Authorization of Actions to be Taken by the Trustee or the Collateral Agent Under the Collateral Documents and the Intercreditor Agreement

     153   

Information Regarding Collateral

     154   

Collateral Documents and Intercreditor Agreements

     155   

No Liability for Clean-up of Hazardous Materials

     155   

ARTICLE 15 MISCELLANEOUS

     156   

Notices

     156   

Certificate and Opinion as to Conditions Precedent

     157   

Statements Required in Certificate or Opinion

     158   

Rules by Trustee and Agents

     158   

No Personal Liability of Directors, Officers, Employees and Stockholders

     158   

Governing Law

     158   

Waiver of Jury Trial

     159   

Force Majeure

     159   

No Adverse Interpretation of Other Agreements

     159   

Successors

     159   

Severability

     159   

Counterpart Originals

     159   

Table of Contents, Headings, etc.

     159   

[Reserved]

     160   

Designated Senior Indebtedness

     160   

Appendix A Provisions Relating to Initial Notes and Additional Notes

 

Exhibit A

  

Form of Initial Note

Exhibit B

  

Form of Transferee Letter of Representation

Exhibit C

  

Form of Supplemental Indenture to Be Delivered by Future Note Guarantors

 

-v-


INDENTURE, dated as of February 3, 2011, among Realogy Corporation, a Delaware corporation (the “ Issuer ”), Domus Holdings Corp., a Delaware corporation and the indirect parent of the Issuer (“ Holdings ”), Domus Intermediate Holdings Corp., a Delaware corporation and the direct parent of the Issuer (“ Intermediate Holdings ”), the Note Guarantors (as defined herein) listed on the signature pages hereto, The Bank of New York Mellon Trust Company, N.A., as Trustee, and The Bank of New York Mellon Trust Company, N.A., as Collateral Agent.

W I T N E S S E T H

WHEREAS, the Issuer, Holdings, Intermediate Holdings and the Note Guarantors have executed the Purchase Agreement dated January 27, 2011, among the Issuer, Holdings, Intermediate Holdings, the Note Guarantors and the Initial Purchasers (as defined herein), relating to the initial sale and issuance of the Initial Notes (as defined below);

WHEREAS, the Issuer has duly authorized the creation of and issue of $700,000,000 aggregate principal amount of 7.875% Senior Secured Notes due 2019 (the “ Initial Notes ”); and

WHEREAS, the Issuer, Holdings, Intermediate Holdings and each of the Note Guarantors has duly authorized the execution and delivery of this Indenture.

NOW, THEREFORE, the Issuer, Holdings, Intermediate Holdings, the Note Guarantors, the Trustee and the Collateral Agent agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Notes.

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01 Definitions .

Acquired Indebtedness ” means, with respect to any specified Person:

(1) Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging, consolidating or amalgamating with or into or becoming a Restricted Subsidiary of such specified Person, and

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

Additional Notes ” means additional Notes (other than the Initial Notes) issued from time to time under this Indenture in accordance with Sections 2.01 and 4.09 hereof.

Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified


Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

Agent ” means any Registrar and Paying Agent.

Apple Ridge Documents ” means the Transfer and Servicing Agreement, dated as of April 25, 2000, as amended, by and among Apple Ridge Services Corporation, Cartus Corporation, Cartus Financial Corporation, Apple Ridge Funding LLC and The Bank of New York Mellon (formerly known as The Bank of New York) (the “ Transfer and Servicing Agreement ”), the Receivables Purchase Agreement, dated as of April 25, 2000, as amended, by and between Cartus Financial Corporation and Apple Ridge Services Corporation (the “ Receivables Purchase Agreement ”), the Purchase Agreement, dated as of April 25, 2000, as amended, by and between Cartus Corporation and Cartus Financial Corporation (the “ Purchase Agreement ”), the Amended and Restated Note Purchase Agreement, dated as of April 10, 2007, as amended and restated as of July 6, 2007, by and among Apple Ridge Funding LLC, Cartus Corporation, Credit Agricole Corporate and Investment Bank, New York Branch (formerly known as Calyon New York Branch) and the Conduit Purchasers, Committed Purchasers and Managing Agents from time to time parties thereto, the Master Indenture, April 25, 2000, as amended, by and between Apple Ridge Funding LLC and The Bank of New York Mellon, the Amended and Restated Series 2007-1 Indenture Supplement, dated as of April 10, 2007, as amended and restated as of July 6, 2007, by and between Apple Ridge Funding LLC and The Bank of New York Mellon, the Performance Guaranty, dated as of May 12, 2006, as amended by the Fifth Omnibus Amendment dated as of April 10, 2007, by Realogy Corporation in favor of Apple Ridge Funding, LLC and Cartus Financial Corporation, and each other agreement or other document contemplated by or entered into in connection with and/or in replacement of the foregoing, each as amended, restated, refinanced, modified or supplemented on or prior to the Issue Date.

Applicable Insurance Regulatory Authority ” means, when used with respect to any Insurance Subsidiary, the insurance department or similar administrative authority or agency located in (x) the state or other jurisdiction in which such Insurance Subsidiary is domiciled or (y) to the extent asserting regulatory jurisdiction over such Insurance Subsidiary, the insurance department, authority or agency in each state or other jurisdiction in which such Insurance Subsidiary is licensed, and shall include any Federal insurance regulatory department, authority or agency that may be created in the future and that asserts regulatory jurisdiction over such Insurance Subsidiary.

Applicable Premium ” means, with respect to any Note on any applicable redemption date, the greater of:

(1) 1% of the then outstanding principal amount of the Note; and

(2) the excess of:

 

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(a) the present value at such redemption date of (i) the redemption price of the Note, at February 15, 2015 (such redemption price being set forth in Section 3.07) plus (ii) all required interest payments due on the Note through February 15, 2015 (in each case excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over

(b) the then outstanding principal amount of the Note.

Arbitrage Programs ” means Indebtedness and Investments relating to operational escrow accounts of NRT or Title Resource Group or any of their Restricted Subsidiaries.

Asset Sale ” means:

(1) the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of a Sale/Leaseback Transaction) of the Issuer or any Restricted Subsidiary (each referred to in this definition as a “disposition”) or

(2) the issuance or sale of Equity Interests (other than directors’ qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any Restricted Subsidiary (other than to the Issuer or another Restricted Subsidiary and other than the issuance of Preferred Stock of a Non-Guarantor Subsidiary issued in compliance with Section 4.09) (whether in a single transaction or a series of related transactions),

in each case other than:

(a) a disposition of Cash Equivalents or Investment Grade Securities or damaged, obsolete or worn out property or equipment in the ordinary course of business;

(b) the disposition of all or substantially all of the assets of the Issuer in a manner permitted pursuant to the provisions described under Section 5.01 hereof or any disposition that constitutes a Change of Control;

(c) any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 4.07;

(d) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary, which assets or Equity Interests so disposed or issued have an aggregate Fair Market Value of less than $25.0 million in any one transaction or series of related transactions;

(e) any disposition of property or assets, or the issuance of securities, by (i) a Restricted Subsidiary to the Issuer, (ii) the Issuer or a Restricted Subsidiary to a Note Guarantor or (iii) a Non-Guarantor Subsidiary to another Non-Guarantor Subsidiary;

 

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(f) any exchange of assets (including a combination of assets and Cash Equivalents) for assets related to a Similar Business of comparable or greater market value or usefulness to the business of the Issuer and the Restricted Subsidiaries as a whole, as determined in good faith by the senior management or the Board of Directors of the Issuer;

(g) foreclosure on assets of the Issuer or any of the Restricted Subsidiaries;

(h) any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(i) the lease, assignment or sublease of any real or personal property in the ordinary course of business;

(j) any sale of inventory or other assets in the ordinary course of business;

(k) grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property or franchise rights;

(l) in the ordinary course of business, any swap of assets, or any lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing arrangements) of comparable or greater value or usefulness to the business of the Issuer and the Restricted Subsidiaries taken as a whole, as determined in good faith by senior management or the Board of Directors of the Issuer; provided, that any cash or Cash Equivalents received must be applied in accordance with Section 4.10;

(m) any financing transaction with respect to property built or acquired by the Issuer or any Restricted Subsidiary after the Issue Date, including any Sale/Leaseback Transaction or asset securitization permitted by this Indenture;

(n) any surrender or waiver of contract rights or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;

(o) a sale or other transfer of Securitization Assets or interests therein pursuant to a Permitted Securitization Financing;

(p) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and not as part of a Permitted Securitization Financing;

(q) dispositions in connection with Permitted Liens or Liens to secure the Notes in accordance with the terms of this Indenture;

 

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(r) sales or other dispositions of Equity Interests in Existing Joint Ventures; and

(s) any disposition of Investments in connection with the Arbitrage Programs.

Bank Indebtedness ” means any and all amounts payable under or in respect of the Credit Agreement and the other Credit Agreement Documents as amended, restated, supplemented, waived, replaced, restructured, repaid, refunded, refinanced or otherwise modified from time to time (including after termination of the Credit Agreement), including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Issuer whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof.

Bankruptcy Law ” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

beneficial ownership ” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as such term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire, whether such right is currently exercisable or is exercisable only after the passage of time.

Board of Directors ” means, as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.

Business Day ” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or the city in which the Trustee’s designated corporate trust office is located.

Capital Stock ” means:

(1) in the case of a corporation or a company, corporate stock or shares;

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

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Capitalized Lease Obligation ” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

Cash Equivalents ” means:

(1) U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business;

(2) securities issued or directly and fully guaranteed or insured by the U.S. government or any country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;

(3) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250.0 million and whose long-term debt is rated “A” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);

(4) repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5) commercial paper issued by a corporation (other than an Affiliate of the Issuer) rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency if both of the two named rating agencies cease publishing ratings of investments) and in each case maturing within one year after the date of acquisition;

(6) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency if both of the two named rating agencies cease publishing ratings of investments) in each case with maturities not exceeding two years from the date of acquisition;

(7) Indebtedness issued by Persons (other than the Permitted Holders or any of their Affiliates) with a rating of “A” or higher from S&P or “A-2” or higher from Moody’s (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;

 

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(8) investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above; and

(9) instruments equivalent to those referred to in clauses (1) through (8) above denominated in euros or any other foreign currency comparable in credit quality and tenor to those referred to above and commonly used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business conducted by any Subsidiary organized in such jurisdiction.

Cendant ” means Cendant Corporation, a Delaware corporation (now known as Avis Budget Group, Inc.).

Cendant Contingent Assets ” has the meaning assigned to “Cendant Contingent Asset” in the Separation and Distribution Agreement and shall also include any tax benefits and attributes allocated or inuring to the Issuer and its Subsidiaries under the Cendant Tax Sharing Agreement.

Cendant Contingent Liabilities ” has the meaning assigned to “Assumed Cendant Contingent Liabilities” in the Separation and Distribution Agreement and shall also include any liabilities that are related or attributable to or arising in connection with Taxes or Tax Returns (as each term is defined in the Cendant Tax Sharing Agreement).

Cendant Spin-Off ” means the distribution of all of the capital stock of the Issuer by Cendant to its stockholders and the transactions related thereto as described in that certain Information Statement of the Issuer dated July 13, 2006, as filed with the SEC.

Cendant Tax Sharing Agreement ” means the Tax Sharing Agreement, dated as of July 28, 2006, by and among Cendant, the Issuer, Wyndham Worldwide Corporation and Travelport Inc., as amended on or prior to the date of the Offering Memorandum.

Change of Control ” means the occurrence of any of the following:

(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of the Issuer and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders;

(2) the Issuer becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of the Issuer or any direct or indirect parent of the

 

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Issuer. Notwithstanding the foregoing, a Specified Merger/Transfer Transaction shall not constitute a Change of Control; or

(3) at any time prior to an Issuer Qualified IPO, the Issuer ceases to be a Wholly-Owned Subsidiary of Intermediate Holdings (except in a transaction consummated in accordance with Section 5.01).

Code ” means the Internal Revenue Code of 1986, as amended.

Collateral ” means all property and assets subject to Liens created pursuant to any Collateral Document to secure any Obligation under the Notes, the Intermediate Holdings Guarantee and the Note Guarantees.

Collateral Agent ” means The Bank of New York Mellon Trust Company, N.A. acting as the collateral agent for the holders of the Notes and the Trustee under the Collateral Documents and any successor acting in such capacity.

Collateral Agreement ” means that certain Collateral Agreement, dated as of February 3, 2011, by the Issuer, Intermediate Holdings and the Note Guarantors in favor of the Collateral Agent, as the same may be amended, supplemented or otherwise modified from time to time, including pursuant to a joinder agreement.

Collateral Documents ” means the security agreements, pledge agreements, agency agreements, Mortgages, deeds of trust, collateral assignments, collateral agency agreements, debentures and other instruments and documents executed and delivered by the Issuer, Intermediate Holdings or any Note Guarantor pursuant to this Indenture or any of the foregoing (including, without limitation, the financing statements under the Uniform Commercial Code of the relevant state), as the same may be amended, supplemented or otherwise modified from time to time and pursuant to which Collateral is pledged, assigned or granted to or on behalf of the Collateral Agent for the ratable benefit of the holders of the Notes and the Trustee or notice of such pledge, assignment or grant is given.

Consolidated Interest Expense ” means, with respect to any Person for any period, the sum, without duplication, of:

(1) consolidated interest expense of such Person and the Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount and bond premium, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations ( provided, however , that if interest rate Hedging Obligations result in net benefits rather than costs, such benefits shall be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such net benefits are otherwise reflected in Consolidated Net Income) and excluding amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and expensing of any bridge commitment or other financing fees); plus

(2) consolidated capitalized interest of such Person and the Restricted Subsidiaries for such period, whether paid or accrued; plus

 

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(3) commissions, discounts, yield and other fees and charges Incurred in connection with any Permitted Securitization Financing to the extent such amounts have not been deducted in the presentation of consolidated revenues of such Person; minus

(4) interest income for such period.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

Consolidated Leverage Ratio ” means, with respect to any Person at any date, the ratio of (i) the aggregate amount of all outstanding Indebtedness and Disqualified Stock of such Person and its Restricted Subsidiaries and Preferred Stock of Non-Guarantor Subsidiaries of such Person as of such date (determined on a consolidated basis in accordance with GAAP) less the amount of cash and Cash Equivalents (other than cash and Cash Equivalents of Special Purpose Securitization Subsidiaries) in excess of any Restricted Cash that would be stated on the balance sheet of such Person and its Restricted Subsidiaries as of such date of determination to (ii) EBITDA of such Person for the four full fiscal quarters for which internal financial statements are available immediately preceding such date. In the event that the Issuer or any of the Restricted Subsidiaries Incurs or redeems any Indebtedness or issues or redeems Disqualified Stock or any Non-Guarantor Subsidiary issues or redeems Preferred Stock subsequent to the commencement of the period for which the Consolidated Leverage Ratio is being calculated but on or prior to or simultaneously with the event for which the calculation of the Consolidated Leverage Ratio is made (the “Consolidated Leverage Calculation Date”), then the Consolidated Leverage Ratio shall be calculated giving pro forma effect to such Incurrence or such issuance or redemption of Disqualified Stock or Preferred Stock or redemption of Indebtedness, as if the same had occurred at the beginning of the applicable four-quarter period; provided that the Issuer may elect, pursuant to an Officer’s Certificate delivered to the Trustee, that all or any portion of the commitment under any Indebtedness as being Incurred at the time such commitment is entered into and any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time. Notwithstanding the foregoing and for purposes of this calculation, the aggregate principal amount of Indebtedness shall be calculated without giving effect to purchase accounting adjustments.

For purposes of making the computation referred to above, Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to a company, operating unit, division, segment, business, group of assets or lines of business, that the Issuer or any of the Restricted Subsidiaries has made after the Issue Date and during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Consolidated Leverage Calculation Date (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into

 

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the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation, in each case with respect to an operating unit, division, segment, business, group of assets or lines of business that would have required adjustment pursuant to this definition, then the Consolidated Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period.

For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer.

Consolidated Net Income ” means, with respect to any Person for any period, without duplication, the aggregate of the Net Income of such Person and the Restricted Subsidiaries for such period, on a consolidated basis; provided, however , that:

(1) any net after-tax extraordinary, nonrecurring or unusual gains or losses or income, expenses or charges (less all fees and expenses relating thereto), including, without limitation, (i) severance expenses, relocation or other restructuring expenses, fees, expenses or charges related to plant, facility, store and office closures, consolidations, downsizings and/or shutdowns (including future lease commitments and contract termination costs with respect thereto), (ii) fees, expenses or charges Incurred in connection with the Cendant Spin-Off, (iii) expenses or charges related to curtailments or modifications to pension or other post-employment benefit plans, (iv) any fees, expenses or charges related to any Equity Offering, Permitted Investment, acquisition (including integration costs) or Indebtedness permitted to be Incurred by this Indenture (in each case, whether or not successful), including any such fees, expenses, tender premiums, charges or change in control payments made under the Merger Documents or otherwise related to the Merger Transactions (including any transition-related expenses Incurred prior to, on or after April 10, 2007), and (v) any fees, expenses or charges related to the Exchange Offers, the offering of Notes and the Senior Credit Facility Amendment, in each case, shall be excluded;

(2) any increase in amortization or depreciation or any one-time non-cash charges or increases or reductions in Net Income, in each case resulting from purchase accounting in connection with the Merger Transactions or any acquisition that is consummated after April 10, 2007 shall be excluded (including any acquisition by a third party, directly or indirectly, of the Issuer);

(3) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;

(4) any net after-tax income or loss from abandoned, closed or discontinued operations and any net after-tax gains or losses on disposal of abandoned, closed or discontinued operations shall be excluded;

 

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(5) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by senior management or the Board of Directors of the Issuer) shall be excluded;

(6) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of Indebtedness, Hedging Obligations and other derivative instruments shall be excluded;

(7) except with respect to joint ventures related to Title Resource Group and the Issuer’s mortgage origination business (whether conducted through PHH Home Loans, LLC or other joint ventures of the Issuer or its Restricted Subsidiaries), the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;

(8) solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of Cumulative Credit, the Net Income for such period of any Restricted Subsidiary (other than any Note Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;

(9) an amount equal to the amount of Tax Distributions actually made to any parent of such Person in respect of such period in accordance with Section 4.07(b) (12) shall be included as though such amounts had been paid as income taxes directly by such Person for such period;

(10) any non-cash impairment charges or asset write-offs and amortization of intangibles in each case arising pursuant to the application of GAAP shall be excluded;

(11) any (a) severance or relocation costs or expenses, (b) one-time non-cash compensation charges, (c) costs and expenses related to employment of terminated employees, (d) costs or expenses realized in connection with, resulting from or in anticipation of the Merger Transactions or (e) non-cash costs or expenses realized in connection with or resulting from employee benefit plans or post-employment benefit plans (including long-term incentive plans), stock appreciation or similar rights, stock

 

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options or other rights of officers, directors and employees, in each case of such Person or any of the Restricted Subsidiaries, shall be excluded;

(12) accruals and reserves that are established or adjusted within 12 months of April 10, 2007, in each case, related to or as a result of the Merger Transactions and that are so required to be established or adjusted in accordance with GAAP, and changes in accruals and reserves as a result of the adoption or modification of accounting policies in connection with the Merger Transactions, shall be excluded;

(13) (a)(i) the non-cash portion of “straight-line” rent expense shall be excluded and (ii) the cash portion of “straight-line” rent expense which exceeds the amount expensed in respect of such rent expense shall be included and (b) non-cash gains, losses, income and expenses resulting from fair value accounting required by Accounting Standards Codification 815 (or successor rule) shall be excluded;

(14) unrealized gains and losses relating to hedging transactions and mark-to-market of Indebtedness denominated in foreign currencies resulting from the applications of Accounting Standards Codification 830 (or successor rule) shall be excluded;

(15) any currency translation gains and losses related to currency reimbursements of Indebtedness, and any net loss or gain resulting from Hedging Obligations for currency exchange risk, shall be excluded;

(16) solely for the purpose of determining the amount available for Restricted Payments under clause (1) of the definition of “Cumulative Credit” the difference, if positive, of the Consolidated Taxes of the Issuer calculated in accordance with GAAP and the actual Consolidated Taxes paid in cash by the Issuer during any Reference Period shall be included;

(17) any expenses or income (including increases or reversals of reserves) relating to the Cendant Contingent Liabilities shall be excluded; and

(18) any income or other economic benefits accruing to the Issuer and its Subsidiaries pursuant to the Cendant Contingent Assets, whether in the form of cash or tax benefits shall be excluded, provided any economic benefits accruing to the Issuer and its Restricted Subsidiaries pursuant to assets out of or arising from payments to be received under Article III of the Tax Receivable Agreement dated as of February 22, 2005 by and among Cendant Corporation, Cendant Mobility Services Corporation and Wright Express Corporation shall be included.

Notwithstanding the foregoing, for the purpose of Section 4.07 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries or a Restricted Subsidiary to the extent such dividends, repayments, advances or transfers increase the amount of Restricted Payments permitted under Section 4.07 pursuant to clauses (5) and (6) of the definition of Cumulative Credit.

 

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Consolidated Non-cash Charges ” means, with respect to any Person for any period, the aggregate depreciation, amortization and other non-cash expenses, including any deferred financing fees, write-offs or write-downs and amortization of expenses attributable to pending real estate brokerage transactions and property listings of Persons or operations acquired by such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP ( provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA to such extent paid, and excluding amortization of a prepaid cash item that was paid in a prior period).

Consolidated Taxes ” means, with respect to any Person for any period, the provision for taxes based on income, profits or capital, including, without limitation, state, franchise and similar taxes, of such Person for such period on a consolidated basis and any Tax Distributions taken into account in calculating Consolidated Net Income.

Contingent Obligations ” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:

(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor;

(2) to advance or supply funds:

(A) for the purchase or payment of any such primary obligation; or

(B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

Convertible Notes ” means, collectively, the Issuer’s 11.00% Series A Convertible Notes due 2018, 11.00% Series B Convertible Notes due 2018 and 11.00% Series C Convertible Notes due 2018 in existence on the Issue Date (less the aggregate principal amount of Convertible Notes that are thereafter converted, repurchased, redeemed, discharged or otherwise paid).

Convertible Notes Guarantees ” means any guarantee of the obligations of the Issuer under the Convertible Notes and the Convertible Notes Indenture by any Person in accordance with the provisions of the Convertible Notes Indenture.

Convertible Notes Indenture ” means the Indenture, dated as of January 5, 2011, among the Issuer, Holdings, the guarantors party thereto and The Bank of New York Mellon

 

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Trust Company, N.A., as Trustee, governing the Convertible Notes, as amended, supplemented or modified from time to time.

Corporate Trust Office of the Trustee ” means the designated office of the Trustee at which at any time its corporate trust business shall be administered, which office at the dated hereof is located at 525 William Penn Place, 38th Floor, Pittsburgh, PA 15259, Attention: Corporate Trust Administration, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

Credit Agreement ” means, collectively, (i) the credit agreement dated as of April 10, 2007, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof, among the Issuer, Intermediate Holdings, as guarantor, the other guarantors party thereto, the financial institutions party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, and (ii) whether or not the credit agreement referred to in clause (i) remains outstanding, if designated by the Issuer to be included in the definition of “Credit Agreement,” one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, Permitted Securitization Financings (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers, guarantors or issuers or lenders or group of lenders, and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

Credit Agreement Documents ” means the collective reference to the Credit Agreement, any notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time.

Cumulative Credit ” means the sum of (without duplication):

(1) 50% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period, the “Reference Period”) from the Issue Date to the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit); provided, however that, to the extent the Consolidated Leverage Ratio of the Issuer on a pro forma basis as if the Restricted Payment had been made and any Indebtedness Incurred on such date had been

 

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Incurred would have been less than 3.0 to 1.0 and the Consolidated Net Income of the Issuer is positive, then 75% of the Consolidated Net Income of the Issuer for the aforementioned period shall be included pursuant to this clause (1), plus

(2) 100% of the aggregate net proceeds, including cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash, received by the Issuer after the Issue Date (other than net proceeds to the extent such net proceeds have been used to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 4.09(b)(19)) from the issue or sale of Equity Interests of the Issuer (excluding, without duplication, (i) Refunding Capital Stock, Designated Preferred Stock, Excluded Contributions and Disqualified Stock and (ii) any net cash proceeds of Equity Offerings to the extent used to redeem Notes in compliance with Section 3.07), including Equity Interests issued upon conversion of Indebtedness or Disqualified Stock or upon exercise of warrants or options (other than an issuance or sale to a Restricted Subsidiary of the Issuer), plus

(3) 100% of the aggregate amount of contributions to the capital of the Issuer received in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash received after the Issue Date (other than Refunding Capital Stock, Designated Preferred Stock, Excluded Contributions, Disqualified Stock and contributions to the extent such contributions have been used to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 4.09(b)(19)), plus

(4) the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of the Issuer or any Restricted Subsidiary issued after the Issue Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged for Equity Interests in the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer ( provided that such Indebtedness or Disqualified Stock is retired or extinguished), plus

(5) 100% of the aggregate amount received by the Issuer or any Restricted Subsidiary after the Issue Date in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash received by the Issuer or any Restricted Subsidiary from:

(A) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of Restricted Investments made by the Issuer and the Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from the Issuer and the Restricted Subsidiaries by any Person (other than the Issuer or any of the Restricted Subsidiaries) and from repayments of loans or advances (including the release of any guarantee that constituted a Restricted Investment when made) that constituted Restricted Investments (other than, in each case, to the extent that the Restricted Investment was made pursuant to clause (7) or (10) of Section 4.07(b)),

 

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(B) the sale (other than to the Issuer or a Restricted Subsidiary) of the Capital Stock of an Unrestricted Subsidiary (other than an Unrestricted Subsidiary to the extent the investments in such Unrestricted Subsidiary was made by the Issuer or a Restricted Subsidiary pursuant to clause (7) or (10) of Section 4.07(b) or to the extent such Investment constituted a Permitted Investment), or

(C) a distribution or dividend from an Unrestricted Subsidiary, plus

(6) in the event any Unrestricted Subsidiary has been re-designated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary after the Issue Date, the Fair Market Value (as determined in accordance with the next succeeding sentence) of the Investment of the Issuer in such Unrestricted Subsidiary at the time of such re-designation, combination or transfer (or of the assets transferred or conveyed, as applicable), after taking into account any Indebtedness associated with the Unrestricted Subsidiary so designated or combined or any Indebtedness associated with the assets so transferred or conveyed (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to clause (7) or (10) of Section 4.07(b) or constituted a Permitted Investment).

The Fair Market Value of property, other than cash, covered by clauses (2), (3), (5) and (6) of this definition of “Cumulative Credit” shall be determined in good faith by the Issuer, and

(1) in the case of property with a Fair Market Value in excess of $30.0 million, shall be set forth in an Officer’s Certificate or

(2) in the case of property with a Fair Market Value in excess of $60.0 million, shall be set forth in a resolution approved by at least a majority of the Board of Directors of the Issuer.

Custodian ” means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.

Default ” means any event which is, or after notice or passage of time or both would be, an Event of Default.

Definitive Note ” means a certificated Initial Note or Additional Note (bearing the Restricted Notes Legend if the transfer of such Note is restricted by applicable law) that does not include the Global Notes Legend.

Delayed Draw Term Lender ” shall mean a lender under the Credit Agreement with a Delayed Draw Term Loan Commitment or an outstanding Delayed Draw Term Loan.

Delayed Draw Term Loan ” shall mean the term loan made by one or more Delayed Draw Term Lenders pursuant to the terms of the Credit Agreement in an aggregate principal amount not to exceed $1.2 billion.

 

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Delayed Draw Term Loan Commitment ” shall mean, with respect to each Delayed Draw Term Lender, the commitment of such lender to make Delayed Draw Term Loans to the Issuer after the closing date of the Credit Agreement in accordance with the terms thereof.

Depositary ” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

Designated Non-cash Consideration ” means the Fair Market Value of non-cash consideration received by the Issuer or one of the Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate, setting forth the basis of such valuation, executed by the principal financial officer of the Issuer, less the amount of Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.

Designated Preferred Stock ” means Preferred Stock of the Issuer or any direct or indirect parent of the Issuer (in each case other than Disqualified Stock), that is issued for cash (other than to the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in the definition of “Cumulative Credit”.

Disqualified Stock ” means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable, putable or exchangeable), or upon the happening of any event:

(1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale; provided that the relevant asset sale or change of control provisions, taken as a whole, are no more favorable in any material respect to holders of such Capital Stock than the asset sale and change of control provisions applicable to the Notes and any purchase requirement triggered thereby may not become operative until compliance with the asset sale and change of control provisions applicable to the Notes (including the purchase of any Notes tendered pursuant thereto)),

(2) is convertible or exchangeable at the option of the holder thereof for Indebtedness or Disqualified Stock of such Person, or

(3) is redeemable at the option of the holder thereof, in whole or in part,

in each case prior to 91 days after the maturity date of the Notes; provided, however, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable at the option of the holder thereof or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided , further, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the Issuer or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Issuer in order to satisfy applicable statutory or regulatory obligations or as a result of such

 

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employee’s termination, death or disability; provided , further, that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

Domestic Subsidiary ” means a Restricted Subsidiary that is not a Foreign Subsidiary.

EBITDA ” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication, to the extent the same was deducted in calculating Consolidated Net Income:

(1) Consolidated Taxes; plus

(2) Consolidated Interest Expense; plus

(3) Consolidated Non-cash Charges; plus

(4) business optimization expenses and other restructuring charges, expenses or reserves (which, for the avoidance of doubt, shall include, without limitation, the effect of retention, systems establishment costs, curtailments or modifications to pension and post retirement employee benefit plans that result in pension settlement charges); provided that with respect to each business optimization expense or other restructuring charge or reserve, the Issuer shall have delivered to the Trustee an Officer’s Certificate specifying and quantifying such expense, charge or reserve and stating that such expense, charge or reserve is a business optimization expense or other restructuring charge or reserve, as the case may be; plus

(5) the amount of management, monitoring, consulting, transaction and advisory fees and related expenses paid to the Sponsors (or any accruals relating to such fees and related expenses) during such period pursuant to the terms of the agreements between the Sponsors and the Issuer and its Subsidiaries as in effect on April 10, 2007; provided that such amount shall not exceed the amount permitted to be paid to the Sponsors pursuant to Section 4.11(b) (3); plus

(6) all add backs reflected in the financial presentation of “Adjusted EBITDA—Senior Secured Credit Facility Covenant Compliance” in the amounts set forth in and as further described in the Offering Memorandum but only to the extent such add backs occurred in the consecutive four quarter period used in the calculations of Fixed Charge Coverage Ratio and Consolidated Leverage Ratio, as the case may be; plus

(7) the amount of net cost savings projected by the Issuer in good faith to be realized as a result of specified actions taken or to be taken (calculated on a pro forma basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that (w) such cost savings are reasonably identifiable and factually supportable, (x) such actions have been taken or are to be taken and must be expected to be achieved on a run-rate basis within 90 days after the date of determination to take such action, (y) no cost

 

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savings shall be added pursuant to this clause (7) to the extent duplicative of any expenses or charges relating to such cost savings that are included in the calculations of Consolidated Net Income or EBITDA with respect to such period and (z) the aggregate amount of cost savings added pursuant to this clause (7) shall not exceed $75.0 million for any four consecutive quarter period (which adjustments may be incremental to pro forma adjustments made pursuant to the second paragraph of the definitions of “Fixed Charge Coverage Ratio” or “Consolidated Leverage Ratio”, as applicable); plus

(8) the amount of loss on any sale of Securitization Assets to a Special Purpose Securitization Subsidiary in connection with any Permitted Securitization Financing that is not shown as a liability on a consolidated balance sheet prepared in accordance with GAAP; plus

(9) storefront conversion costs relating to acquired stores by the Issuer or any Restricted Subsidiary; plus

(10) any costs or expenses incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or stockholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of the Issuer or a Note Guarantor solely to the extent that such net cash proceeds are excluded from the calculation of the Cumulative Credit;

less , without duplication,

(11) non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items for which cash was received in a prior period); less

(12) all deductions reflected in the financial presentation of “Adjusted EBITDA—Senior Secured Credit Facility Covenant Compliance” in the amounts set forth in and as further described in the Offering Memorandum, but only to the extent such deductions occurred in the consecutive four quarter period used in the calculations of Fixed Charge Coverage Ratio and Consolidated Leverage Ratio, as the case may be.

Equity Interests ” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

Equity Offering ” means any public or private sale after the Issue Date of common stock or Preferred Stock of the Issuer or any direct or indirect parent of the Issuer, as applicable (other than Disqualified Stock), other than:

(1) public offerings with respect to the Issuer’s or such direct or indirect parent’s common stock registered on Form S-4 or Form S-8;

(2) issuances to any Subsidiary of the Issuer; and

 

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(3) any such public or private sale that constitutes an Excluded Contribution.

Event of Default ” has the meaning set forth under Section 6.01 hereof.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

Exchange Offers ” means the Issuer’s private exchange offers to exchange the outstanding Existing 10.50% Senior Cash Notes, Existing Senior Toggle Notes and Existing 12.375% Senior Subordinated Notes for newly issued Existing 11.50% Senior Cash Notes, Existing 12.00% Senior Cash Notes, Existing 13.375% Senior Subordinated Notes and/or Convertible Notes.

Excluded Contributions ” means the Cash Equivalents or other assets (valued at their Fair Market Value as determined in good faith by senior management or the Board of Directors of the Issuer) received by the Issuer after the Issue Date from:

(1) contributions to its common Capital Stock, and

(2) the sale (other than to a Subsidiary of the Issuer or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Issuer or any Subsidiary, to the extent such sale to such equity, stock option or other plan is financed by loans from or guaranteed by, the Issuer or any Restricted Subsidiary) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Issuer,

in each case designated as Excluded Contributions pursuant to an Officer’s Certificate executed by an Officer of the Issuer on or promptly after the date such capital contributions are made or the date such Capital Stock is sold, as the case may be, which are excluded from the calculation set forth in the definition of the term “Cumulative Credit”.

Excluded Property ” has the meaning assigned to “Excluded Property” in the Collateral Agreement.

Existing 10.50% Senior Cash Notes ” means the 10.50% Senior Notes due 2014, issued by the Issuer pursuant to the Existing 10.50% Senior Cash Notes Indenture.

Existing 11.50% Senior Cash Notes ” means the 11.50% Senior Notes due 2017, issued by the Issuer pursuant to the Existing 11.50% Senior Cash Notes Indenture.

Existing 12.00% Senior Cash Notes ” means the 12.00% Senior Notes due 2017, issued by the Issuer pursuant to the Existing 12.00% Senior Cash Notes Indenture.

Existing 12.375% Senior Subordinated Notes ” means the 12.375% Senior Subordinated Notes due 2015, issued by the Issuer pursuant to the Existing 12.375% Senior Subordinated Notes Indenture and in existence on the Issue Date (less the aggregate principal amount of Existing 12.375% Senior Subordinated Notes that are thereafter converted, repurchased, redeemed, discharged or otherwise paid).

 

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Existing 13.375% Senior Subordinated Notes ” means the 13.375% Senior Subordinated Notes due 2018, issued by the Issuer pursuant to the Existing 13.375% Senior Subordinated Notes Indenture.

Existing 10.50% Senior Cash Notes Indenture ” means the Indenture dated as of April 10, 2007 among the Issuer, the guarantors party thereto and The Bank of New York Mellon, as successor Trustee, governing the Existing 10.50% Senior Cash Notes, as amended, supplemented or modified from time to time.

Existing 11.50% Senior Cash Notes Indenture ” means the Indenture dated as of January 5, 2011 among the Issuer, Holdings, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee, governing the Existing 11.50% Senior Cash Notes, as amended, supplemented or modified from time to time.

Existing 12.00% Senior Cash Notes Indenture ” means the Indenture dated as of January 5, 2011 among the Issuer, Holdings, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee, governing the Existing 12.00% Senior Cash Notes, as amended, supplemented or modified from time to time.

Existing 12.375% Senior Subordinated Notes Indenture ” means the Indenture dated as of April 10, 2007 among the Issuer, the guarantors party thereto and The Bank of New York Mellon, as successor Trustee, governing the Existing 12.375% Senior Subordinated Notes, as amended, supplemented or modified from time to time.

Existing 13.375% Senior Subordinated Notes Indenture ” means the Indenture dated as of January 5, 2011 among the Issuer, Holdings, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee, governing the Existing 13.375% Senior Subordinated Notes, as amended, supplemented or modified from time to time.

Existing Indentures ” means, collectively, the Original Indentures and the Extended Maturity Notes Indentures.

Existing Intercreditor Agreement ” means the Intercreditor Agreement dated as of September 28, 2009, among JPMorgan Chase Bank, N.A., in its capacity as administrative agent pursuant to the Credit Agreement, Wilmington Trust Company, as second lien collateral agent for the second priority secured parties, the Issuer and each of the other loan parties party thereto, as such agreement may be amended, restated, supplemented or otherwise modified from time to time.

Existing Senior Notes ” means the Original Senior Notes, the Existing 11.50% Senior Cash Notes and the Existing 12.00% Senior Cash Notes in existence on the Issue Date (less the aggregate amount of Existing Senior Notes that are thereafter converted, repurchased, redeemed, discharged or otherwise paid).

Existing Senior Subordinated Notes ” means the Existing 12.375% Senior Subordinated Notes, the Existing 13.375% Senior Subordinated Notes and the Convertible Notes in existence on the Issue Date (less the aggregate principal amount of Existing Senior

 

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Subordinated Notes that are thereafter converted, repurchased, redeemed, discharged or otherwise paid).

Existing Senior Toggle Notes ” means the 11.00%/11.75% Senior Toggle Notes due 2014, issued by the Issuer pursuant to the Existing Senior Toggle Notes Indenture.

Existing Senior Toggle Notes Indenture ” means the Indenture dated as of April 10, 2007 among the Issuer, the guarantors party thereto and The Bank of New York Mellon, as successor Trustee, governing the Existing Senior Toggle Notes, as amended, supplemented or modified from time to time.

Existing Joint Ventures ” means joint ventures in existence on the Issue Date.

Existing Securitization Documents ” means the Apple Ridge Documents and the U.K. Documents.

Existing Securitization Financings ” means the financing programs pursuant to the Apple Ridge Documents or U.K. Documents, as amended, restated, refinanced, modified or supplemented on or prior to the Issue Date.

Extended Maturity Notes ” means, collectively, Existing 11.50% Senior Cash Notes, Existing 12.00% Senior Cash Notes, Existing 13.375% Senior Subordinated Notes and Convertible Notes in existence on the Issue Date (less the aggregate principal amount of Existing 11.50% Senior Cash Notes, Existing 12.00% Senior Cash Notes, Existing 13.375% Senior Subordinated Notes and Convertible Notes that are thereafter converted, repurchased, redeemed, discharged or otherwise paid.

Extended Maturity Notes Guarantees ” means any guarantee of the obligations of the Issuer under the Extended Maturity Notes and the Extended Maturity Notes Indentures by Holdings or any Restricted Subsidiary in accordance with the provisions of the Extended Maturity Notes Indentures.

Extended Maturity Notes Indentures ” means, collectively, the Existing 11.50% Senior Cash Notes Indenture, the Existing 12.00% Senior Cash Notes Indenture, the Existing 13.375% Senior Subordinated Notes Indenture and the Convertible Notes Indenture.

Fair Market Value ” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.

First Priority Agent ” has the meaning given to the term “First Lien Senior Priority Representative” in the New Intercreditor Agreement.

First Priority Lien Obligations ” means the Obligations under the Credit Agreement that are secured by a Lien that is senior in priority to the Liens securing the Notes and the Note Guarantees and any other Obligation that constitutes “First Priority Obligations” as defined in the New Intercreditor Agreement.

 

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First Priority Lien Obligations Payment Date ” means the first date on which:

(1) the First Priority Lien Obligations have been paid in full or cash collateralized or defeased in accordance with the terms of the agreements governing the First Priority Lien Obligations (other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no assertion of liability and no claim or demand for payment has been made);

(2) all commitments to extend credit that would constitute First Priority Lien Obligations have terminated;

(3) there are no outstanding letters of credit or similar instruments issued under the agreements governing the First Priority Lien Obligations (other than such as have been cash collateralized or defeased in accordance with the terms of the agreements governing the First Priority Lien Obligations); and

(4) the First Priority Agent has delivered a written notice to the Collateral Agent stating that the events described in clauses (1), (2) and (3) have occurred to the satisfaction of the holders of the First Priority Lien Obligations.

Fixed Charge Coverage Ratio ” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Issuer or any of the Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other than in the case of revolving credit borrowings in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but on or prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.

For purposes of making the computation referred to above, Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to a company, operating unit, division, segment, business, group of assets or lines of business, that the Issuer or any of the Restricted Subsidiaries has made after the Issue Date and during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions (including the Merger), dispositions, mergers, amalgamations, consolidations and discontinued operations (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such

 

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period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation, in each case with respect to an operating unit, division, segment, business, group of assets or lines of business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period.

For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting Officer of the Issuer.

If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of twelve months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate.

Fixed Charges ” means, with respect to any Person for any period, the sum, without duplication, of:

(1) Consolidated Interest Expense of such Person for such period, and

(2) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and the Restricted Subsidiaries.

Foreign Subsidiary ” means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state or territory thereof or the District of Columbia and any Restricted Subsidiary of such Foreign Subsidiary.

GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date. For the purposes of this Indenture, the term “consolidated” with respect to any Person shall mean such Person consolidated with the Restricted Subsidiaries, and shall not include any

 

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Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as an Investment.

Global Notes Legend ” means the legend set forth under that caption in Exhibit A to this Indenture.

Government Obligations ” means securities that are:

(1) direct obligations of the United States of America, for the timely payment of which its full faith and credit is pledged, or

(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such Government Obligations or a specific payment of principal of or interest on any such Government Obligations held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Obligations or the specific payment of principal of or interest on the Government Obligations evidenced by such depository receipt.

guarantee ” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

Hedging Obligations ” means, with respect to any Person, the obligations of such Person under:

(1) currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and

(2) other similar agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

Holder ” means the Person in whose name a Note is registered on the Registrar’s books.

Holdings ” means the party named as such in the preamble to this Indenture and its successors.

 

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Holdings Class A Common Stock ” means Class A common stock of Holdings, par value $0.01 per share.

Holdings Guarantee ” means the guarantee of the obligations of the Issuer under this Indenture and the Notes by Holdings in accordance with the provisions of this Indenture.

Holdings Pari Passu Indebtedness ” means with respect to Holdings, (i) the guarantee by Holdings of the obligations of the Issuer under the Existing 11.50% Senior Cash Notes Indenture in accordance with the provisions of the Existing 11.50% Senior Note Indenture, (ii) the guarantee by Holdings of the obligations of the Issuer under the Existing 10.50% Senior Cash Notes Indenture in accordance with the provisions of the Existing 10.50% Senior Cash Notes Indenture, (iii) the guarantee by Holdings of the obligations of the Issuer under the Existing 12.00% Senior Cash Notes Indenture in accordance with the provisions of the Existing 12.00% Senior Cash Notes Indenture, (iv) the guarantee by Holdings of the obligations of the Issuer under the Existing Senior Toggle Notes Indenture in accordance with the provisions of the Existing Senior Toggle Notes Indenture and (v) any Indebtedness that is not Holdings Senior Indebtedness or Holdings Subordinated Indebtedness.

Holdings Representative ” means the trustee, agent or representative (if any) for an issue of Holdings Senior Indebtedness; provided that if, and for so long as, such Holdings Senior Indebtedness lacks such a Holdings Representative, then the Holdings Representative for such Holdings Senior Indebtedness shall at all times constitute the holder or holders of a majority in outstanding principal amount of obligations under such Holdings Senior Indebtedness.

Holdings Senior Indebtedness ” means with respect to Holdings means any future Indebtedness of Holdings that is designated by Holdings as Holdings Senior Indebtedness.

Holdings Subordinated Indebtedness ” means with respect to Holdings, (i) any guarantee by Holdings of the obligations of the Issuer under the Existing 12.375% Senior Subordinated Notes Indenture in accordance with the provisions of the Existing 12.375% Senior Subordinated Notes Indenture, (ii) any guarantee by Holdings of the obligations of the Issuer under the Existing 13.375% Senior Subordinated Notes Indenture in accordance with the provisions of the Existing 13.375% Senior Subordinated Notes Indenture, (iii) any guarantee by Holdings of the obligations of the Issuer under the Convertible Notes Indenture in accordance with the provisions of the Convertible Notes Indenture and (iv) any Indebtedness of Holdings, guarantee of Holdings or obligation of Holdings that specifically provides that such Indebtedness of Holdings, guarantee of Holdings or obligation of Holdings is to rank junior in right of payment to the Holdings Guarantee.

Incur ” means issue, assume, guarantee, incur or otherwise become liable for; provided , however , that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.

Indebtedness ” means, with respect to any Person:

(1) the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds,

 

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notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except (i) any such balance that constitutes a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP), (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

(2) to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and

(3) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however , that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person;

provided, however , that notwithstanding the foregoing, Indebtedness shall be deemed to exclude (1) Contingent Obligations incurred in the ordinary course of business and the Cendant Contingent Liabilities (including the Contingent Obligations described in note 13 to the Issuer’s consolidated financial statements for the year ended December 31, 2009, incorporated by reference in the Offering Memorandum) (not in respect of borrowed money); (2) deferred or prepaid revenues or marketing fees; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) obligations under or in respect of a Permitted Securitization Financing (but including the excess, if any, of the amount of the obligations thereunder or in respect thereof over the aggregate receivables balances securing or otherwise supporting such obligations but only to the extent that the Issuer or any Subsidiary of the Issuer other than a Special Purpose Securitization Subsidiary is directly or indirectly liable for such excess); (5) obligations under or in respect of Arbitrage Programs except in connection with the calculation of the Consolidated Leverage Ratio; (6) obligations to make payments in respect of funds held under escrow arrangements in the ordinary course of business; (7) obligations to make payments to third party insurance underwriters in respect of premiums collected by the Issuer and the Restricted Subsidiaries in the ordinary course of business; or (8) obligations under the Merger Documents.

Notwithstanding anything in this Indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Accounting Standards Codification 815 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Indenture but for the

 

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application of this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture.

Indenture ” means this Indenture, as amended or supplemented from time to time.

Independent Financial Advisor ” means an accounting, appraisal, investment banking firm or consultant in each case of nationally recognized standing, that is, in the good faith determination of the Issuer, qualified to perform the task for which it has been engaged.

Initial Notes ” has the meaning set forth in the recitals hereto.

Initial Purchasers ” means J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co., Barclays Capital Inc, and Morgan Joseph LLC.

Insurance Business ” means one or more aspects of the business of soliciting, administering, selling, issuing or underwriting insurance or reinsurance.

Insurance Subsidiary ” means any Subsidiary that is licensed by any Applicable Insurance Regulatory Authority to conduct, and conducts, an Insurance Business.

Interest Payment Date ” means February 15 and August 15 of each year to Stated Maturity.

Intercreditor Agreements ” means the New Intercreditor Agreement and the Existing Intercreditor Agreement.

Intermediate Holdings ” means the party named as such in the preamble to this Indenture and its successors.

Intermediate Holdings Guarantee ” means the guarantee of the obligations of the Issuer under this Indenture and the Notes by Intermediate Holdings in accordance with the terms of this Indenture.

Investment Grade Rating ” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

Investment Grade Securities ” means:

(1) securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents);

(2) securities that have a rating equal to or higher than Baa3 (or equivalent) by Moody’s or BBB- (or equivalent) by S&P, or an equivalent rating by any other Rating Agency, but excluding any debt securities or loans or advances between and among the Issuer and its Subsidiaries;

 

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(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution; and

(4) corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.

Investments ” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit, security deposits and advances to customers or suppliers, advances or loans to franchisees in the ordinary course of business (whether evidenced by a note or otherwise) and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of the Issuer in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section 4.07:

(1) “Investments” shall include the portion (proportionate to the Issuer’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of the Issuer at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a re-designation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to:

(a) the Issuer’s “Investment” in such Subsidiary at the time of such re-designation, less

(b) the portion (proportionate to the Issuer’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such re-designation; and

(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by the senior management or the Board of Directors of the Issuer.

Issuer Qualified IPO ” means an initial public offering of Equity Interests of the Issuer constituting a Qualified IPO.

Issue Date ” means February 3, 2011, the date on which the Notes are originally issued.

Issuer ” means the party named as such in the preamble to this Indenture and its successors and not any of its Subsidiaries.

 

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Issuer Order ” means a written request or order signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of such Issuer, and delivered to the Trustee.

Junior Lien Collateral Indebtedness ” means any Indebtedness of the Issuer, Intermediate Holdings or any Note Guarantor which is or will be secured by a Lien on the Collateral on a basis that is junior to the Notes, the Intermediate Holdings Guarantee or the Note Guarantees pursuant to the Existing Intercreditor Agreement.

Lien ” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest, preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement), any lease in the nature thereof, any agreement to give a mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest or encumbrance of any kind and, except in connection with any Permitted Securitization Financing, any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction (other than a filing for informational purposes); provided that in no event shall an operating lease or an option or an agreement to sell be deemed to constitute a Lien.

Management Fee Agreement ” means the Management Fee Agreement, dated as of April 10, 2007, by and among the Issuer, Apollo Management VI, L.P. and Apollo Alternative Assets, L.P., as in existence on April 10, 2007.

Management Group ” means the group consisting of the directors, executive officers and other management personnel of the Issuer or any direct or indirect parent of the Issuer, as the case may be, on the Issue Date.

Material Real Property ” means, collectively, all right, title and interest in and to any and all parcels of or interests in real property owned in fee by the Issuer, Intermediate Holdings or any Note Guarantor, together with, in each case, all easements, hereditaments and appurtenances relating thereto, and all improvements and appurtenant fixtures incidental to the ownership thereof and having a value at the time in excess of $10.0 million; provided that the definition of Material Real Property excludes any real property acquired by Intermediate Holdings, the Issuer or any Note Guarantor in the ordinary course of its relocation services business.

Merger ” means the acquisition by Affiliates of the Sponsors of Realogy pursuant to the Merger Documents.

Merger Documents ” means the Agreement and Plan of Merger by and among Holdings, Domus Acquisition Corp. and the Issuer, dated as of December 15, 2006, and any other document entered into in connection therewith, in each case as amended, supplemented or modified from time to time on or prior to April 10, 2007.

Merger Transactions ” means the Merger and the transactions contemplated by the Merger Documents, the offerings of the Original Notes, and borrowings made pursuant to the

 

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Credit Agreement on April 10, 2007 and the refinancing of the then Existing Securitization Financings (which may have occurred prior to April 10, 2007) and, in each case, the application of the proceeds therefrom.

Moody’s ” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

Mortgages ” means, collectively, the mortgages, trust deeds, deeds of trust, deeds to secure Indebtedness, and other Collateral Documents delivered with respect to the Premises, each in form and substance reasonably satisfactory to the Collateral Agent.

Net Income ” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

Net Proceeds ” means the aggregate cash proceeds received by the Issuer or any of the Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements related thereto), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness that is secured with a Lien that has a higher priority than the Liens securing the Notes, the Intermediate Holdings Guarantee and the Note Guarantees by any assets subject to such Asset Sale, in accordance with the terms of any Lien upon such assets, and that is required (other than pursuant to clause (1) of Section 4.10(b)) to be paid as a result of such transaction, and any deduction of appropriate amounts to be provided by the Issuer as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Issuer after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction and any distributions and payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Sale.

New Intercreditor Agreement ” means the Intercreditor Agreement to be dated as of the Issue Date among JPMorgan Chase Bank, N.A., in its capacity as administrative agent pursuant to the Credit Agreement, and the Collateral Agent, as such agreement may be amended, restated, supplemented or otherwise modified from time to time.

Non-Guarantor Subsidiary ” means a Restricted Subsidiary that is not a Note Guarantor.

 

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Note Guarantees ” means any guarantee of the obligations of the Issuer under this Indenture and the Notes by any Restricted Subsidiary in accordance with the provisions of this Indenture.

Note Guarantor ” means any Restricted Subsidiary that Incurs a Note Guarantee and its successors; provided that upon the release or discharge of such Person from its Note Guarantee in accordance with this Indenture, such Person ceases to be a Note Guarantor.

Notes ” means the Initial Notes and more particularly means any Note authenticated and delivered under this Indenture. For all purposes of this Indenture, the term “Notes” shall also include any Additional Notes that may be issued under a supplemental indenture, and Notes to be issued or authenticated upon transfer, replacement or exchange of Notes. The Initial Notes issued on the Issue Date and Additional Notes shall be treated as a single class for all purposes under this Indenture.

NRT ” means NRT Incorporated, a Delaware corporation, and any successors thereto.

Obligations ” means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness; provided that Obligations with respect to the Notes shall not include fees or indemnifications in favor of the Trustee and other third parties other than the Holders of the Notes.

Offering Memorandum ” means the offering memorandum, dated January 27, 2011, relating to the sale of the Initial Notes.

Officer ” means the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Issuer. “Officer” of Holdings, Intermediate Holdings or any Note Guarantor has a correlative meaning.

Officer’s Certificate ” means a certificate signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer that meets the requirements set forth in this Indenture. “Officer’s Certificate” of Holdings, Intermediate Holdings or any Note Guarantor has a correlative meaning.

Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer, Holdings, Intermediate Holdings or a Note Guarantor.

 

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Original Indentures ” means the Existing 10.50% Senior Cash Notes Indenture, the Existing Senior Toggle Notes Indenture and the Existing 12.375% Senior Subordinated Notes Indenture.

Original Notes ” means the aggregate principal amount of Existing 10.50% Senior Cash Notes, Existing Senior Toggle Notes and Existing 12.375% Senior Subordinated Notes in existence on the Issue Date less the aggregate principal amount of Existing 10.50% Senior Cash Notes, Existing Senior Toggle Notes and Existing 12.375% Senior Subordinated Notes that are thereafter repurchased, redeemed, discharged or otherwise paid.

Original Notes Guarantees ” means any guarantee of the obligations of the Issuer under the Original Notes and the Original Indentures by Holdings or any Restricted Subsidiary in accordance with the provisions of the Original Notes Indentures.

Original Senior Notes ” means Existing 10.50% Senior Cash Notes and Existing Senior Toggle Notes.

Pari Passu Secured Indebtedness ” means any Indebtedness of the Issuer, Intermediate Holdings or any Note Guarantor that ranks pari passu in right of payment with the Notes or the relevant Intermediate Holdings Guarantee or Note Guarantee and is secured by a Lien on the Collateral that has the same priority as the Lien securing the Notes and that is designated in writing by the Issuer as “First Lien Junior Priority Obligations” under the New Intercreditor Agreement.

Permitted Holders ” means, at any time, each of the Sponsors and members of the Management Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

Permitted Investments ” means:

(1) any Investment in the Issuer or any Restricted Subsidiary;

(2) any Investment in Cash Equivalents or Investment Grade Securities;

(3) any Investment by the Issuer or any Restricted Subsidiary in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary;

(4) any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of Section 4.10 or any other disposition of assets not constituting an Asset Sale;

 

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(5) any Investment existing on, or made pursuant to binding commitments existing on, the Issue Date; provided , that the amount of any such Investment may only be increased as required by the terms of such Investment as in existence on the Issue Date;

(6) advances after the Issue Date to directors, officers or employees not in excess of $50.0 million outstanding at any one time;

(7) any Investment acquired by the Issuer or any of the Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Issuer or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable; (b) as a result of a foreclosure by the Issuer or any of the Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default; or (c) as a result of the settlement, compromise or resolution of litigation, arbitration or other disputes with Persons who are not Affiliates;

(8) Hedging Obligations permitted under clause (10) of Section 4.09(b);

(9) any Investment by the Issuer or any of the Restricted Subsidiaries in a Similar Business having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (9) after the Issue Date that are at that time outstanding (after giving effect to the sale or other transfer of an Unrestricted Subsidiary to the extent the proceeds of such sale received by the Issuer and its Restricted Subsidiaries consists of cash and Cash Equivalents), not to exceed the greater of (x) $325.0 million and (y) 2.75% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however , that if any Investment pursuant to this clause (9) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be a Restricted Subsidiary;

(10) additional Investments by the Issuer or any of the Restricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (10) after the Issue Date that are at that time outstanding (after giving effect to the sale or other transfer of an Unrestricted Subsidiary to the extent the proceeds of such sale received by the Issuer and its Restricted Subsidiaries consists of cash and Cash Equivalents), not to exceed the greater of (x) $400.0 million and (y) 3.25% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(11) loans and advances to officers, directors and employees for business-related travel expenses, moving expenses and other similar expenses, in each case Incurred in the ordinary course of business;

 

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(12) Investments the payment for which consists of Equity Interests of the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer, as applicable; provided , however , that such Equity Interests will not increase the amount available for Restricted Payments under clauses (2) and (3) of the definition of Cumulative Credit;

(13) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 4.11(b) (except transactions described in clauses (2), (6), (7), (17) and (18) of such Section);

(14) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

(15) guarantees issued in accordance with Section 4.09 and Section 4.15;

(16) Investments consisting of purchases and acquisitions of inventory, supplies, materials, services and equipment or purchases of contract rights or licenses or leases of intellectual property, in each case in the ordinary course of business;

(17) Investments arising as a result of Permitted Securitization Financings;

(18) additional Investments after the Issue Date in joint ventures of the Issuer or any of the Restricted Subsidiaries not to exceed the greater of $100.0 million at any one time outstanding and 0.75% of Total Assets at the time of Incurrence (plus an amount (without duplication of amounts reflected in Consolidated Net Income) equal to any return of capital actually received in respect of Investments theretofore made pursuant to this clause (18) in the aggregate, as valued at the Fair Market Value of such Investment at the time such Investment is made); provided, however, that if any Investment pursuant to this clause (18) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (18) for so long as such Person continues to be a Restricted Subsidiary;

(19) Investments of a Restricted Subsidiary of the Issuer acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated with the Issuer or a Restricted Subsidiary in a transaction that is not prohibited by Section 5.01 after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;

(20) any Investments in connection with the Arbitrage Programs;

(21) Investments in connection with the defeasance or discharge of the Unsecured Notes or the Notes (which Investments would otherwise constitute Permitted Investments);

 

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(22) advances or loans to relocating employees of a customer in the relocation services business of the Issuer and its Restricted Subsidiaries made in the ordinary course of business; and

(23) guarantees by the Issuer or any of its Restricted Subsidiaries of operating leases (other than Capitalized Lease Obligations), trademarks, licenses, purchase agreements or of other obligations that do not constitute Indebtedness, in each case entered into by the Issuer or any Restricted Subsidiary in the ordinary course of business.

Permitted Lien ” means, with respect to any Person:

(1) pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory or regulatory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

(2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(3) Liens for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(4) Liens in favor of issuers of performance and surety bonds or bid bonds or similar liabilities or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

(5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties incurred in the ordinary course of business and title defects or irregularities that are of a minor nature and which do not in the aggregate interfere in any material respect with the ordinary course of business of such Person;

(6) (A) Liens on assets of a Non-Guarantor Subsidiary securing Indebtedness of such Restricted Subsidiary permitted to be Incurred pursuant to Section 4.09 ( provided that such Lien does not extend to the property or assets of the Issuer or any Subsidiary of

 

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the Issuer other than a Non-Guarantor Subsidiary), (B) Liens securing Indebtedness permitted to be Incurred pursuant to clauses (1)(A) ( provided that the aggregate amount of such Indebtedness that constitutes First Priority Lien Obligations or Pari Passu Secured Indebtedness shall not exceed $3,200.0 million and that any additional Indebtedness so secured in excess thereof shall be Junior Lien Collateral Indebtedness) and (24) ( provided that any such Indebtedness may be First Priority Lien Obligations, Pari Passu Secured Indebtedness or Junior Lien Collateral Indebtedness) of Section 4.09(b) and (C) Liens securing Indebtedness permitted to be Incurred pursuant to clauses (4) ( provided that such Liens do not extend to any property or assets that are not property being purchased, leased, constructed or improved with the proceeds of such Indebtedness being Incurred pursuant to clause (4)), (12) ( provided that any such Indebtedness may be First Priority Lien Obligations, Pari Passu Secured Indebtedness or Junior Lien Collateral Indebtedness), (20) ( provided that such Lien does not extend to the property or assets of any Subsidiary of the Issuer other than a Foreign Subsidiary) or (21) of Section 4.09(b);

(7) Liens existing on the Issue Date (other than with respect to Obligations in respect of (a) the Credit Agreement (which Obligations include, without limitation, Obligations in respect of the Delayed Draw Term Loans) and (b) the Notes);

(8) Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided , further, however, that such Liens may not extend to any other property owned by the Issuer or any Restricted Subsidiary;

(9) Liens on assets or property at the time the Issuer or a Restricted Subsidiary acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into the Issuer or any Restricted Subsidiary; provided, however , that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided , further, however, that the Liens may not extend to any other property owned by the Issuer or any Restricted Subsidiary;

(10) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary permitted to be Incurred in accordance with Section 4.09;

(11) Liens securing Hedging Obligations not incurred in violation of this Indenture; provided that with respect to Hedging Obligations relating to Indebtedness, such Lien extends only to the property securing such Indebtedness;

(12) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

 

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(13) leases and subleases of real property granted to others in the normal course of business which do not materially interfere with the ordinary conduct of the business of the Issuer or any of the Restricted Subsidiaries;

(14) Liens arising from precautionary Uniform Commercial Code financing statements or consignments entered into in connection with any transaction otherwise permitted under this Indenture;

(15) Liens in favor of the Issuer or any Note Guarantor;

(16) Liens in respect of Permitted Securitization Financings on all or a portion of the assets of Special Purpose Securitization Subsidiaries (including without limitation, pursuant to UCC filings covering sales of accounts, chattel paper, payment intangibles, promissory notes with respect to Permitted Securitization Financings and beneficial interests therein);

(17) deposits made in the ordinary course of business to secure liability to insurance carriers;

(18) Liens on the Equity Interests of Unrestricted Subsidiaries;

(19) grants of software and other technology licenses in the ordinary course of business;

(20) Liens securing the Notes outstanding on the Issue Date, the Intermediate Holdings Guarantee and the Note Guarantees relating to such Notes and any Obligations with respect thereto;

(21) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6)(B), (7), (8), (9), (15), (20), (37) and (38); provided , however , that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6)(B), (7), (8), (9), (15), (20), (37) and (38) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement and (z) the new Lien has no greater priority relative to the Notes, the Intermediate Holdings Guarantee and the Note Guarantees and the holders of the Indebtedness secured by such Lien have no greater intercreditor rights relative to the Notes, the Intermediate Holdings Guarantee and the Note Guarantees and holders thereof than the original Liens and the related Indebtedness;

(22) Liens on equipment of the Issuer or any Restricted Subsidiary granted in the ordinary course of business to the Issuer’s or such Restricted Subsidiary’s client at which such equipment is located;

 

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(23) judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

(24) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

(25) Liens incurred to secure cash management services or to implement cash pooling arrangements in the ordinary course of business;

(26) liens arising by virtue of any statutory or common law provisions relating to banker’s liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution or as to purchase orders and other agreements entered into with customers in the ordinary course of business;

(27) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

(28) [Reserved];

(29) Liens securing the Arbitrage Programs and related segregated deposit and securities accounts;

(30) Liens on any property or assets of the Issuer or any Restricted Subsidiary securing Indebtedness permitted by clause (27) of Section 4.09(b); provided that such Lien (i) does not apply to any other property or asset of the Issuer or any Restricted Subsidiary not securing such Indebtedness at the date of the acquisition of such property or asset and (ii) is not created in contemplation of or in connection with such acquisition;

(31) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(32) Liens solely on any cash earnest money deposits made by the Issuer or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement in respect of any Investment permitted hereunder;

(33) Liens on securities that are the subject of repurchase agreements constituting Cash Equivalents;

(34) Liens securing insurance premiums financing arrangements; provided , that such Liens are limited to the applicable unearned insurance premiums;

(35) other Liens securing obligations not to exceed $75.0 million at any one time outstanding;

(36) Liens on proceeds from Cendant Contingent Assets received by the Issuer and held in trust (or otherwise segregated or pledged) for the benefit of the other parties

 

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to the Separation and Distribution Agreement (other than Travelport Inc.) to secure the Issuer’s obligations under Section 7.9 thereof;

(37) Liens securing Indebtedness that has a stated maturity date that is longer than the Notes permitted to be Incurred pursuant to clauses (a) or (b)(1)(B) of Section 4.09 so long as on a pro forma basis after giving effect to the Incurrence of such Indebtedness the Secured Indebtedness Leverage Ratio of the Issuer would not exceed 4.25 to 1.00; provided that any such Indebtedness so secured shall be Junior Lien Collateral Indebtedness; and

(38) Liens securing Refinancing Indebtedness in respect of the Unsecured Notes permitted to be Incurred pursuant to the third proviso to clause (b)(14); provided that any such Indebtedness so secured shall be Junior Lien Collateral Indebtedness; and provided further that any Liens securing subsequent refinancings shall be incurred under clause (21) and not this clause (38).

Permitted Securitization Documents ” means all documents and agreements evidencing, relating to or otherwise governing a Permitted Securitization Financing.

Permitted Securitization Financing ” means one or more transactions pursuant to which Securitization Assets are sold, conveyed or otherwise transferred to (x) a Special Purpose Securitization Subsidiary (in the case of the Issuer or a Restricted Subsidiary of the Issuer) or (y) any other Person (in the case of a transfer by a Special Purpose Securitization Subsidiary), or Liens are granted in Securitization Assets (whether existing on the Issue Date or arising in the future); provided , that (1) recourse to the Issuer or any Restricted Subsidiary (other than the Special Purpose Securitization Subsidiaries) in connection with such transactions shall be limited to Standard Securitization Undertakings; (2) no property or assets of the Issuer or any other Restricted Subsidiary of the Issuer (other than a Special Purpose Securitization Subsidiary) shall be subject to such Permitted Securitization Financing other than pursuant to Standard Securitization Undertakings; (3) any material contract, agreement, arrangement or understanding with the Issuer or any Restricted Subsidiary of the Issuer included in the Permitted Securitization Documents with respect to such Permitted Securitization Financing shall be on terms which the Issuer reasonably believes to be not materially less favorable to the Issuer or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Issuer; and (4) with respect to any Permitted Securitization Financing entered into after the Issue Date, the Board of Directors of the Issuer shall have determined in good faith that such Permitted Securitization Financing (including financing terms, advance rates, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to the Issuer and the Special Purpose Securitization Subsidiaries involved in such Permitted Securitization Financing. For the avoidance of doubt, the Existing Securitization Financings as in effect on the Issue Date shall be Permitted Securitization Financings.

Person ” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

 

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Preferred Stock ” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.

Qualified CFC Holding Company ” shall mean a Wholly Owned Subsidiary of the Issuer that is a Delaware limited liability company that is treated as a disregarded entity for U.S. federal income tax purposes, the primary asset of which consists of Equity Interests in either (i) one or more Foreign Subsidiaries or (ii) a Delaware limited liability company the primary asset of which consists of Equity Interests in one or more Foreign Subsidiaries.

Qualified Exchange ” means the NASDAQ Global Select Market, the NASDAQ Global Market or the New York Stock Exchange or any successor exchange to the foregoing.

Qualified IPO ” means an underwritten public offering of the Equity Interests of the Issuer which generates cash proceeds of at least $250.0 million.

Qualified Public Offering ” means an underwritten public offering of Holdings Class A Common Stock by Holdings or any selling stockholders pursuant to an effective registration statement filed by Holdings with the SEC (other than (a) a registration relating solely to an employee benefit plan or employee stock plan, a dividend reinvestment plan, or a merger or a consolidation, (b) a registration incidental to an issuance of securities under Rule 144A, (c) a registration on Form S-4 or any successor form, or (d) a registration on Form S-8 or any successor form) under the Securities Act, pursuant to which the aggregate offering price of the Holdings Class A Common Stock (by Holdings and/or selling stockholders) sold in such offering (together with the aggregate offering prices from any prior such offerings) is at least $200 million and the listing of Holdings Class A Common Stock on a Qualified Exchange.

Rating Agency ” means (1) each of Moody’s and S&P and (2) if Moody’s or S&P ceases to rate the Notes for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(f) under the Exchange Act selected by the Issuer or any direct or indirect parent of the Issuer as a replacement agency for Moody’s or S&P, as the case may be.

Record Date ” for the interest payable on any applicable Interest Payment Date means February 1 or August 1 (whether or not a Business Day) next preceding such Interest Payment Date.

Restricted Cash ” means cash and Cash Equivalents held by Restricted Subsidiaries that is contractually restricted from being distributed to the Issuer or not available for general corporate purposes, except for such restrictions that are contained in agreements governing Indebtedness permitted under this Indenture and that is secured by such cash or Cash Equivalents.

Restricted Investment ” means an Investment other than a Permitted Investment.

Restricted Subsidiary ” means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person; provided that upon an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of “Restricted Subsidiary” ( provided it continues to be a Subsidiary of such Person).

 

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Unless otherwise indicated in this Indenture, all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of the Issuer.

S&P ” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., or any successor to the rating agency business thereof.

Sale/Leaseback Transaction ” means an arrangement relating to property now owned or hereafter acquired by the Issuer or a Restricted Subsidiary whereby the Issuer or a Restricted Subsidiary transfers such property to a Person and the Issuer or such Restricted Subsidiary leases it from such Person, other than leases between the Issuer and a Restricted Subsidiary or between Restricted Subsidiaries.

SEC ” means the Securities and Exchange Commission.

Second Priority Lien Obligations ” means any Obligations that constitute “Second Priority Obligations” as defined in the Existing Intercreditor Agreement.

Secured Indebtedness ” means any Indebtedness secured by a Lien.

Secured Indebtedness Leverage Ratio ” has the meaning given to the term “Senior Secured Leverage Ratio” in the Credit Agreement (described in clause (i) of the definition thereof) as in effect on the Issue Date (without giving effect to Section 2(j) of the Senior Credit Facility Amendment).

For purposes of calculating the Secured Indebtedness Leverage Ratio under this Indenture, Indebtedness under any of the Notes, the Note Guarantees and any other Pari Passu Secured Indebtedness or Junior Lien Collateral Indebtedness shall not be included.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Securitization Assets ” means rights to receive payments and funds under relocation contracts and related contracts, homes held for resale, receivables relating to mortgage payments, equity payments and mortgage payoffs, other related receivables, beneficial interests in such assets and assets relating thereto and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving receivables and similar assets, made subject to a Permitted Securitization Financing, in each case related to the relocation services business.

Securitization Fees ” means distributions or payments made directly or by means of discounts with respect to any participation interests issued or sold in connection with, and all other fees paid to a Person other than the Issuer or any Restricted Subsidiary in connection with any Permitted Securitization Financing.

Securitization Repurchase Obligation ” means any obligation of a seller of Securitization Assets in a Permitted Securitization Financing to repurchase Securitization Assets as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a Securitization Asset or portion thereof becoming subject to any asserted defense,

 

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dispute, off set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

Senior Credit Facility Amendment ” means the First Amendment, dated as of January 26, 2011, to the Credit Agreement in effect on the Issue Date.

Senior Pari Passu Indebtedness ” means:

(1) with respect to the Issuer, the Notes and any Indebtedness that ranks pari passu in right of payment to the Notes;

(2) with respect to Intermediate Holdings, its Intermediate Holdings Guarantee and any Indebtedness that ranks pari passu in right of payment to the Intermediate Holdings’ Guarantee; and

(3) with respect to any Note Guarantor, its Note Guarantee and any Indebtedness that ranks pari passu in right of payment to such Note Guarantor’s Note Guarantee.

Senior Unsecured Pari Passu Indebtedness ” means:

(1) with respect to the Issuer, any Indebtedness that ranks pari passu in right of payment to the Notes but is unsecured;

(2) with respect to Intermediate Holdings, any Indebtedness that ranks pari passu in right of payment to its Intermediate Holdings Guarantee but is unsecured; and

(3) with respect to any Note Guarantor, any Indebtedness that ranks pari passu in right of payment to such Note Guarantor’s Note Guarantee but is unsecured.

Separation and Distribution Agreement ” means the Separation and Distribution Agreement by and among Cendant, the Issuer, Travelport Inc. and Wyndham Worldwide Corporation, dated as of July 27, 2006.

Significant Subsidiary ” means any Restricted Subsidiary that would be a “Significant Subsidiary” of the Issuer within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC, as such Regulation is in effect on the Issue Date.

Similar Business ” means a business, the majority of whose revenues are derived from the activities of the Issuer and its Restricted Subsidiaries as of the Issue Date or any business or activity that is reasonably similar or complementary to any business conducted or proposed to be conducted by the Issuer and the Restricted Subsidiaries as of the Issue Date or a reasonable extension, development or expansion thereof or ancillary thereto.

Special Purpose Securitization Subsidiary ” means any Restricted Subsidiary (x) party as of the Issue Date to any Existing Securitization Document or (y) (1) to which the Issuer or a Subsidiary of the Issuer transfers or otherwise conveys Securitization Assets, (2) which engages in no activities other than in connection with the receipt, management, transfer and

 

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financing of those Securitization Assets and activities incidental or related thereto, (3) none of the obligations of which are guaranteed by the Issuer or any Subsidiary of the Issuer (other than another Special Purpose Securitization Subsidiary) other than pursuant to Standard Securitization Undertakings, and (4) with respect to which neither the Issuer nor any Subsidiary of the Issuer has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.

Sponsors ” means (i) (x) one or more investment funds controlled by Apollo Management, L.P. and (y) Apollo Management, L.P. and its Affiliates (collectively, the “Apollo Sponsors”) and (ii) any Person that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) with any Apollo Sponsors; provided that in the case of clause (ii), any Apollo Sponsor (x) owns a majority of the voting power of such group and (y) controls a majority of the Board of Directors of the Issuer.

Standard Securitization Undertakings ” means representations, warranties (and any related repurchase obligations), servicer obligations, obligations to transfer Securitization Assets, guarantees of performance and payments (other than payments of the obligations backed by the Securitization Assets or obligations of Special Purpose Securitization Subsidiaries), and covenants and indemnities entered into by the Issuer or any Subsidiary of the Issuer of a type that the Board of Directors of the Issuer has determined in good faith to be reasonably customary in securitizations and/or are reasonably similar to those in the Existing Securitization Financings.

Stated Maturity ” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

Subordinated Indebtedness ” means (a) with respect to the Issuer, any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the Notes, (b) with respect to Intermediate Holdings, any Indebtedness of Intermediate Holdings which is by its terms subordinated in right of payment to the Intermediate Holdings Guarantee and (c) with respect to any Note Guarantor, any Indebtedness of such Note Guarantor which is by its terms subordinated in right of payment to its Note Guarantee.

Subsidiary ” means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total ordinary voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof (or persons performing similar functions) is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company or similar entity of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether

 

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in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

Tax Distributions ” means any distributions described in clause (12) of Section 4.07(b).

Title Resource Group ” means Title Resource Group LLC (formerly known as Cendant Settlement Services Group LLC), a Delaware limited liability company, and any successor thereto.

Total Assets ” means the total consolidated assets of the Issuer and the Restricted Subsidiaries, as shown on the most recent balance sheet of the Issuer.

Treasury Rate ” means, as of the applicable redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to such redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to February 15, 2015; provided , however , that if the period from such redemption date to February 15, 2015 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

Trust Officer ” means:

(1) any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject, and

(2) who shall have direct responsibility for the administration of this Indenture.

Trustee ” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

U.K. Documents ” means the letter agreement, dated August 12, 2010, by and between Cartus Financing Limited and Lloyds TSB Bank plc and the letter agreement, dated August 13, 2010, by and between Cartus Financing Limited and Lloyds TSB Bank plc, and each other agreement or other document contemplated by or entered into in connection with and/or in replacement of the foregoing, each as amended, restated, refinanced, modified or supplemented on or prior to the Issue Date.

Uniform Commercial Code ” means the Uniform Commercial Code as in effect from time to time in any applicable jurisdiction.

 

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Unrestricted Subsidiary ” means:

(1) any Subsidiary of the Issuer that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of such Person in the manner provided below; and

(2) any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors of the Issuer may designate any Subsidiary of the Issuer (including any newly acquired or newly formed Subsidiary of the Issuer) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, the Issuer or any other Subsidiary of the Issuer that is not a Subsidiary of the Subsidiary to be so designated; provided, however , that the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of the Issuer or any of the Restricted Subsidiaries; provided , further, however, that either:

(a) the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or

(b) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.07.

The Board of Directors of the Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however , that immediately after giving effect to such designation:

(x) (1) the Issuer could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described under Section 4.09 or (2) the Fixed Charge Coverage Ratio for the Issuer and the Restricted Subsidiaries would be greater than such ratio for the Issuer and the Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and

(y) no Event of Default shall have occurred and be continuing.

Any such designation by the Board of Directors of the Issuer shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors of the Issuer giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing provisions.

Unsecured Notes ” means the Extended Maturity Notes and the Original Notes.

Unsecured Note Guarantees ” means the Extended Maturity Notes Guarantees and the Original Notes Guarantees.

Unsecured Notes Indentures ” means the Extended Maturity Notes Indentures and the Original Indentures.

 

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Voting Stock ” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

Weighted Average Life to Maturity ” means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years (calculated to the nearest one-twelfth) from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.

Wholly Owned Restricted Subsidiary ” is any Wholly Owned Subsidiary that is a Restricted Subsidiary.

Wholly Owned Subsidiary ” of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying. shares or shares required to be held by foreign nationals) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.

Section 1.02 Other Definitions .

 

Term

  

Defined in Section

“Agent Members”

   2.1(c) of Appendix A

“Affiliate Transaction”

   4.11(a)

“Applicable Procedures”

   1.1(a) of Appendix A

“ARF”

   10.07(b)

“ARSC”

   10.07(a)

“Asset Sale Offer”

   4.10(b)

“Authentication Order”

   2.02

“Automatic Exchange”

   2.3(i) of Appendix A

“Automatic Exchange Date”

   2.3(i) of Appendix A

“Automatic Exchange Notice”

   2.3(i) of Appendix A

“Automatic Exchange Notice Date”

   2.3(i) of Appendix A

“Cartus”

   10.07(a)

“CERCLA”

   14.11

“CFC”

   10.07(a)

“Change of Control Offer”

   4.14(b)

“Change of Control Payment”

   4.14(a)

“Change of Control Payment Date”

   4.14(b)(3)

“Clearstream”

   1.1(a) of Appendix A

“Covenant Defeasance”

   8.03

“DTC”

   2.03

“Euroclear”

   1.1(a) of Appendix A

“Event of Default”

   6.01

“Excess Proceeds”

   4.10

“Global Note”

   2.1(b) of Appendix A

“Holdings Guarantee Blockage Notice”

   12.03

 

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Term

  

Defined in Section

“Holdings Guarantee Payment Blockage Period”

   12.03

“Holdings Non-Payment Default”

   12.03

“Holdings Payment Default”

   12.03

“Holdings Permitted Junior Securities”

   12.02

“IAI”

   1.1(a) of Appendix A

“IAI Global Note”

   2.1(b) of Appendix A

“Indenture Trustee”

   10.07(b)(i)

“Legal Defeasance”

   8.02

“Note Register”

   2.03

“Offer Amount”

   3.09(b)

“Offer Period”

   3.09(b)

“Paying Agent”

   2.03

“pay its Holdings Guarantee”

   12.03

“Pool Assets”

   10.07(b)(ii)

“Premises”

   14.06

“Purchase Agreement”

   1.01; Definition of
Apple Ridge
Documents

“Purchase Date”

   3.09(b)

“QIB”

   1.1(a) of Appendix A

“Receivables Purchase Agreement”

   1.01; Definition of
Apple Ridge
Documents

“Refinancing Indebtedness”

   4.09(b)(14)

“Refunding Capital Stock”

   4.07(b)(2)

“Registrar”

   2.03

“Regulation S”

   1.1(a) of Appendix A

“Regulation S Global Note”

   2.1(b) of Appendix A

“Regulation S Notes”

   1.1(a) of Appendix A

“Regulation S Permanent Global Note”

   2.1(b) of Appendix A

“Regulation S Temporary Global Note”

   2.1(b) of Appendix A

“Restricted Note”

   2.3(i) of Appendix A

“Restricted Payments”

   4.07(a)

“Restricted Period”

   1.1(a) of Appendix A

“Retired Capital Stock”

   4.07(b)(2)

“Reversion Date”

   4.17(b)

“Rule 501”

   1.1(a) of Appendix A

“Rule 144”

   1.1(a) of Appendix A

“Rule 144A”

   1.1(a) of Appendix A

“Rule 144A Global Note”

   2.1(b) of Appendix A

“Rule 144A Notes”

   1.1(a) of Appendix A

“Rule 904”

   1.1(a) of Appendix A

“Specified Merger/Transfer Transaction”

   5.01(a)

“Successor Company”

   5.01(a)(1)

“Successor Note Guarantor”

   5.01(b)(1)

 

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Term

  

Defined in Section

“Suspended Covenants”

   4.17(a)(2)

“Suspension Date”

   4.17(a)

“Suspension Period”

   4.17(b)

“Transfer”

   5.01(d)

“Transfer and Servicing Agreement”

   1.01; Definition of
Apple Ridge
Documents

“Unrestricted Note”

   2.3(i) of Appendix A

Section 1.03 [Reserved] .

Section 1.04 Rules of Construction .

Unless the context otherwise requires:

(i) a term has the meaning assigned to it;

(ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(iii) “or” is not exclusive;

(iv) words in the singular include the plural, and in the plural include the singular;

(v) “will” shall be interpreted to express a command;

(vi) provisions apply to successive events and transactions;

(vii) references to sections of, or rules under, the Securities Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

(viii) unless the context otherwise requires, any reference to an “Article,” “Section” or “clause” refers to an Article, Section or clause, as the case may be, of this Indenture;

(ix) (1) unsecured Indebtedness shall not be deemed to be subordinated or junior to Secured Indebtedness merely because it is unsecured, (2) Senior Indebtedness shall not be deemed to be subordinated or junior to any other Senior Indebtedness merely because it has a junior priority with respect to the same collateral and (3) Indebtedness that is not guaranteed shall not be deemed to be subordinated or junior to Indebtedness that is guaranteed merely because of such guarantee; and

 

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(x) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not any particular Article, Section, clause or other subdivision.

Section 1.05 Acts of Holders .

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Proof of execution of any such instrument or of a writing appointing any such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section 1.05.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

(c) The ownership of Notes shall be proved by the Note Register.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

(e) The Issuer may set a record date for purposes of determining the identity of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or take any other act, or to vote or consent to any action by vote or consent authorized or permitted to be given or taken by Holders. Unless otherwise specified, if not set by the Issuer prior to the first solicitation of a Holder made by any Person in respect of any such action, or in the case of any such vote, prior to such vote, any such record date shall be the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee prior to such solicitation.

(f) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do

 

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so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each such different part.

(g) Without limiting the generality of the foregoing, a Holder, including DTC that is the Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and DTC that is the Holder of a Global Note may provide its proxy or proxies to the beneficial owners of interests in any such Global Note through such depositary’s standing instructions and customary practices.

(h) The Issuer may fix a record date for the purpose of determining the Persons who are beneficial owners of interests in any Global Note held by DTC entitled under the procedures of such depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other action shall be valid or effective if made, given or taken more than 90 days after such record date.

ARTICLE 2

THE NOTES

Section 2.01 Form and Dating; Terms .

(a) General . Provisions relating to the Notes are set forth in Appendix A , which is hereby incorporated in and expressly made a part of this Indenture. The (a) Initial Notes and the Trustee’s certificate of authentication and (b) any Additional Notes (if issued as Transfer Restricted Notes) and the Trustee’s certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuer, Holdings, Intermediate Holdings or any Note Guarantor is subject, if any, or usage ( provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Note shall be dated the date of its authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

(b) Terms . The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited.

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Issuer, Holdings, Intermediate Holdings, the Note Guarantors, the Trustee and the Collateral Agent, by their execution and delivery of this

 

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Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

Additional Notes ranking pari passu with the Initial Notes may be created and issued from time to time by the Issuer without notice to or consent of the Holders and shall be consolidated with and form a single class with the Initial Notes and shall have the same terms as to status, redemption or otherwise as the Initial Notes; provided that the Issuer’s ability to issue Additional Notes shall be subject to the Issuer’s compliance with Section 4.09 hereof. Any Additional Notes shall be issued with the benefit of an indenture supplemental to this Indenture.

Section 2.02 Execution and Authentication .

At least one Officer shall execute the Notes on behalf of the Issuer by manual or facsimile signature.

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid.

A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated substantially in the form of Exhibit A attached hereto, as the case may be, by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been duly authenticated and delivered under this Indenture.

On the Issue Date, the Trustee shall, upon receipt of an Issuer Order (an “ Authentication Order ”), authenticate and deliver the Initial Notes. In addition, at any time, from time to time, the Trustee shall upon an Authentication Order authenticate and deliver any Additional Notes for an aggregate principal amount specified in such Authentication Order for such Additional Notes issued hereunder.

The Trustee shall not be required to authenticate any Additional Notes, nor will it be liable for its refusal to authenticate any Additional Notes, if the authentication of such Additional Notes will affect the Trustee’s own rights, duties or immunities under the Notes and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee or if the Trustee, being advised by counsel, determines that such action may not lawfully be taken or may expose the Trustee to personal liability to existing Holders or others.

The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Issuer.

Section 2.03 Registrar and Paying Agent .

The Issuer shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“ Registrar ”) and an office or agency where Notes may

 

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be presented for payment (“ Paying Agent ”). The Registrar shall keep a register of the Notes (“ Note Register ”) and of their transfer and exchange. The Issuer may appoint one or more co-registrars and one or more additional paying agents. The term “ Registrar ” includes any co-registrar, and the term “ Paying Agent ” includes any additional paying agent. The Issuer may change any Paying Agent or Registrar without prior notice to any Holder. The Issuer shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Issuer or any of its Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

The Issuer initially appoints The Depository Trust Company (“ DTC ”) to act as Depositary with respect to the Global Notes.

The Issuer initially appoints the Trustee to act as the Paying Agent and Registrar for the Notes and to act as Custodian with respect to the Global Notes.

Section 2.04 Paying Agent to Hold Money in Trust .

The Issuer shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, or interest on the Notes, and will notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary of the Issuer) shall have no further liability for the money. If the Issuer or a Subsidiary of the Issuer acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee shall serve as Paying Agent for the Notes.

Section 2.05 Holder Lists .

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders. If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least two Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes.

Section 2.06 Transfer and Exchange .

(a) The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with Appendix A .

(b) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

 

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(c) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Holders shall be required to pay any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.07, 3.09, 4.10, 4.14 and 9.05 hereof).

(d) Neither the Registrar nor the Issuer shall be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

(e) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

(f) The Issuer shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between a Record Date and the next succeeding Interest Payment Date.

(g) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.

(h) Upon surrender for registration of transfer of any Note at the office or agency of the Issuer designated pursuant to Section 4.02 hereof, the Issuer shall execute, and the Trustee shall authenticate and mail, in the name of the designated transferee or transferees, one or more replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.

(i) At the option of the Holder, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and mail, the replacement Global Notes and Definitive Notes which the Holder making the exchange is entitled to in accordance with the provisions of Section 2.02 hereof.

(j) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

 

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Section 2.07 Replacement Notes .

If any mutilated Note is surrendered to the Trustee, the Registrar or the Issuer and the Trustee receives evidence to its satisfaction of the ownership and destruction, loss or theft of any Note, the Issuer shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Issuer, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuer and the Trustee may charge for their expenses in replacing a Note.

Every replacement Note is a contractual obligation of the Issuer and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

Section 2.08 Outstanding Notes .

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Note.

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.

If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

If the Paying Agent (other than the Issuer, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.

Section 2.09 Treasury Notes .

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer, or by any Affiliate of the Issuer, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Trust Officer of the Trustee actually knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right to deliver any such direction, waiver or consent with respect to the Notes and that the pledgee is not the Issuer or any obligor upon the Notes or any Affiliate of the Issuer or of such other obligor.

 

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Section 2.10 Temporary Notes .

Until certificates representing Notes are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Issuer considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes.

Holders and beneficial holders, as the case may be, of temporary Notes shall be entitled to all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this Indenture.

Section 2.11 Cancellation .

The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee or, at the direction of the Trustee, the Registrar or the Paying Agent and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy cancelled Notes in accordance with its customary procedures (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all cancelled Notes shall upon the written request of the Issuer be delivered to the Issuer. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.

Section 2.12 Defaulted Interest .

If the Issuer defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Issuer shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such defaulted interest as provided in this Section 2.12. The Trustee shall fix or cause to be fixed each such special record date and payment date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. The Trustee shall promptly notify the Issuer of such special record date. At least 15 days before the special record date, the Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) shall mail or cause to be mailed, first-class postage prepaid, to each Holder a notice at his or her address as it appears in the Note Register that states the special record date, the related payment date and the amount of such interest to be paid.

 

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Subject to the foregoing provisions of this Section 2.12 and for greater certainty, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.

Section 2.13 CUSIP Numbers .

The Issuer in issuing the Notes may use CUSIP numbers (if then generally in use) and, if so, the Trustee shall use CUSIP numbers in notices of redemption as a convenience to Holders; provided , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will as promptly as practicable notify the Trustee in writing of any change in the CUSIP numbers.

Section 2.14 Calculation of Principal Amount of Notes .

The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes at such date of determination. With respect to any matter requiring consent, waiver, approval or other action of the Holders of a specified percentage of the principal amount of all the Notes, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes, the Holders of which have so consented, by (b) the aggregate principal amount, as of such date of determination, of the Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.08 and Section 2.09 of this Indenture. Any such calculation made pursuant to this Section 2.14 shall be made by the Issuer and delivered to the Trustee pursuant to an Officer’s Certificate.

ARTICLE 3

REDEMPTION

Section 3.01 Notices to Trustee .

If the Issuer elects to redeem Notes pursuant to Section 3.07 hereof, it shall furnish to the Trustee, at least 5 Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to Section 3.03 hereof but not more than 70 days before a redemption date, an Officer’s Certificate setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of the Notes to be redeemed and (iv) the redemption price.

Section 3.02 Selection of Notes to Be Redeemed or Purchased .

If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee shall select the Notes to be redeemed or purchased (a) if the Notes are listed on any national securities exchange, in compliance with the requirements of the

 

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principal national securities exchange on which the Notes are listed or (b) on a pro rata basis or, to the extent that selection on a pro rata basis is not practicable, by lot or by such other method the Trustee shall deem fair and appropriate in accordance with the procedures of DTC, and in each case, such manner as complies with applicable legal requirements. In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption or purchase.

The Trustee shall promptly notify the Issuer in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected shall be in amounts of $2,000 or whole multiples of $1,000 in excess thereof; no Notes of $2,000 or less shall be redeemed or purchased in part, except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1,000 in excess thereof, shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.

Section 3.03 Notice of Redemption .

Subject to Section 3.09 hereof, the Issuer shall mail or cause to be mailed by first-class mail, postage prepaid (or electronically transmit), notices of redemption at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at such Holder’s registered address or otherwise in accordance with the procedures of DTC, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 13 hereof. Except as set forth in Section 3.07 hereof, notices of redemption may not be conditional.

The notice shall identify the Notes to be redeemed and shall state:

(i) the redemption date;

(ii) the redemption price;

(iii) if any Note is to be redeemed in part only, the portion of the principal amount of that Note that is to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion of the original Note representing the same indebtedness to the extent not redeemed will be issued in the name of the Holder of the Notes upon cancellation of the original Note;

(iv) the name and address of the Paying Agent;

(v) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

 

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(vi) that, unless the Issuer defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;

(vii) the paragraph or subparagraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;

(viii) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes; and

(ix) if in connection with a redemption pursuant to Section 3.07(b) hereof, any condition to such redemption.

At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at the Issuer’s expense; provided that the Issuer shall have delivered to the Trustee, at least 5 Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to this Section 3.03 (unless a shorter notice shall be agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

Section 3.04 Effect of Notice of Redemption .

Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price (except as provided for in Section 3.07(b)). The notice, if mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note.

Section 3.05 Deposit of Redemption or Purchase Price .

Prior to 10:00 a.m. (New York City time) on the redemption or purchase date, the Issuer shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued and unpaid interest on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest on, all Notes to be redeemed or purchased.

If the Issuer complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest to the redemption or purchase date shall be paid to the Person in whose name such Note was registered at the close of business on such Record Date. If any Note called for redemption or purchase shall not be so paid upon surrender for redemption or purchase because of the failure of the Issuer to comply with the preceding paragraph, interest shall be paid on the unpaid

 

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principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest accrued to the redemption or purchase date not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

Section 3.06 Notes Redeemed or Purchased in Par t.

Upon surrender of a Note that is redeemed or purchased in part, the Issuer shall issue and the Trustee shall authenticate for the Holder at the expense of the Issuer a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered representing the same indebtedness to the extent not redeemed or purchased; provided that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. It is understood that, notwithstanding anything in this Indenture to the contrary, only an Authentication Order and not an Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate such new Note.

Section 3.07 Optional Redemption .

(a) At any time and from time to time prior to February 15, 2015, the Issuer may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to the registered address of each Holder (or electronically transmitted) or otherwise in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest to the date of redemption, (subject to the rights of Holders of Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date).

(b) At any time and from time to time on or prior to February 15, 2014 the Issuer may redeem in the aggregate up to 35% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent of the Issuer, in each case to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer from it, at a redemption price (expressed as a percentage of the principal amount thereof) of 107.875%, plus accrued and unpaid interest to the date of redemption (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided , however , that at least 50% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) remain outstanding after each such redemption; provided , further , that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed (or electronically transmitted) to each Holder of Notes being redeemed and otherwise in accordance with the procedures set forth in this Indenture. Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

(c) Except pursuant to clauses (a) or (b) of this Section 3.07, the Notes will not be redeemable at the Issuer’s option prior to February 15, 2015.

 

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(d) On or after February 15, 2015, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time, upon notice pursuant to Section 3.03 hereof at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon to the applicable date of redemption, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve month period beginning on February 15 of each of the years indicated below:

 

Period

   Redemption
price
 

2015

     103.938

2016

     101.969

2017 and thereafter

     100.000
        

(e) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

Section 3.08 Mandatory Redemption .

The Issuer shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes.

Section 3.09 Offers to Repurchase by Application of Excess Proceeds .

(a) In the event that, pursuant to Section 4.10 hereof, the Issuer shall be required to commence an Asset Sale Offer, it shall follow the procedures specified below.

(b) The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “ Offer Period ”). No later than five Business Days after the termination of the Offer Period (the “ Purchase Date ”), the Issuer shall apply all Excess Proceeds (the “ Offer Amount ”) to the purchase of Notes and, if required, Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable (on a pro rata basis, if applicable), or, if less than the Offer Amount has been tendered, all Notes and Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable, tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.

(c) If the Purchase Date is on or after a Record Date and on or before the related Interest Payment Date, any accrued and unpaid interest, up to but excluding the Purchase Date, shall be paid to the Person in whose name a Note is registered at the close of business on such Record Date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

(d) The Issuer shall send, by first-class mail (or electronic transmission) at least 30 but not more than 60 days before the Purchase Date, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to

 

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enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders and, at the option of the Issuer, to holders of Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable. The notice, which shall govern the terms of the Asset Sale Offer, shall state:

(1) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open;

(2) the Offer Amount, the purchase price and the Purchase Date;

(3) that any Note not tendered or accepted for payment shall continue to accrue interest;

(4) that, unless the Issuer defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Purchase Date;

(5) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in amounts of $2,000 or in integral multiples of $1,000 in excess thereof only;

(6) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Note completed, or transfer by book-entry transfer, to the Issuer, the Depositary, if appointed by the Issuer, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

(7) that Holders shall be entitled to withdraw their election if the Issuer, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

(8) that, if the aggregate principal amount of Notes and Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable, surrendered by the holders thereof exceeds the Offer Amount, the Trustee shall select the Notes and such Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable, to be purchased in compliance with the requirements of the principal national securities exchange, if any, on which such Notes are listed or, if such Notes are not so listed, on a pro rata basis, by lot or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies with applicable legal requirements) on a pro rata basis based on the accreted value or principal amount of the Notes or such Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable, tendered (with such adjustments as may be deemed appropriate by the Trustee so that only Notes

 

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in denominations of $2,000 or in integral multiples of $1,000 in excess thereof, shall be purchased); and

(9) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer) representing the same indebtedness to the extent not repurchased.

(e) On or before the Purchase Date, the Issuer shall, to the extent lawful, (1) accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof validly tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered and (2) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof so tendered.

(f) The Issuer, the Depositary or the Paying Agent, as the case may be, shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes properly tendered by such Holder and accepted by the Issuer for purchase, and the Issuer shall promptly issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and mail or deliver (or cause to be transferred by book-entry) such new Note to such Holder (it being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate and mail or deliver such new Note) in a principal amount equal to any unpurchased portion of the Note surrendered representing the same indebtedness to the extent not repurchased; provided , that each such new Note shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. Any Note not so accepted shall be promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer shall notify the Holders of the results of the Asset Sale Offer on or as soon as practicable after the Purchase Date.

Other than as specifically provided in this Section 3.09 or Section 4.10 hereof, any purchase pursuant to this Section 3.09 shall be made pursuant to the applicable provisions of Sections 3.01 through 3.06 hereof.

ARTICLE 4

COVENANTS

Section 4.01 Payment of Notes .

The Issuer shall pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Issuer or a Wholly Owned Subsidiary of the Issuer, holds as of noon Eastern Time on the due date money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.

The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest

 

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rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful.

Section 4.02 Maintenance of Office or Agency .

The Issuer shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

Subject to the preceding paragraph, the Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency for such purposes. The Issuer shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Issuer hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Issuer in accordance with Section 2.03 hereof.

Section 4.03 Reports and Other Information .

(a) Notwithstanding that the Issuer may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Issuer shall file with the SEC (and provide the Trustee and Holders with copies thereof by posting such information on its primary website),

(1) as soon as available and in any event on or before the date on which such reports would be required to be filed with the SEC (if the Issuer were a non-accelerated filer subject to Section 13 or 15(d) of the Exchange Act), annual reports on Form 10-K (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form),

(2) as soon as available and in any event on or before the date on which such reports would be required to be filed with the SEC (if the Issuer were a non-accelerated filer subject to Section 13 or 15(d) of the Exchange Act), reports on Form 10-Q (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form),

 

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(3) promptly from time to time after the occurrence of an event required to be therein reported (and in any event within the time period specified for filing current reports on Form 8-K by the SEC), reports on Form 8-K (or any successor or comparable form), and

(4) any other information, documents and other reports which the Issuer would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;

in each case in a manner that complies in all material respects with the requirements specified in such form; provided, however , that financial information required by Rule 3-16 (or any successor thereto) of Regulation S-X shall not be required. Notwithstanding the foregoing, the Issuer will be deemed to have furnished such reports referred to above to the Trustee and the Holders if the Issuer has filed such reports with the SEC via the EDGAR filing system and such reports are publicly available.

(b) If at any time any direct or indirect parent of the Issuer (x) is or becomes a guarantor of the Notes (there being no obligation of any parent to do so), (y) holds no material assets other than cash, Cash Equivalents and the Capital Stock of the Issuer or of any direct or indirect parent corporation of the Issuer (and performs the related incidental activities associated with such ownership) and (z) complies with the requirements of Rule 3-10 of Regulation S-X promulgated by the SEC (or any successor provision), the reports, information and other documents required to be filed and furnished to Holders of the Notes pursuant to this Section 4.03 may, at the option of the Issuer, be filed or furnished by and be those of such direct and indirect parent of the Issuer rather than the Issuer.

(c) The Issuer will make such information available to prospective investors upon request. In addition, the Issuer has agreed that, for so long as any Notes remain outstanding during any period when it is not subject to Section 13 or 15(d) of the Exchange Act, it will furnish to the Holders of the Notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(d) If the Issuer has designated any of its Subsidiaries as Unrestricted Subsidiaries and such Unrestricted Subsidiaries, either individually or collectively, would otherwise have been a Significant Subsidiary, then the quarterly and annual financial information required by this Section 4.03 shall include a reasonably detailed unaudited discussion (as determined in good faith by senior management of the Issuer) of the financial condition and results of operations of the Issuer and the Restricted Subsidiaries of the Issuer separate from the financial condition and results of operations of the Unrestricted Subsidiaries.

(e) Notwithstanding anything herein to the contrary, the Issuer will not be deemed to have failed to comply with any of its agreements under this Section 4.03 for purposes of Section 6.01(a)(4) until 120 days after the date any report hereunder is required to be filed with the SEC (or otherwise made available to Holders or the Trustee) pursuant to this Section 4.03.

 

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Section 4.04 Compliance Certificate .

(a) The Issuer shall deliver to the Trustee, within 120 days after the end of each fiscal year ending after the Issue Date, a certificate from the principal executive officer, principal financial officer or principal accounting officer stating, as to such Officer signing such certificate, that to the best of his or her knowledge, the Issuer has complied with each and every condition and covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions, covenants and conditions of this Indenture (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action the Issuer is taking or proposes to take with respect thereto).

Section 4.05 Taxes .

The Issuer shall pay, and shall cause each of its Restricted Subsidiaries to pay, prior to delinquency, all material taxes, assessments and governmental levies except such as are contested in good faith and by appropriate negotiations or proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.

Section 4.06 Stay, Extension and Usury Laws .

The Issuer, Holdings, Intermediate Holdings and each of the Note Guarantors covenant (to the extent that they may lawfully do so) that they shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer, Holdings, Intermediate Holdings and each of the Note Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant that they shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee or the Collateral Agent, but shall suffer and permit the execution of every such power as though no such law has been enacted.

Section 4.07 Limitation on Restricted Payments .

(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly:

(I) declare or pay any dividend or make any distribution on account of the Issuer’s or any of the Restricted Subsidiaries’ Equity Interests, including any payment made in connection with any merger, amalgamation or consolidation involving the Issuer other than:

(A) dividends or distributions by the Issuer payable solely in Equity Interests (other than Disqualified Stock) of the Issuer; or

(B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, the Issuer or a Restricted Subsidiary receives at least its pro

 

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rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities;

(II) purchase or otherwise acquire or retire for value any Equity Interests of the Issuer or any direct or indirect parent of the Issuer, including in connection with any merger or consolidation;

(III) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of the Issuer or any Note Guarantor other than the payment, redemption, repurchase, defeasance, acquisition or retirement of:

(A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement; and

(B) Indebtedness permitted under clauses (7) and (9) of Section 4.09(b); or

(IV) make any Restricted Investment (all such payments and other actions set forth in clauses (I) through (IV) above being collectively referred to as “ Restricted Payments ”), unless, at the time of such Restricted Payment:

(A) no Default shall have occurred and be continuing or would occur as a consequence thereof;

(B) immediately after giving effect to such transaction on a pro forma basis, the Issuer could Incur $1.00 of additional Indebtedness under Section 4.09(a); and

(C) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and the Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (1), (4) (only to the extent of one-half of the amounts paid pursuant to such clause), (6), (8) and (18) of Section 4.07(b), but excluding all other Restricted Payments permitted by Section 4.07(b), is less than the amount equal to the Cumulative Credit.

(b) The foregoing provisions of Section 4.07(a) hereof shall not prohibit:

(1) the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Indenture;

(2)(a) the redemption, repurchase, retirement or other acquisition of any Equity Interests (“ Retired Capital Stock ”) or Subordinated Indebtedness of the Issuer, any direct or indirect parent of the Issuer or any Note Guarantor in exchange for, or out of the proceeds of, the substantially concurrent sale of Equity Interests of the Issuer or any

 

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direct or indirect parent of the Issuer or contributions to the equity capital of the Issuer (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of the Issuer) (collectively, including any such contributions, “ Refunding Capital Stock ”); and (b) the declaration and payment of accrued dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of the Issuer) of Refunding Capital Stock and if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6) of this Section 4.07(b) and not made pursuant to this clause (2)(b), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of any direct or indirect parent of the Issuer) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Retired Capital Stock immediately prior to such retirement;

(3) the redemption, repurchase, defeasance or other acquisition or retirement of Subordinated Indebtedness of the Issuer or any Note Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale (or as promptly as practicable after giving any requisite notice to the Holders of such Subordinated Indebtedness) of, new Indebtedness of the Issuer or a Note Guarantor that is Incurred in accordance with Section 4.09 so long as:

(i) the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable), plus any accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired plus any tender premiums, defeasance costs or other fees and expenses incurred in connection therewith),

(ii) except as permitted by the third proviso to Section 4.09(b)(14), such new Indebtedness is subordinated to the Notes or the related Note Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,

(iii) such new Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) 91 days following the maturity date of the Notes, and

(iv) such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired that were due on or after the date one year

 

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following the maturity date of any Notes then outstanding were instead due on such date one year following the maturity date of such Notes ( provided that, in the case of this subclause (d)(y), such Indebtedness does not provide for any scheduled principal payments prior to the maturity date of the Notes in excess of, or prior to, the scheduled principal payments due prior to such maturity for the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased);

(4) a Restricted Payment to pay for the redemption, repurchase, retirement or other acquisition for value of Equity Interests of the Issuer or any direct or indirect parent of the Issuer held by any future, present or former employee, director or consultant of the Issuer or any direct or indirect parent of the Issuer or any Subsidiary of the Issuer pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided, however , that the aggregate amounts paid under this clause (4) do not exceed $30.0 million in any calendar year (with unused amounts in any calendar year being permitted to be carried over for the two succeeding calendar years subject to a maximum payment (without giving effect to the following proviso) of $60.0 million in any calendar year); provided , further, however, that such amount in any calendar year may be increased by an amount not to exceed:

(i) the cash proceeds received by the Issuer or any of the Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of the Issuer or any direct or indirect parent of the Issuer (to the extent contributed to the Issuer) to members of management, directors or consultants of the Issuer and the Restricted Subsidiaries or any direct or indirect parent of the Issuer that occurs after the Issue Date; plus

(ii) the cash proceeds of key man life insurance policies received by the Issuer or any direct or indirect parent of the Issuer (to the extent contributed to the Issuer) or the Restricted Subsidiaries after the Issue Date; less

(iii) the amount of any Restricted Payments previously made pursuant to subclauses (i) and (ii) of this second proviso of clause (4);

provided that the Issuer may elect to apply all or any portion of the aggregate increase contemplated by subclauses (i) and (ii) above in any calendar year;

(5) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Issuer or any of the Restricted Subsidiaries issued or Incurred in accordance with Section 4.09;

(6)(a) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date, (b) a Restricted Payment to any direct or indirect parent of the Issuer, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent of the Issuer issued after the Issue Date and (c) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the

 

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dividends declarable and payable thereon pursuant to clause (2) of this paragraph; provided, however , that, (x) in the case of subclauses (a), (b) and (c) of this clause (6), for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or Refunding Capital Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis, the Issuer would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00 and (y) the aggregate amount of dividends declared and paid pursuant to subclauses (a) and (b) of this clause (6) does not exceed the net cash proceeds actually received by the Issuer from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date;

(7) Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (7) that are at that time outstanding, not to exceed the greater of $75.0 million and 0.625% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided , that the dollar amount of Investments made pursuant to this clause (7) may be reduced by the Fair Market Value of the proceeds received by the Issuer and/or its Restricted Subsidiaries from the subsequent sale, disposition or other transfer of such Investments (with such Fair Market Value being measured at the time of such sale, disposition or other transfer without giving effect to subsequent changes in value);

(8) the payment of dividends on the Issuer’s common stock (or a Restricted Payment to any direct or indirect parent of the Issuer to fund the payment by such direct or indirect parent of the Issuer of dividends on such entity’s common stock) of up to 6.0% per annum of the net cash proceeds received (including, without limitation, contributions to the Issuer with the proceeds of sales of common stock of any direct or indirect parent) by the Issuer from any public offering of common stock of the Issuer or any direct or indirect parent of the Issuer;

(9) Restricted Payments that are made with Excluded Contributions;

(10) other Restricted Payments in an aggregate amount taken together with all other Restricted Payments made pursuant to this clause (10) not to exceed the greater of $125.0 million and 1.00% of Total Assets at the time made; provided that the aggregate amount of Restricted Payments made pursuant to this clause (10) for Restricted Payments of the types described in clauses (I) and (II) of the definition of Restricted Payments shall not exceed $25.0 million;

(11) the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Issuer or a Restricted Subsidiary by, Unrestricted Subsidiaries;

(12) the payment of dividends or other distributions to any direct or indirect parent of the Issuer in amounts required for such parent to pay federal, state or local income taxes (as the case may be) imposed directly on such parent to the extent such income taxes are attributable to the income of the Issuer and the Restricted Subsidiaries

 

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(including, without limitation, by virtue of such parent being the common parent of a consolidated or combined tax group of which the Issuer and/or the Restricted Subsidiaries are members);

(13) the payment of any Restricted Payment, if applicable:

(i) in amounts required for any direct or indirect parent of the Issuer, if applicable, to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of the Issuer, if applicable, and general corporate overhead expenses of any direct or indirect parent of the Issuer, if applicable, in each case to the extent such fees and expenses are attributable to the ownership or operation of the Issuer, if applicable, and its Restricted Subsidiaries ( provided , that for so long as such direct or indirect parent owns no assets other than the Equity Interests in the Issuer or another direct or indirect parent of the Issuer, such fees and expenses shall be deemed for purposes of this clause (13)(a) to be so attributable to such ownership or operation);

(ii) in amounts required for any direct or indirect parent of the Issuer, if applicable, to pay interest and/or principal on Indebtedness that satisfies each of the following: (i) the proceeds of which have been contributed to the Issuer or any of the Restricted Subsidiaries and (ii) that has been guaranteed by, or is otherwise considered Indebtedness of, the Issuer Incurred in accordance with Section 4.09; and

(iii) in amounts required for any direct or indirect parent of the Issuer to pay fees and expenses, other than to Affiliates of the Issuer, related to any unsuccessful equity or debt offering of such parent;

(14) Restricted Payments owed by the Issuer, any direct or indirect parent of the Issuer or any Restricted Subsidiary to Affiliates, in each case to the extent permitted by Section 4.11; provided that payments to Affiliates due to the termination of the Management Fee Agreement or similar agreements shall be permitted by this clause (14) only to the extent such termination is attributable to an underwritten registered public offering of the common stock of the Issuer or any direct or indirect parent of the Issuer or to a Change of Control;

(15) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(16) purchases of receivables pursuant to a Securitization Repurchase Obligation in connection with a Permitted Securitization Financing and the payment or distribution of Securitization Fees;

(17) Restricted Payments by the Issuer or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock or debt

 

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securities that are convertible into, or exchangeable for, Capital Stock of any such Person;

(18) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions described under, or provisions similar to those described under Sections 4.10 and 4.14; provided that a Change of Control Offer or Asset Sale Offer, as applicable, has been made and all Notes tendered by Holders of the Notes in connection with a Change of Control or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value;

(19) cash dividends or other distributions in respect of the Issuer’s Capital Stock used to, or the making of loans to any direct or indirect parent of the Issuer in order to, fund the payment of expenses of the type and in the amount described in clauses (3) and (5) of Section 4.11(b) to the extent that such amounts are not paid directly by the Issuer or any its Subsidiaries;

(20) the redemption, repurchase, defeasance or other acquisition or retirement of Existing 12.375% Senior Subordinated Notes and the related Existing 12.375% Senior Subordinated Note Guarantees; provided that the aggregate amounts paid under this clause (20) do not exceed $50.0 million; and

(21) the redemption of the Convertible Notes and the related Convertible Notes Guarantees not owned by the Apollo Sponsors upon a Qualified Public Offering or at any time thereafter at a price equal to no greater than 90% of the principal amount thereof in accordance with the terms of the Convertible Notes Indenture; provided that to the extent the Issuer uses the proceeds of the substantially concurrent sale of Equity Interests of the Issuer or any direct or indirect parent of the Issuer or contributions to the equity capital of the Issuer to redeem the Convertible Notes not owned by the Apollo Sponsors, such redemption shall be deemed to have been made pursuant to clause 2(a) of this Section 4.07(b)

provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clause (6), (7), (10), (11) or (14) (with respect to payments owed to the Sponsors or their Affiliates as permitted by Section 4.11) of this Section 4.07(b), no Default shall have occurred and be continuing or would occur as a consequence thereof.

(c) For the avoidance of doubt, payments made after the Issue Date of the Cendant Contingent Liabilities shall not be deemed Restricted Payments.

(d) The amount of any Restricted Payment (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Issuer or such Subsidiary, as the case may be, pursuant to the Restricted Payment. Except as otherwise provided herein, the Fair Market Value of any assets or securities that are required to be valued by this Section 4.07 will be determined in good faith by senior management or the Board of Directors of the Issuer.

(e) As of the Issue Date, all of the Issuer’s Subsidiaries will be Restricted Subsidiaries. The Issuer will not permit any Unrestricted Subsidiary to become a Restricted

 

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Subsidiary except pursuant to the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and the Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of “Investments.” Such designation will only be permitted if a Restricted Payment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

(f) Notwithstanding the foregoing, the Issuer will not, and will not permit any of the Restricted Subsidiaries to, pay any cash dividend or make any cash distribution on account of the Issuer’s Equity Interests or purchase for cash or otherwise redeem, acquire or retire for cash any Equity Interests of the Issuer or any direct or indirect parent of the Issuer or guarantee any Indebtedness of an Affiliate of the Issuer for the purposes of any of the foregoing, in each case for the benefit of the Sponsors, by means of (i) the application of the Cumulative Credit in accordance with the definition thereof and Section 4.07(a), (ii) utilization of clauses (1), (7), (10) or (11) of Section 4.07(b) or (iii) utilization of clauses (9), (10) or (18) of the definition of Permitted Investments, unless in each case at the time of such payment the Consolidated Leverage Ratio of the Issuer would have been equal to or less than 6.0 to 1.0 on a pro forma basis and otherwise in compliance with this Section 4.07.

Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries .

(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

(1) (A) pay dividends or make any other distributions to the Issuer or any of the Restricted Subsidiaries (i) on its Capital Stock or (ii) with respect to any other interest or participation in, or measured by, its profits or (B) pay any Indebtedness owed to the Issuer or any of the Restricted Subsidiaries;

(2) make loans or advances to the Issuer or any of the Restricted Subsidiaries; or

(3) sell, lease or transfer any of its properties or assets to the Issuer or any of the Restricted Subsidiaries.

(b) Section 4.08(a) hereof shall not apply to encumbrances or restrictions existing under or by reason of:

(1) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Credit Agreement and the other Credit Agreement Documents, the Unsecured Notes Indentures, the Unsecured Notes and the Unsecured Note Guarantees;

(2) this Indenture, the Notes, the Note Guarantees, the Collateral Documents and the Intercreditor Agreements;

 

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(3) applicable law or any applicable rule, regulation or order;

(4) any agreement or other instrument of a Person acquired by the Issuer or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or its Subsidiaries, or the property or assets of the Person or its Subsidiaries, so acquired;

(5) contracts or agreements for the sale of assets, including restrictions with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition;

(6) Secured Indebtedness otherwise permitted to be Incurred pursuant to Sections 4.09 and 4.12 hereof that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(7) restrictions on cash or other deposits (including escrowed funds) or net worth imposed by customers and franchisees under contracts entered into in the ordinary course of business;

(8) customary provisions in joint venture agreements and other similar agreements relating solely to such joint venture entered into in the ordinary course of business;

(9) purchase money obligations and Capitalized Lease Obligations, in each case for property acquired or leased in the ordinary course of business that impose restrictions of the nature discussed in clause (3) of Section 4.08(a) above on the property so acquired or leased;

(10) customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business that impose restrictions of the type described in clause (3) of Section 4.08(a) above on the property subject to such lease;

(11) any encumbrance or restriction on a Special Purpose Securitization Subsidiary that, in the good faith judgment of senior management or the Board of Directors of the Issuer, is reasonably required in connection therewith; provided, however , that such restrictions apply only to Special Purpose Securitization Subsidiaries;

(12) other Indebtedness or Disqualified Stock of the Issuer or any of its Restricted Subsidiaries or Preferred Stock of any Non-Guarantor Subsidiary that is Incurred subsequent to the Issue Date and permitted pursuant to Section 4.09; provided that such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Issuer’s ability to make anticipated

 

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principal or interest payments on the Notes (as determined in good faith by senior management or the Board of Directors of the Issuer); or

(13) any encumbrances or restrictions of the type referred to in clauses (1), (2) and (3) of Section 4.08(a) imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (12) of this Section 4.08(b); provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of senior management or the Board of Directors of the Issuer, no more restrictive with respect to such encumbrances and other restrictions taken as a whole than those contained in the encumbrances or other restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

(c) For purposes of determining compliance with this Section 4.08, (1) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (2) the subordination of loans or advances made to the Issuer or a Restricted Subsidiary to other Indebtedness Incurred by the Issuer or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

Section 4.09 Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock .

(a) (1) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (2) the Issuer shall not permit any of the Non-Guarantor Subsidiaries to issue any shares of Preferred Stock; provided, however , that the Issuer and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Non-Guarantor Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Issuer for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided, further, that the amount of Indebtedness that may be Incurred and Disqualified Stock or Preferred Stock that may be issued in each case pursuant to the foregoing by Non-Guarantor Subsidiaries shall not exceed $300.0 million at any one time outstanding.

(b) The limitations set forth in Section 4.09(a) hereof shall not apply to:

 

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(1) the Incurrence by the Issuer or the Restricted Subsidiaries of Indebtedness under the Credit Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount at any one time outstanding, less all principal repayments of Indebtedness Incurred under this clause (1) with the Net Proceeds of Asset Sales utilized in accordance with clauses 1(a) or 1(c) of Section 4.10(b) that permanently reduces the commitments thereunder, of: (A) $4,200.0 million and (B) an additional amount such that, after giving pro forma effect to the Incurrence of such Indebtedness and the application of the net proceeds therefrom, the Secured Indebtedness Leverage Ratio would not exceed 4.25 to 1.00; provided that any refinancing Indebtedness in respect of Indebtedness Incurred under this clause (B) shall only be permitted to be Incurred under clause (14) of this Section 4.09(b);

(2) the Incurrence by the Issuer and the Note Guarantors of Indebtedness represented by the Notes (not including any additional Notes) and the Note Guarantees;

(3) Indebtedness of the Issuer and its Restricted Subsidiaries existing on the Issue Date (other than Indebtedness described in clause (1) of this Section 4.09(b)(1) (which such Section 4.09(b)(1) includes the Delayed Draw Term Loan) and Section 4.09(b)(2), but including the Unsecured Notes and the Unsecured Note Guarantees);

(4) (A) Indebtedness (including Capitalized Lease Obligations) Incurred by the Issuer or any of the Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of the Restricted Subsidiaries and Preferred Stock issued by any Non-Guarantor Subsidiaries to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) (whether through the direct purchase of property or the Capital Stock of any Person owning such property) and (B) Acquired Indebtedness, in an aggregate principal amount that, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (4), does not exceed $325.0 million;

(5) Indebtedness Incurred by the Issuer or any of the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;

 

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(6) Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or acquisition price or similar obligations, in each case Incurred in connection with the Merger Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;

(7) Indebtedness of the Issuer to a Restricted Subsidiary; provided that, other than in the case of intercompany current liabilities Incurred in the ordinary course of business in connection with the cash management operations of the Issuer and its Subsidiaries to finance working capital needs of the Subsidiaries, any such Indebtedness owed to a Non-Guarantor Subsidiary is expressly subordinated (if legally permissible) in right of payment to the obligations of the Issuer under the Notes; provided , further, that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (7);

(8) shares of Preferred Stock of a Non-Guarantor Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Non-Guarantor Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (8);

(9) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that, other than in the case of intercompany current liabilities Incurred in the ordinary course of business in connection with the cash management operations of the Issuer and its Subsidiaries to finance working capital needs of its Subsidiaries, if a Note Guarantor incurs such Indebtedness, and such Indebtedness is owed to a Non-Guarantor Subsidiary, such Indebtedness is expressly subordinated (if legally permissible) in right of payment to the Note Guarantee of such Note Guarantor; provided, further , that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (9);

(10) Hedging Obligations that are not incurred for speculative purposes and are either (A) for the purpose of fixing or hedging interest rate risk with

 

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respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; (C) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales; or (D) any combination of the foregoing;

(11) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Issuer or any Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice;

(12) Indebtedness or Disqualified Stock of the Issuer or any Restricted Subsidiary and Preferred Stock of any Non-Guarantor Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and deemed Incurred pursuant to this clause (12), does not exceed $325.0 million; provided that the aggregate principal amount or liquidation preference of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued, as the case may be, under this clause (12) by Non-Guarantor Subsidiaries shall not exceed $50.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (12) shall cease to be deemed Incurred or outstanding for purposes of this clause (12) but shall be deemed Incurred for purposes of Section 4.09(a) from and after the first date on which the Issuer, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.09(a) without reliance upon this clause (12));

(13) any guarantee by (x) the Issuer or a Note Guarantor of Indebtedness or other obligations of the Issuer or any of the Restricted Subsidiaries, (y) a Foreign Subsidiary of Indebtedness or other obligations of another Foreign Subsidiary or (z) a Non-Guarantor Subsidiary of Indebtedness or other obligations of another Non-Guarantor Subsidiary, in each case so long as the Incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of the Issuer or such Note Guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Notes (in the case of a guarantee by the Issuer) or to such Note Guarantor’s Note Guarantee (in the case of a guarantee by a Note Guarantor) substantially to the same extent as such Indebtedness is subordinated to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable;

(14) the Incurrence by the Issuer or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or the Incurrence by a Non-Guarantor Subsidiary of Preferred Stock that serves to refund, refinance or defease any

 

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Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.09(a) and clauses (1)(B), (2), (3), (4), (14), (15), (19) and (20) of this Section 4.09(b)or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “ Refinancing Indebtedness ”) prior to its respective maturity; provided , however, that such Refinancing Indebtedness:

 

  (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the maturity date of any Notes then outstanding were instead due on such date one year following the maturity date of such Notes ( provided that any Refinancing Indebtedness Incurred in reliance on this subclause (1)(y) does not provide for any scheduled principal payments prior to the maturity date of the Notes in excess of, or prior to, the scheduled principal payments due prior to such maturity for the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased);

 

  (B) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or defeased or (y) 91 days following the maturity date of the Notes;

 

  (C) to the extent such Refinancing Indebtedness refunds, refinances or defeases (i) Indebtedness junior in right of payment to the Notes or any Note Guarantee, such Refinancing Indebtedness is junior in right of payment to the Notes or such Note Guarantee at least to the same extent as the Indebtedness being refunded, refinanced or defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock, as the case may be;

 

  (D) to the extent such Refinancing Indebtedness is secured, the Lien securing such Refinancing Indebtedness has a Lien priority equal with or junior to the Liens securing the Indebtedness being refunded, refinanced or defeased;

 

  (E)

is Incurred in an aggregate amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus

 

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premiums (including tender premiums), expenses, defeasance costs and fees Incurred in connection with such refinancing;

 

  (F) shall not include (x) Indebtedness, Disqualified Stock or Preferred Stock of a Non-Guarantor Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary that is a Note Guarantor, or (y) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and

 

  (G) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (4), (19) or (20), shall be deemed to have been Incurred and to be outstanding under such clause (4), (19) or (20), as applicable, and not this clause (14) for purposes of determining amounts outstanding under such clauses (4), (19) and (20);

and provided, further , that subclauses (A) and (B) of this clause (14) shall not apply to any refunding, refinancing or defeasance of any Bank Indebtedness that is First Priority Lien Obligations to the extent refinanced or defeased with the proceeds of Bank Indebtedness; and provided, further , that subclauses (C) and (D) of this clause (14) shall not apply to any Refinancing Indebtedness that refunds, refinances or defeases any (i) Existing Senior Subordinated Notes (or any Refinancing Indebtedness Incurred in respect thereof that meets the requirements of subclause (C) of this clause (14)) and that is either (1) Senior Unsecured Pari Passu Indebtedness (in which case any subsequent Refinancing Indebtedness in respect thereof shall be unsecured) or (2) Junior Lien Collateral Indebtedness or (ii) Unsecured Notes, other than the Existing Senior Subordinated Notes, (or any Refinancing Indebtedness Incurred in respect thereof that is unsecured) and that is Junior Lien Collateral Indebtedness; provided that any subsequent Refinancing Indebtedness that refunds, refinances or defeases any Indebtedness Incurred in accordance with clauses (i) and (ii) must be Refinancing Indebtedness that meets all the requirements of subclauses (A) – (G) of this clause (14).

(15) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Issuer or any of the Restricted Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any of the Restricted Subsidiaries or merged or amalgamated with or into the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however , that after giving effect to such acquisition, merger or amalgamation and the Incurrence of such Indebtedness either:

 

  (1) the Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a); or

 

  (2) the Fixed Charge Coverage Ratio of the Issuer would be equal to or greater than immediately prior to such acquisition, merger or amalgamation;

 

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(16) [Reserved];

(17) Indebtedness (x) arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business or other cash management services in the ordinary course of business; provided , that (i) such Indebtedness (other than credit or purchase cards) is extinguished within ten Business Days of notification to the Issuer of its incurrence and (ii) such Indebtedness in respect of credit or purchase cards is extinguished within 60 days from its Incurrence and (y) in respect of cash management lines or facilities so long as the Indebtedness deemed Incurred pursuant to this clause (17)(y) does not exceed $50.0 million at any one time outstanding;

(18) Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit or bank guarantee;

(19) Indebtedness or Disqualified Stock of the Issuer or any Restricted Subsidiary and Preferred Stock of any Non-Guarantor Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference not exceeding at any time outstanding 200% of the net cash proceeds received by the Issuer and the Restricted Subsidiaries since immediately after the Issue Date from the issue or sale of Equity Interests of the Issuer or any direct or indirect parent entity of the Issuer (which proceeds are contributed to the Issuer or a Restricted Subsidiary) or cash contributed to the capital of the Issuer (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, the Issuer or any of its Subsidiaries), as determined in accordance with clauses (2) and (3) of the definition of Cumulative Credit, to the extent such net cash proceeds or cash have not been applied to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);

(20) Indebtedness of Foreign Subsidiaries; provided, however , that the aggregate principal amount of Indebtedness Incurred under this clause (20), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (20), does not exceed the greater of $100.0 million at any one time outstanding and 0.75% of Total Assets at the time of Incurrence (it being understood that any Indebtedness Incurred under this clause (20) shall cease to be deemed Incurred or outstanding for purposes of this clause (20) but shall be deemed Incurred for purposes of Section 4.09(a) from and after the first date on which the Foreign Subsidiary could have Incurred such Indebtedness under Section 4.09(a), and the other provisions of this Indenture, without reliance upon this clause (20));

 

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(21) Indebtedness of the Issuer or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;

(22) Indebtedness Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Issuer or any Restricted Subsidiary not in excess of the greater of $50.0 million at any one time outstanding and 0.5% of Total Assets at the time of Incurrence;

(23) Indebtedness issued by the Issuer or a Restricted Subsidiary to current or former officers, directors and employees thereof or any direct or indirect parent thereof, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer or any of its direct or indirect parent companies to the extent permitted under Section 4.07(b)(4);

(24) Indebtedness in respect of letters of credit issued under the Credit Agreement to support Contingent Obligations of the Issuer and the Restricted Subsidiaries arising under the Separation and Distribution Agreement not to exceed $300.0 million (including any refinancing thereof under the Credit Agreement);

(25) Indebtedness representing deferred compensation or other similar arrangements to employees and directors of the Issuer or any Subsidiary Incurred in the ordinary course of business or in connection with the Merger Transactions, an acquisition or any other Permitted Investment;

(26) Indebtedness of the Issuer or any Restricted Subsidiary in respect of Arbitrage Programs in an aggregate principal amount not to exceed the sum of (i) $10 million and (ii) the aggregate amount of Permitted Investments related thereto from time to time made after the Issue Date; and

(27) Indebtedness of the Issuer or any Restricted Subsidiary assumed in connection with the acquisition of homes and related assets in the ordinary course of its relocation services business, which Indebtedness in each case exists at the time of such acquisition and is not created in contemplation of such event.

For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (1) through (27) above or is entitled to be Incurred pursuant to Section 4.09(a), the Issuer shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section 4.09 and the other provisions of this Indenture; provided that (A) all Indebtedness under the Credit Agreement outstanding on the Issue Date (including the Delayed Draw Term Loan) shall be deemed to have been Incurred on the Issue Date pursuant to clause (1) above and

 

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the Issuer shall not be permitted to later reclassify all or any portion of such Indebtedness under the Credit Agreement outstanding on the Issue Date and (B) the Issuer shall not be permitted to later reclassify or divide all or any portion of the Indebtedness Incurred pursuant to clause (24) above. Accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness with the same terms (including any pay in kind payment with respect to the Existing Senior Toggle Notes), the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.09. Note Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.09.

For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.

The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

Section 4.10 Asset Sales .

(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, cause or make an Asset Sale, unless:

(1) the Issuer or any of the Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by senior management or the Board of Directors of the Issuer) of the assets sold or otherwise disposed of;

(2) at least 75% of the consideration therefor received by the Issuer or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; and

 

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(3) to the extent that any consideration received by the Issuer or any Restricted Subsidiary in such Asset Sale constitutes securities or other assets that are of a type or class that constitutes Collateral, such securities or other assets are added to the Collateral securing the Notes in the manner and to the extent required by this Indenture or any of the Collateral Documents with the Lien on such Collateral securing the Notes being of the same priority with respect to the Notes as the Lien on the assets disposed of in the Asset Sale; provided that the amount of:

(A) any liabilities (as shown on the Issuer’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of the Issuer or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Note Guarantee) (x) that are assumed by the transferee of any such assets and from which the Issuer and all of its Restricted Subsidiaries have been validly released by all creditors in writing or (y) in respect of which neither the Issuer nor any Restricted Subsidiary following such Asset Sale has any obligation,

(B) any notes or other obligations or other securities or assets received by the Issuer or such Restricted Subsidiary from such transferee that are converted by the Issuer or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received), and

(C) any Designated Non-cash Consideration received by the Issuer or any of the Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by senior management or the Board of Directors of the Issuer), taken together with all other Designated Non-cash Consideration received pursuant to this clause (C) that is at that time outstanding, not to exceed the greater of (x) 1.50% of Total Assets and (y) $175.0 million at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value), shall be deemed to be Cash Equivalents for purposes of this Section 4.10(a).

(b) Within 450 days after the Issuer’s or any Restricted Subsidiary’s receipt of the Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary may apply the Net Proceeds from such Asset Sale, at its option:

(1) to repay (other than obligations in respect of a Permitted Securitization Financing) (a) First Priority Lien Obligations (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), (b) Indebtedness of a Non-Guarantor Subsidiary, (c) Pari Passu Secured Indebtedness (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto) ( provided that if the Issuer or any Note Guarantor shall so reduce Obligations under Pari Passu Secured Indebtedness, the Issuer will equally and

 

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ratably reduce Obligations under the Notes as provided in Section 3.07, through open market purchases ( provided that such purchases are at or above 100% of the principal amount thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders of Notes to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, the pro rata principal amount of Notes) or (d) if the assets disposed of in the Asset Sale were not Collateral, other Senior Pari Passu Indebtedness ( provided that if the Issuer or any Note Guarantor shall so reduce Obligations under such other Senior Pari Passu Indebtedness, the Issuer will equally and ratably reduce Obligations under the Notes as provided in Section 3.07, through open market purchases ( provided that such purchases are at or above 100% of the principal amount thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, the pro rata principal amount of Notes), in each case other than Indebtedness owed to the Issuer or an Affiliate of the Issuer, or

(2) to make an investment in any one or more businesses ( provided that if such investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary), assets, property or capital expenditures, in each case (a) used or useful in a Similar Business or (b) that replace the properties and assets that are the subject of such Asset Sale; provided that to the extent that the assets disposed of in such Asset Sale were Collateral, such Capital Stock, assets or properties are pledged as Collateral under this Indenture and the Collateral Documents as required thereby with the Lien on such Collateral securing the Notes being of the same priority with respect to the Notes as the Lien on the assets disposed of in the Asset Sale.

In the case of clause (2) of this Section 4.10(b), a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment; provided that in the event such binding commitment is later canceled or terminated for any reason before such Net Proceeds are so applied, the Issuer or such Restricted Subsidiary may satisfy its obligation as to any Net Proceeds by entering into another binding commitment within nine months of such cancellation or termination of the prior binding commitment; provided , further that the Issuer or such Restricted Subsidiary may only enter into such a commitment under the foregoing provision one time with respect to each Asset Sale. Pending the final application of any such Net Proceeds, the Issuer or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Proceeds in any manner not otherwise prohibited by this Indenture. Any Net Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in the first sentence of this Section 4.10(b) (it being understood that any portion of such Net Proceeds used to make an offer to purchase Notes, as described in clause (1) of this Section 4.10(b), shall be deemed to have been invested within the meaning of the prior sentence whether or not such offer is accepted) will be deemed to constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $30.0 million, the Issuer shall make an offer to all Holders of Notes (and, at the option of the Issuer, to holders of any Pari Passu Secured Indebtedness and, in the

 

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case of an Asset Sale of assets that are not Collateral, to holders of Senior Pari Passu Indebtedness) (an “Asset Sale Offer”) to purchase the maximum principal amount of Notes (and such Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable), that is at least $2,000 and an integral multiple of $1,000 that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable, was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest (or, in respect of such Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable, such lesser price, if any, as may be provided for by the terms of such Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable. The Issuer will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceeds $30.0 million by mailing or electronically transmitting the notice required pursuant to the terms of this Indenture, with a copy to the Trustee. To the extent that the aggregate amount of Notes (and such Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes or any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes (and such Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable) surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes (and such Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable) to be purchased in the manner described in Section 3.09. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

(c) The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

Section 4.11 Transactions with Affiliates .

(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an “ Affiliate Transaction ”) involving aggregate consideration in excess of $20.0 million, unless:

(1) such Affiliate Transaction is on terms that are not materially less favorable to the Issuer or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person; and

 

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(2) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $60.0 million, the Issuer delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of the Issuer approving such Affiliate Transaction and set forth in an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (1) of this Section 4.11(a).

(b) The provisions of Section 4.11(a) hereof shall not apply to the following:

(1) transactions between or among the Issuer and/or any of the Restricted Subsidiaries and any merger of the Issuer and any direct parent of the Issuer; provided that at the time of such merger such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of the Issuer and such merger is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose;

(2) Restricted Payments permitted by Section 4.07 hereof and the definition of “Permitted Investments”;

(3) (x) the entering into of the Management Fee Agreement (and any amendment or modification of such agreement) and the payment (whether before or after the Issue Date) of, annual management, consulting, monitoring and advisory fees to the Sponsors (A) in an aggregate amount in any fiscal year not to exceed the sum of (1) the greater of $15.0 million and 2.0% of EBITDA (as defined in the relevant agreement) for the immediately preceding year, plus out of pocket costs and expenses in connection therewith and unpaid amounts accrued for prior periods; plus (2) any deferred fees (to the extent such fees were within such amount in clause (A) (1) above originally), plus (B) 1.0% of the aggregate transaction value or enterprise value with respect to transactions in which the Sponsors provide any transaction, advisory or other services and (y) the payment of the present value of all future amounts payable pursuant to any agreement referred to in clause (3)(x) above in connection with the termination of such agreement;

(4) the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Issuer or any Restricted Subsidiary or any direct or indirect parent of the Issuer;

(5) payments by the Issuer or any of the Restricted Subsidiaries to the Sponsors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, which payments are (x) made pursuant to the Management Fee Agreement or (y) approved by a majority of the Board of Directors (or a majority of the disinterested directors serving on the Board of Directors) of the Issuer in good faith;

 

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(6) transactions in which the Issuer or any of the Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (1) of the preceding paragraph;

(7) payments or loans (or cancellation of loans) to directors, officers, employees or consultants that are approved by a majority of the Board of Directors of the Issuer in good faith;

(8) any agreement as in effect as of the Issue Date or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the Holders of the Notes in any material respect than the original agreement as in effect on the Issue Date) or any transaction contemplated thereby as determined in good faith by senior management or the Board of Directors of the Issuer;

(9) the existence of, or the performance by the Issuer or any of the Restricted Subsidiaries of its obligations under the terms of any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, and any amendment thereto or similar agreements that it may enter into thereafter; provided , however , that the existence of, or the performance by the Issuer or any of the Restricted Subsidiaries of its obligations under, any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (9) to the extent that the terms of any such existing agreement together with all amendments thereto, taken as a whole, or any such new agreement are not otherwise more disadvantageous to the Holders in any material respect than the original agreement as in effect on the Issue Date;

(10) the execution of the Exchange Offers and the issuance of the Extended Maturity Notes pursuant to the Extended Maturity Notes Indentures (and any amendment or modification thereto) and the payment of any amounts pursuant to each of the Extended Maturity Notes Indentures;

(11) transactions with joint ventures, customers, clients, suppliers or purchasers or sellers of goods or services or equipment, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture, which are fair to the Issuer and the Restricted Subsidiaries in the reasonable determination of the Board of Directors or the senior management of the Issuer, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(12) transactions pursuant to any Permitted Securitization Financing;

(13) the issuance of Equity Interests (other than Disqualified Stock) of the Issuer to any Person;

 

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(14) the issuances of securities or the making of other payments, loans (or cancellation of loans), awards or grants in cash, securities or otherwise pursuant to, or the funding of or the entering into of, employment agreements or arrangements (including severance or termination provisions), stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of the Issuer or any direct or indirect parent of the Issuer or of a Restricted Subsidiary, as appropriate, in good faith;

(15) the entering into of any tax sharing agreement or arrangement and any payments permitted by clause (12) of Section 4.07(b);

(16) any contribution to the capital of the Issuer;

(17) transactions permitted by, and complying with, the provisions of Section 5.01;

(18) transactions between the Issuer or any of the Restricted Subsidiaries and any Person, a director of which is also a director of the Issuer or any direct or indirect parent of the Issuer; provided, however , that such director abstains from voting as a director of the Issuer or such direct or indirect parent, as the case may be, on any matter involving such other Person;

(19) pledges of Equity Interests of Unrestricted Subsidiaries; and

(20) intercompany transactions undertaken in good faith (as certified by a responsible financial or accounting officer of the Issuer in an Officer’s Certificate) for the purpose of improving the consolidated tax efficiency of the Issuer and its Subsidiaries and not for the purpose of circumventing any covenant set forth in this Indenture.

Section 4.12 Liens .

The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer to exist any Lien, other than a Permitted Lien, on any asset or property of the Issuer or such Restricted Subsidiary securing Indebtedness. In addition, if the Issuer or any Note Guarantor, directly or indirectly, creates, incurs or suffers to exist any Lien securing First Priority Lien Obligations (other than any cash granted or otherwise pledged to secure reimbursement and other obligations with respect to letters of credit and similar instruments constituting First Priority Lien Obligations, which cash does not secure any of the other First Priority Lien Obligations, any Pari Passu Secured Indebtedness or any Junior Lien Collateral Indebtedness), Second Priority Lien Obligations or Junior Lien Collateral Indebtedness, the Issuer or such Note Guarantor, as the case may be, must concurrently grant a Lien (subject to Permitted Liens) upon such property as security for the Notes and the Note Guarantees, with the Lien upon such property being of the same priority as the other Liens on the Collateral securing the Notes.

 

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Section 4.13 Corporate Existence .

Subject to Article 5 hereof, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence and the corporate, partnership, limited liability company or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Issuer or any such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Issuer and its Restricted Subsidiaries; provided that the Issuer shall not be required to preserve any such right, license or franchise, or the corporate, partnership, limited liability company or other existence of any of its Restricted Subsidiaries, if the Issuer in good faith shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer and its Restricted Subsidiaries, taken as a whole.

Section 4.14 Offer to Repurchase Upon Change of Control .

(a) Upon a Change of Control, each Holder shall have the right to require the Issuer to repurchase all or any part of such Holder’s Notes at a purchase price in cash (the “ Change of Control Payment ”) equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase (subject to the right of the Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), in accordance with the terms contemplated in this Section 4.14; provided , however , that notwithstanding the occurrence of a Change of Control, the Issuer shall not be obligated to purchase any Notes pursuant to this Section 4.14 in the event that the Issuer has exercised its right to redeem such Notes in accordance with Section 3.07 of this Indenture. In the event that at the time of such Change of Control the terms of the Bank Indebtedness restrict or prohibit the repurchase of Notes pursuant to this Section 4.14, then prior to the mailing or transmission of the notice to the Holders provided for in Section 4.14(b) but in any event within 30 days following any Change of Control, the Issuer shall (i) repay in full all Bank Indebtedness or, if doing so will allow the purchase of Notes, offer to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each lender who has accepted such offer, or (ii) obtain the requisite consent under the agreements governing the Bank Indebtedness to permit the repurchase of the Notes as provided for in Section 4.14(b).

(b) Within 30 days following any Change of Control, except to the extent that the Issuer has exercised its right to redeem the Notes in accordance with Section 3.07 of this Indenture, the Issuer shall mail or electronically transmit a notice (a “ Change of Control Offer ”) to each Holder to the address of such Holder appearing in the Note Register with a copy to the Trustee, or otherwise in accordance with the procedures of DTC, with the following information:

(1) that a Change of Control has occurred and that such Holder has the right to require the Issuer to repurchase such Holder’s Notes at a repurchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase (subject to the right of Holders of record on a Record Date to receive interest on the relevant Interest Payment Date);

 

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(2) the circumstances and relevant facts and financial information regarding such Change of Control;

(3) the repurchase price and the repurchase date, (which shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed or electronically transmitted) (the “ Change of Control Payment Date ”);

(4) that any Note not properly tendered will remain outstanding and continue to accrue interest;

(5) that unless the Issuer defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;

(6) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, to the Paying Agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(7) that Holders shall be entitled to withdraw their tendered Notes and their election to require the Issuer to purchase such Notes; provided that the Paying Agent receives, not later than the close of business on the 30th day following the date of the Change of Control notice, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder of the Notes, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;

(8) that if the Issuer is redeeming less than all of the Notes, the Holders of the remaining Notes will be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered; the unpurchased portion of the Notes must be equal to $2,000 or an integral multiple of $1,000 in excess thereof; and

(9) the other instructions, as determined by the Issuer, consistent with this Section 4.14, that a Holder must follow in order to have its Notes purchased.

The notice, if mailed or electronically transmitted in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. If (a) the notice is mailed or electronically transmitted in a manner herein provided and (b) any Holder fails to receive such notice or a Holder receives such notice but it is defective, such Holder’s failure to receive such notice or such defect shall not affect the validity of the proceedings for the purchase of the Notes as to all other Holders that properly received such notice without defect. The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To

 

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the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Indenture by virtue thereof.

(c) On the Change of Control Payment Date, the Issuer shall, to the extent permitted by law,

(1) accept for payment all Notes issued by it or portions thereof properly tendered pursuant to the Change of Control Offer;

(2) deposit with the Paying Agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered; and

(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Issuer.

(d) The Issuer shall not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.14 applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

(e) Notes repurchased by the Issuer pursuant to a Change of Control Offer will have the status of Notes issued but not outstanding or will be retired and canceled at the option of the Issuer. Notes purchased by a third party pursuant to the preceding clause (d) will have the status of Notes issued and outstanding.

(f) Other than as specifically provided in this Section 4.14, any purchase pursuant to this Section 4.14 shall be made pursuant to the provisions of Sections 3.02, 3.05 and 3.06 hereof.

Section 4.15 Future Note Guarantors .

The Issuer shall cause each Restricted Subsidiary that is a Domestic Subsidiary (unless such Subsidiary is already a Note Guarantor, or is a Special Purpose Securitization Subsidiary, an Insurance Subsidiary, a Qualified CFC Holding Company or a Domestic Subsidiary that is Wholly Owned by one or more Foreign Subsidiaries and created to enhance the tax efficiency of the Issuer and its Subsidiaries) that:

(a) guarantees any Indebtedness of the Issuer or any of the Note Guarantors on the Issue Date or at any time thereafter, or

 

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(b) Incurs any Indebtedness or issues any shares of Disqualified Stock permitted to be Incurred or issued pursuant to clause (1) of Section 4.09(b) to execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit C pursuant to which such Restricted Subsidiary will become a Note Guarantor. In addition, if requested by the Trustee, such Restricted Subsidiary shall deliver to the Trustee an Opinion of Counsel to the effect that:

(1) such Note Guarantee has been duly executed and authorized; and

(2) such Note Guarantee constitutes a valid, binding and enforceable obligation of such Restricted Subsidiary, except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without limitation, all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principles of equity.

Each Restricted Subsidiary that becomes a Note Guarantor on or after the Issue Date will also become a party to the Collateral Documents and the Intercreditor Agreements and will as promptly as practicable execute and deliver such security instruments, financing statements, Mortgages, title insurance policies and certificates and opinions of counsel (to the extent, and substantially in the form, delivered on the Issue Date or on the date first delivered in the case of Mortgages (but no greater scope) as may be necessary to vest in the Collateral Agent a security interest senior in priority to the Second Priority Lien Obligations and junior in priority to the First Priority Lien Obligations (subject to Permitted Liens) in the manner and to the extent set forth in the Collateral Documents and this Indenture in properties and assets of the type constituting Collateral as security for the Notes or the Note Guarantees, and thereupon all provisions of this Indenture relating to the Collateral shall be deemed to relate to such properties and assets to the same extent and with the same force and effect.

Each Note Guarantee shall be released in accordance with the provisions of Section 10.06. Upon the release of any Note Guarantor from its Note Guarantee, the liens granted by such Note Guarantor under the Collateral Documents will also be automatically released and the Trustee and the Collateral Agent will execute such documents confirming such release as the Issuer or such Note Guarantor may request (such documents to be in form and substance reasonably satisfactory to the Trustee and Collateral Agent).

Section 4.16 Limitation on activities of Intermediate Holdings .

Intermediate Holdings (i) shall not create, incur, assume or permit to exist any Lien (other than certain Permitted Liens described in this Indenture) on any of the Equity Interests issued by the Issuer and (b) shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence; provided , that so long as no Default exists or would result therefrom, Intermediate Holdings may merge with any other person as permitted by Section 5.01.

Section 4.17 Suspension of Certain Covenants .

(a) Following the first day (the “ Suspension Date ”) that:

 

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(1) the Notes have Investment Grade Ratings from both Rating Agencies, and the Issuer has delivered written notice of such Investment Grade Ratings to the Trustee, and

(2) no Default has occurred and is continuing under this Indenture,

then, beginning on that date, the Issuer and the Restricted Subsidiaries shall not be subject to Sections 4.07, 4.08, 4.09, 4.10 (but only with respect to Asset Sales of non-Collateral), 4.11, 4.14 and 4.15 (but only with respect to any Person that is required to become a Note Guarantor after the date of the commencement of the applicable Suspension Date) and Section 5.01(a)(4) (collectively, the “ Suspended Covenants ”).

(b) In the event that the Issuer and the Restricted Subsidiaries are not subject to the Suspended Covenants for any period of time as a result of the foregoing, and on any subsequent date (the “Reversion Date”) (1) one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the Notes below an Investment Grade Rating and/or (2) the Issuer or any of its Affiliates enters into an agreement to effect a transaction that would result in a Change of Control and one or more of the Rating Agencies indicate that if consummated, such transaction (alone or together with any related recapitalization or refinancing transactions) would cause such Rating Agency to withdraw its Investment Grade Rating or downgrade the ratings assigned to the Notes below an Investment Grade Rating, then the Issuer and its Restricted Subsidiaries shall thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events, including, without limitation, a proposed transaction described in clause (b)(2) above. The period of time between the Suspension Date and the Reversion Date is referred to as the “Suspension Period.”

(c) Notwithstanding that the Suspended Covenants may be reinstated, no Default shall be deemed to have occurred as a result of a failure to comply with the Suspended Covenants during the Suspension Period. During any Suspension Period, the Issuer may not designate any Subsidiary as an Unrestricted Subsidiary unless the Issuer would have been permitted to designate such Subsidiary as an Unrestricted Subsidiary if a Suspension Period had not been in effect for any period.

(d) On the Reversion Date, all Indebtedness Incurred during the Suspension Period shall be classified to have been Incurred pursuant to Section 4.09(a) or one of the clauses set forth in Section 4.09(b) (in each case, to the extent such Indebtedness would be permitted to be Incurred thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred prior to the Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness would not be so permitted to be Incurred pursuant to Section 4.09(a) or Section 4.09(b), such Indebtedness shall be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under Section 4.09(b)(3). For purposes of Section 4.15, all Indebtedness Incurred during the Suspension Period and outstanding on the Reversion Date by any Non-Guarantor Subsidiary will be deemed to have been Incurred on the Reversion Date. Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 4.07 shall be made as though Section 4.07 had been in effect since the Issue Date and throughout the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period shall reduce the amount available to be made as Restricted Payments under

 

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Section 4.07(a) and the items specified in clauses (1) through (6) of the definition of “Cumulative Credit” shall increase the amount available to be made as Restricted Payments under Section 4.07(a). For purposes of determining compliance with Section 4.10 on the Reversion Date, the Net Proceeds from all Asset Sales not applied in accordance with Section 4.10 shall be deemed to be reset to zero.

ARTICLE 5

SUCCESSORS

Section 5.01 Merger, Amalgamation Consolidation or Sale of All or Substantially All Assets .

(a) The Issuer shall not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up or convert into (whether or not the Issuer is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless:

(1) the Issuer is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than the Issuer) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Issuer or such Person, as the case may be, being herein called the “ Successor Company ”); provided that in the case where the surviving Person is not a corporation, a co-obligor of the Notes is a corporation;

(2) the Successor Company (if other than the Issuer) expressly assumes all the obligations of the Issuer under this Indenture, the Notes, the Collateral Documents and the Intercreditor Agreements pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee and shall cause such amendments, supplements or other instruments to be executed, filed, and recorded in such jurisdictions as may be required by applicable law to cause the property and assets that are the type of which would constitute Collateral owned by or transferred to the Successor Company to be made subject to the Lien of the Collateral Documents in the manner and to the extent required by this Indenture or any of the Collateral Documents and to preserve and protect the Lien on the Collateral owned by or transferred to the Successor Company, including such financing statements or comparable documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions;

(3) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Company or any of

 

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the Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing;

(4) immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period (and treating any Indebtedness that becomes an obligation of the Successor Company or any of the Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), either

(A) the Successor Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a), or

(B) the Fixed Charge Coverage Ratio for the Successor Company and the Restricted Subsidiaries would be greater than or equal to such ratio for the Issuer and the Restricted Subsidiaries immediately prior to such transaction;

(5) if the Successor Company is not the Issuer, Intermediate Holdings and each Note Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Intermediate Holdings Guarantee or Note Guarantee, as applicable, shall apply to such Person’s obligations under this Indenture, the Notes, the Collateral Documents and the Intercreditor Agreements and its obligations shall continue to be in effect and shall cause such amendments, supplements or other instruments to be executed, filed and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral owned by Intermediate Holdings and such Note Guarantor, together with such financing statements or comparable documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions;

(6) the Successor Company (if other than the Issuer) shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation merger or transfer and such supplemental indentures (if any) comply with this Indenture and, if a supplemental indenture or any supplement to any Collateral Document is required in connection with such transaction, such supplement will comply with the applicable provisions of this Indenture and the Collateral Documents; and

(7) the Collateral owned by or transferred to the Successor Company shall:

 

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(A) continue to constitute Collateral under this Indenture and the Collateral Documents,

(B) be subject to the Lien in favor of the Collateral Agent for the benefit of the Collateral Agent, the Trustee and the Holders; and

(C) not be subject to any Lien other than Permitted Liens.

Notwithstanding the foregoing clauses (3) and (4) of this Section 5.01(a), (a) subject to the restrictions on Note Guarantors described in Section 5.01(b), (1) any Non-Guarantor Subsidiary may merge, consolidate or amalgamate with or transfer all or part of its properties and assets to the Issuer or to another Restricted Subsidiary and (2) any Note Guarantor may merge, consolidate or amalgamate with or transfer all or part of its properties and assets to the Issuer or any other Note Guarantor, and (b) the Issuer may merge, consolidate or amalgamate with an Affiliate incorporated solely for the purpose of reincorporating the Issuer in another state of the United States, the District of Columbia or any territory of the United States or may convert into a limited liability company ( provided that a co-obligor of the Notes is a corporation), so long as the amount of Indebtedness, Disqualified Stock and Preferred Stock of the Issuer and the Restricted Subsidiaries is not increased thereby (any transaction described in this sentence a “Specified Merger/Transfer Transaction”).

(b) Subject to the provisions of Section 10.06, Intermediate Holdings and each Note Guarantor shall not, and the Issuer shall not permit any Note Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not Intermediate Holdings or such Note Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(1) either (a) Intermediate Holdings or such Note Guarantor, as applicable, is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than Intermediate Holdings or such Note Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (Intermediate Holdings or such Note Guarantor or such Person, as the case may be, being herein called the “ Successor Note Guarantor ”) and the Successor Note Guarantor (if other than Intermediate Holdings or such Note Guarantor) expressly assumes all the obligations of Intermediate Holdings or such Note Guarantor under this Indenture, Intermediate Holdings or such Note Guarantor’s applicable Intermediate Holdings Guarantee or Note Guarantee, as the case may be, and the Collateral Documents and the Intercreditor Agreements pursuant to a supplemental indenture or other documents or instruments in form reasonably satisfactory to the Trustee and will cause such amendments, supplements or other instruments to be executed, filed and recorded in such jurisdictions as may be required by applicable law to cause the property and assets that are of the type of which would constitute Collateral owned by or transferred to the Successor Note

 

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Guarantor to be made subject to the Lien of the Collateral Documents in the manner and to the extent required by this Indenture or any of the Collateral Documents and to preserve and protect the Lien on the Collateral owned by or transferred to the Successor Note Guarantor, including such financing statements or comparable documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions, or (b) such sale or disposition or consolidation, amalgamation or merger is not in violation of Section 4.10;

(2) the Successor Note Guarantor (if other than Intermediate Holdings or such Note Guarantor) shall have delivered or caused to be delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indentures, amendments, supplements or other instruments relating to the applicable Collateral Documents if any, comply with this Indenture and the Collateral Documents, if a supplemental indenture or any supplement to any Collateral Documents is required in connection with such transaction, such supplement shall comply with the applicable provisions of this Indenture;

(3) immediately after such transaction, no Default or Event of Default exists; and

(4) the Collateral owned by or transferred to the Successor Note Guarantor shall:

(A) continue to constitute Collateral under this Indenture and the Collateral Documents,

(B) be subject to the Lien in favor of the Collateral Agent for the benefit of the Collateral Agent, the Trustee and the Holders; and

(C) not be subject to any Lien other than Permitted Liens.

(c) Notwithstanding the foregoing, (1) Intermediate Holdings or a Note Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating Intermediate Holdings or such Note Guarantor in another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness, Preferred Stock and Disqualified Stock of Intermediate Holdings and the Note Guarantor is not increased thereby and (2) a Note Guarantor may merge, amalgamate or consolidate with another Note Guarantor or the Issuer.

(d) In addition, notwithstanding the foregoing, any Note Guarantor may consolidate, amalgamate or merge with or into or wind up into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a “ Transfer ”) to (x) the Issuer or any Note Guarantor or (y) any Non-Guarantor Subsidiary; provided that at the time of each such Transfer pursuant to clause (y) the aggregate amount of all such Transfers since the Issue Date shall not exceed the greater of $625.0 million and 5.0% of

 

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Total Assets after giving effect to each such Transfer and including all Transfers occurring from and after the Issue Date (excluding Transfers in connection with the Merger Transactions).

(e) For purposes of this Section 5.01, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Issuer or one or more Subsidiaries of Intermediate Holdings, which properties and assets, if held by the Issuer instead of Intermediate Holdings or such Subsidiaries, as the case may be, would constitute all or substantially all of the properties and assets of the Issuer on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Issuer.

Section 5.02 Successor Entity Substituted .

Upon any consolidation, amalgamation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Issuer in accordance with Section 5.01(a), the Successor Company (if other than the Issuer) will succeed to, and be substituted for, the Issuer under this Indenture and the Notes, and in such event the Issuer will automatically be released and discharged from its obligations under this Indenture, the Notes, the Collateral Documents and the Intercreditor Agreements, but in the case of a lease of all or substantially all of its assets, the Issuer will not be released from the obligations to pay the principal of, interest, if any, on the Notes or any obligation under the Collateral Documents and the Intercreditor Agreements. Upon any consolidation, amalgamation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of Intermediate Holdings or a Note Guarantor in accordance with Section 5.01(b), the Successor Note Guarantor (if other than Intermediate Holdings or such Note Guarantor) will succeed to, and be substituted for, Intermediate Holdings or such Note Guarantor under this Indenture and Intermediate Holdings or such Not Guarantor’s applicable Intermediate Holdings Guarantee or Note Guarantee, and Intermediate Holdings or such Note Guarantor will automatically be released and discharged from its obligations under this Indenture, Intermediate Holdings Guarantee or applicable Note Guarantee, the Collateral Documents and the Intercreditor Agreements, but in the case of a lease of all or substantially all of its assets, Intermediate Holdings and the Note Guarantor will not be released from its obligations under the Intermediate Holdings Guarantee or Note Guarantee, as applicable, the Collateral Documents and the Intercreditor Agreements.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01 Events of Default .

(a) An “ Event of Default ” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

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(1) a default in any payment of interest on any Note when the same becomes due and payable, and such default continues for a period of 30 days,

(2) a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise,

(3) Intermediate Holdings, the Issuer or any of the Restricted Subsidiaries fails to comply with its obligations under Section 5.01,

(4) Intermediate Holdings, the Issuer or any of the Restricted Subsidiaries fails to comply for 60 days after the notice specified below with (a) its agreements contained in the Notes or this Indenture (other than those referred to in clauses (1), (2) or (3) of this Section 6.01(a)) or (b) any agreement contained in the Collateral Documents or the Intercreditor Agreements,

(5) the Issuer or any Significant Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to the Issuer or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $100.0 million or its foreign currency equivalent,

(6) Intermediate Holdings, the Issuer or any Restricted Subsidiary that is a Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

(i) commences proceedings to be adjudicated bankrupt or insolvent;

(ii) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under applicable Bankruptcy Law;

(iii) consents to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;

(iv) makes a general assignment for the benefit of its creditors; or

(v) generally is not paying its debts as they become due;

(7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief against Intermediate Holdings, the Issuer or any Restricted Subsidiary that is a Significant Subsidiary, in a proceeding in which Intermediate Holdings, the Issuer or any such Restricted Subsidiary that is a Significant Subsidiary, is to be adjudicated bankrupt or insolvent;

 

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(ii) appoints a receiver, liquidator, assignee, trustee, sequestrator or other similar official of Intermediate Holdings, the Issuer or any Restricted Subsidiary that is a Significant Subsidiary, or for all or substantially all of the property of Intermediate Holdings, the Issuer or any Restricted Subsidiary that is a Significant Subsidiary; or

(iii) orders the liquidation of Intermediate Holdings, the Issuer or any Restricted Subsidiary that is a Significant Subsidiary;

(iv) and the order or decree remains unstayed and in effect for 60 consecutive days; or

(8) the Issuer or any Significant Subsidiary fails to pay final judgments aggregating in excess of $100.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days following the entry thereof,

(9) Intermediate Holdings Guarantee or any Note Guarantee of a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms thereof) or Intermediate Holdings or any Note Guarantor that qualifies as a Significant Subsidiary (or one or more Note Guarantors that, taken together as of the date of the most recent audited financial statements of the Issuer, would constitute a Significant Subsidiary) denies or disaffirms its obligations under this Indenture, the Intermediate Holdings Guarantee or any Note Guarantees and such Default continues for 10 days after the notice specified below, or

(10) with respect to any material portion of the Collateral, (A) the security interest under the Collateral Documents, at any time, ceases to be a valid and perfected Lien (perfected as or having the priority required by the Collateral Documents and this Indenture) and in full force and effect for any reason other than in accordance with their terms and the terms of this Indenture and other than the satisfaction in full of all obligations under this Indenture and discharge of this Indenture, except to the extent that any such loss of perfection or priority results from the limitations of foreign laws, rules and regulations as they apply to pledges of Equity Interests in Foreign Subsidiaries or the application thereof, or from the failure of the Collateral Agent (or the First Priority Agent) to maintain possession of certificates or instruments actually delivered to it representing securities pledged under the Collateral Documents and except to the extent that such loss is covered by a lender’s title insurance policy and the Collateral Agent shall be reasonably satisfied with the credit of such insurer or (B) the Issuer, Intermediate Holdings or any Note Guarantor that is a Significant Subsidiary asserts, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable and, in the case of Intermediate Holdings or any such Note Guarantor, the Issuer fails to cause Intermediate Holdings or such Note

 

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Guarantor to rescind such assertion within 30 days after the Issuer has knowledge of such assertion.

A Default under clause (4) above shall not constitute an Event of Default until the Trustee notifies the Issuer or the Holders of at least 25% in principal amount of the outstanding Notes notify the Issuer and the Trustee of the Default and the Issuer does not cure such Default within the time specified in clause (4) above after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a “Notice of Default.”

The Issuer shall deliver to the Trustee, within thirty (30) days after the occurrence thereof, written notice in the form of an Officer’s Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

Section 6.02 Acceleration .

(a) If an Event of Default (other than an Event of Default specified in clauses (6) or (7) of Section 6.01(a) with respect to the Issuer) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Notes by notice to the Issuer may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in clauses (6) or (7) of Section 6.01(a) with respect to the Issuer occurs, the principal of, premium, if any, and interest on all the Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

In the event of any Event of Default specified in clause (5) of Section 6.01(a), such Event of Default and all consequences thereof (excluding, however, any resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders of the Notes, if within 20 days after such Event of Default arose the Issuer delivers an Officer’s Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of the Notes as described above be annulled, waived or rescinded upon the happening of any such events.

(b) Subject to Section 6.02(a), at any time after a declaration of acceleration with respect to the Notes, the Holders of a majority in principal amount of Notes may rescind and cancel such declaration and its consequences:

(1) if the rescission would not conflict with any judgment or decree;

(2) if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration;

 

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(3) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid; and

(4) if the Issuer has paid the Trustee its reasonable compensation and reimbursed the Trustee for its expenses, disbursements and advances.

No such rescission shall affect any subsequent Default or impair any right consequent thereto.

Section 6.03 Other Remedies .

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

Section 6.04 Waiver of Past Defaults .

Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences hereunder, except a continuing Default in the payment of the principal of, premium, if any, or interest on, any Note held by a non-consenting Holder (including in connection with an Asset Sale Offer or a Change of Control Offer); provided , subject to Section 6.02 hereof, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

Section 6.05 Control by Majority .

Subject to Sections 7.01(e), 7.02(f), 7.02(k) and 7.07, Holders of a majority in principal amount of the then total outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or the Collateral Agent or of exercising any trust or power conferred on the Trustee or the Collateral Agent. The Trustee and the Collateral Agent, as the case may be, however, may refuse to follow any direction that conflicts with law or this Indenture, the Collateral Documents or the Intercreditor Agreements or that the Trustee or the Collateral Agent determines is unduly prejudicial to the rights of any other Holder of a Note or that would involve the Trustee or the Collateral Agent in personal liability.

 

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Section 6.06 Limitation on Suits .

Subject to Section 6.07 hereof, no Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:

(1) such Holder has previously given the Trustee notice that an Event of Default is continuing;

(2) Holders of at least 25% in principal amount of the total outstanding Notes have requested the Trustee to pursue the remedy;

(3) Holders of the Notes have offered the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(5) Holders of a majority in principal amount of the total outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

Section 6.07 Rights of Holders of Notes to Receive Payment .

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an Asset Sale Offer or a Change of Control Offer), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

Section 6.08 Collection Suit by Trustee .

If an Event of Default specified in Section 6.01(a)(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount of principal of, premium, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.09 Restoration of Rights and Remedies .

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceedings, the Issuer, the Trustee and the Holders

 

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shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding has been instituted.

Section 6.10 Rights and Remedies Cumulative .

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07 hereof, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 6.11 Delay or Omission Not Waiver .

No delay or omission of the Trustee or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

Section 6.12 Trustee May File Proofs of Claim .

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Notes including Holdings, Intermediate Holdings and the Note Guarantors), their creditors or their property and shall be entitled and empowered to participate as a member in any official committee of creditors appointed in such matter and to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee or the Collateral Agent under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee or the Collateral Agent under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any

 

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plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.13 Priorities .

Subject to the terms of the Collateral Documents and the Intercreditor Agreements with respect to any proceeds of Collateral, if the Trustee collects any money or property pursuant to this Article 6, or pursuant to the foreclosure or other remedial provisions contained in the Collateral Documents or the Intercreditor Agreements, it shall pay out the money in the following order:

(i) to the Trustee and the Collateral Agent, their agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and to the Collateral Agent for fees and expenses incurred under the Collateral Documents and the Intercreditor Agreements;

(ii) to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, respectively; and

(iii) to the Issuer or to such party as a court of competent jurisdiction shall direct including Holdings or a Note Guarantor, if applicable.

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.13.

Section 6.14 Undertaking for Costs .

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.14 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

ARTICLE 7

TRUSTEE AND COLLATERAL AGENT

Section 7.01 Duties of Trustee and the Collateral Agent .

(a) If an Event of Default has occurred and is continuing, each of the Trustee and the Collateral Agent shall exercise such of the rights and powers vested in it by this

 

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Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) With respect to the Trustee, except during the continuance of an Event of Default, and at all times with respect to the Collateral Agent:

(1) the duties of the Trustee and the Collateral Agent shall be determined solely by the express provisions of this Indenture, the Collateral Documents and the Intercreditor Agreements and the Trustee and the Collateral Agent need perform only those duties that are specifically set forth in this Indenture, the Collateral Documents and the Intercreditor Agreements and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee and the Collateral Agent; and

(2) in the absence of bad faith on its part, the Trustee and the Collateral Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and the Collateral Agent and conforming to the requirements of this Indenture, the Collateral Documents and the Intercreditor Agreements. However, in the case of any such certificates or opinions which by any provision hereof or the Collateral Documents or the Intercreditor Agreements are specifically required to be furnished to the Trustee or the Collateral Agent, as applicable, the Trustee or the Collateral Agent, as applicable, shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture, the Collateral Documents and the Intercreditor Agreements, as applicable (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c) Neither the Trustee nor the Collateral Agent may be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

(2) neither the Trustee nor the Collateral Agent shall be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved in a court of competent jurisdiction that the Trustee or the Collateral Agents was negligent in ascertaining the pertinent facts; and

(3) neither the Trustee nor the Collateral Agent shall be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.

(d) Whether or not therein expressly so provided, every provision of this Indenture, the Collateral Documents and the Intercreditor Agreements, as applicable, that in any way relates to the Trustee or the Collateral Agent is subject to paragraphs (a), (b) and (c) of this Section 7.01.

 

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(e) Neither the Trustee nor the Collateral Agent shall be under any obligation to exercise any of its rights or powers under this Indenture, the Collateral Documents and the Intercreditor Agreements at the request or direction of any of the Holders of the Notes unless the Holders have offered to the Trustee or the Collateral Agent, as applicable, indemnity or security satisfactory to the Trustee against any loss, liability or expense.

(f) Neither the Trustee nor the Collateral Agent shall be liable for interest on any money received by it except as the Trustee or the Collateral Agent may agree in writing with the Issuer. Money held in trust by the Trustee or the Collateral Agent need not be segregated from other funds except to the extent required by law.

Section 7.02 Rights of Trustee and the Collateral Agent .

(a) Each of the Trustee and the Collateral Agent may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. Neither the Trustee nor the Collateral Agent need investigate any fact or matter stated in the document, but the Trustee and the Collateral Agent, as applicable, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee or the Collateral Agent, as applicable, shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation. Any permissive right or authority granted to the Trustee or the Collateral Agent shall not be construed as a mandatory duty.

(b) Before the Trustee or the Collateral Agent acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both subject to the other provisions of this Indenture. Neither the Trustee nor the Collateral Agent shall be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee and the Collateral Agent may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c) Each of the Trustee and the Collateral Agent may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.

(d) Neither the Trustee nor the Collateral Agent shall be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture, the Collateral Documents or the Intercreditor Agreements.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer shall be sufficient if signed by an Officer of the Issuer. Neither the Trustee nor the Collateral Agent shall have any duty to inquire as to the

 

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performance of the Issuer’s, Holdings’, Intermediate Holdings’ or any Note Guarantor’s covenants herein.

(f) None of the provisions of this Indenture, the Collateral Documents or the Intercreditor Agreements shall require the Trustee or the Collateral Agent to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.

(g) Neither the Trustee nor the Collateral Agent shall be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee or the Collateral Agent, as applicable, has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee or the Collateral Agent, as applicable, at the Corporate Trust Office of the Trustee or the Collateral Agent, as applicable, and such notice references the existence of a Default or Event of Default, the Notes and this Indenture.

(h) In no event shall the Trustee or the Collateral Agent be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee or the Collateral Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

(i) The rights, privileges, protections, immunities and benefits given to each of the Trustee and the Collateral Agent, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, each of the Trustee and the Collateral Agent in each of its capacities hereunder and under the Collateral Documents and the Intercreditor Agreements, and by each agent, custodian and other Person employed to act hereunder or thereunder.

(j) Neither the Trustee nor the Collateral Agent shall be required to give any bond or surety in respect of the performance of its powers or duties.

(k) The Trustee and the Collateral Agent may request that the Issuer deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, the Collateral Documents and the Intercreditor Agreements, which Officer’s Certificate may be signed by any person authorized to sign an Officer’s Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.

(l) The permissive rights of the Trustee and the Collateral Agent enumerated herein shall not be construed as duties.

Section 7.03 Individual Rights of Trustee and Collateral Agent .

The Trustee or the Collateral Agent in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Trustee or the Collateral Agent. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

 

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Section 7.04 Disclaimer .

Neither the Trustee nor the Collateral Agent shall be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Notes, the Collateral Documents or the Intercreditor Agreements, it shall not be accountable for the Issuer’s use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuer’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee or the Collateral Agent, as the case may be, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

Section 7.05 Notice of Defaults .

If a Default occurs and is continuing and if it is actually known to a Trust Officer of the Trustee, the Trustee shall mail or electronically transmit to Holders of Notes a notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default relating to the payment of principal, premium, if any, or interest on any Note, the Trustee may withhold from the Holders notice of any continuing Default if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. The Trustee shall not be deemed to know of any Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee and references a Default or Event of Default.

Section 7.06 [Reserved] .

Section 7.07 Compensation and Indemnity .

The Issuer and the Note Guarantors, jointly and severally, shall pay to the Trustee and the Collateral Agent from time to time such compensation for its acceptance of this Indenture and services hereunder and under the Collateral Documents and the Intercreditor Agreements as the parties shall agree in writing from time to time. Neither the Trustee’s or the Collateral Agent’s compensation shall be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee and the Collateral Agent promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s and the Collateral Agent’s agents and counsel.

The Issuer and the Note Guarantors, jointly and severally, shall indemnify each of the Trustee, any predecessor Trustee, the Collateral Agent and any predecessor Collateral Agent and their agents for, and hold the Trustee and the Collateral Agent harmless against, any and all loss, damage, claims, liability or expense (including attorneys’ fees and including taxes (other than taxes based upon, measured by or determined by the income of the Trustee and the Collateral Agent)) incurred by it in connection with the acceptance or administration of this trust

 

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and the performance of its duties hereunder and under the Collateral Documents and the Intercreditor Agreements (including the costs and expenses of enforcing this Indenture, the Collateral Documents and the Intercreditor Agreements against the Issuer, Holdings, Intermediate Holdings or any of the Note Guarantors (including this Section 7.07) or defending itself against any claim whether asserted by any Holder, the Issuer, Holdings, Intermediate Holdings any Note Guarantor or any other Person, or liability in connective with the acceptance, exercise or performance of any of its powers or duties hereunder). Each of the Trustee and the Collateral Agent shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee or the Collateral Agent to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Trustee and the Collateral Agent may have separate counsel and the Issuer shall pay the fees and expenses of such counsel. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee or the Collateral Agent through the Trustee’s or the Collateral Agent’s own willful misconduct, negligence or bad faith.

The obligations of the Issuer under this Section 7.07 shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee or the Collateral Agent.

To secure the payment obligations of the Issuer and the Note Guarantors in this Section 7.07, the Trustee and the Collateral Agent shall have a Lien prior to the Notes on all money or property held or collected by the Trustee and the Collateral Agent, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

When the Trustee or the Collateral Agent incurs expenses or renders services after an Event of Default specified in Section 6.01(a)(6) or (7) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

Section 7.08 Replacement of Trustee or Collateral Agent .

A resignation or removal of the Trustee or the Collateral Agent and appointment of a successor Trustee or a successor Collateral Agent shall become effective only upon the successor Trustee’s or successor Collateral Agent’s acceptance of appointment as provided in this Section 7.08. The Trustee or the Collateral Agent may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Holders of a majority in principal amount of the then outstanding Notes may remove the Trustee or the Collateral Agent by so notifying the Trustee or the Collateral Agent, as the case may be, and the Issuer in writing. The Issuer may remove the Trustee or the Collateral Agent if:

(i) in the case of the Trustee, the Trustee fails to comply with Section 7.10 hereof;

(ii) the Trustee or the Collateral Agent, as the case may be, is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

 

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(iii) a custodian or public officer takes charge of the Trustee or the Collateral Agent, as the case may be, or its property; or

(iv) the Trustee or the Collateral Agent becomes incapable of acting.

If the Trustee or the Collateral Agent resigns or is removed or if a vacancy exists in the office of Trustee or the Collateral Agent for any reason, the Issuer shall promptly appoint a successor Trustee or a successor Collateral Agent, as the case may be. Within one year after the successor Trustee or successor Collateral Agent takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee or a successor Collateral Agent to replace the successor Trustee or successor Collateral Agent appointed by the Issuer.

If a successor Trustee or a successor Collateral Agent does not take office within 60 days after the retiring Trustee or Collateral Agent resigns or is removed, the retiring Trustee or Collateral Agent (at the Issuer’s expense), the Issuer or the Holders of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee or successor Collateral Agent, as the case may be.

If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

A successor Trustee or successor Collateral Agent shall deliver a written acceptance of its appointment to the retiring Trustee or Collateral Agent and to the Issuer. Thereupon, the resignation or removal of the retiring Trustee or Collateral Agent shall become effective, and the successor Trustee or Collateral Agent shall have all the rights, powers and duties of the Trustee or Collateral Agent under this Indenture. The successor Trustee or successor Collateral Agent shall mail a notice of its succession to Holders. The retiring Trustee or Collateral Agent shall promptly transfer all property held by it as Trustee or Collateral Agent to the successor Trustee or successor Collateral Agent; provided all sums owing to the Trustee or the Collateral Agent hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee or the Collateral Agent pursuant to this Section 7.08, the Issuer’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee or Collateral Agent.

Section 7.09 Successor by Merger, etc .

If the Trustee or the Collateral Agent consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee or successor Collateral Agent.

Section 7.10 Eligibility; Disqualification .

There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or

 

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examination by federal or state authorities and that has a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance .

The Issuer may, at its option and at any time, elect to have either Section 8.02 or 8.03 hereof applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.

Section 8.02 Legal Defeasance and Discharge .

Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Issuer, Holdings, Intermediate Holdings and the Note Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes, the Holdings Guarantee, the Intermediate Holdings Guarantee and the Note Guarantees on the date the conditions set forth below are satisfied (“ Legal Defeasance ”). For this purpose, Legal Defeasance means that the Issuer shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all of its other obligations under such Notes and this Indenture including that of Holdings, Intermediate Holdings and the Note Guarantors (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:

(a) the rights of Holders of Notes to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due, solely out of the trust created pursuant to this Indenture referred to in Section 8.04 hereof;

(b) the Issuer’s obligations with respect to Notes concerning issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(c) the rights, powers, trusts, duties and immunities of the Trustee, and the Issuer’s obligations in connection therewith; and

(d) this Section 8.02.

If the Issuer exercises the Legal Defeasance, the Liens on the Collateral will be automatically released and Guarantees in effect at such time will automatically terminate.

Subject to compliance with this Article 8, the Issuer may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

 

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Section 8.03 Covenant Defeasance .

Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Issuer, Holdings, Intermediate Holdings and the Note Guarantors shall have the Lien on the Collateral granted under the Collateral Documents automatically released and shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants contained in Sections 3.09, 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 (solely with respect to Restricted Subsidiaries), 4.14, 4.15 and 4.16 hereof, and clause (4) of Section 5.01(a), hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 hereof are satisfied (“ Covenant Defeasance ”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(a)(3) (solely with respect to clause (4) of Section 5.01(a)), 6.01(a)(4), 6.01(a)(5), 6.01(a)(6) (solely with respect to Restricted Subsidiaries that are Significant Subsidiaries), 6.01(a)(7) (solely with respect to Restricted Subsidiaries that are Significant Subsidiaries), 6.01(a)(8), 6.01(a)(9) and 6.01(a)(10) hereof shall not constitute Events of Default.

Section 8.04 Conditions to Legal or Covenant Defeasance .

The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes:

In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes:

(1) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, U.S. dollar-denominated Government Obligations, or a combination thereof, in such amounts as shall be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest due on the Notes on the stated maturity date or on the date of redemption, as the case may be, of such principal, premium, if any, or interest on such Notes, and the Issuer must specify whether such Notes are being defeased to maturity or to a particular date of redemption;

 

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(2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions,

(a) the Issuer has received from, or there has been published by, the United States Internal Revenue Service a ruling, or

(b) since the issuance of the Notes, there has been a change in the applicable U.S. federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes, as applicable, as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; provided, however , the Opinion of Counsel required with respect to a Legal Defeasance need not be delivered if all Notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer;

(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to such tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under the Credit Agreement or any other material agreement or instrument (other than this Indenture) to which the Issuer or any Restricted Subsidiary is a party or by which the Issuer or any Restricted Subsidiary is bound (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith);

(6) the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that, as of the date of such opinion and subject to customary assumptions and exclusions following the deposit, the trust funds will not be subject to the effect of Section 547 of Title 11 of the United States Code;

 

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(7) the Issuer shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Issuer with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuer, Holdings, Intermediate Holdings or any Note Guarantor or others; and

(8) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions), each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.

Section 8.05 Deposited Money and Government Obligations to Be Held in Trust; Other Miscellaneous Provisions .

Subject to Section 8.06 hereof, all money and Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “ Trustee ”) pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer, Holdings or a Note Guarantor acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and interest, but such money need not be segregated from other funds except to the extent required by law.

The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or Government Obligations deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon the request of the Issuer any money or Government Obligations held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 8.06 Repayment to the Issuer .

Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium or interest on any Note and remaining unclaimed for two years after such principal, and premium or interest has become due and payable shall be paid to the Issuer on its request or (if then held by the Issuer) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon cease.

 

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Section 8.07 Reinstatement .

If the Trustee or Paying Agent is unable to apply any United States dollars or Government Obligations in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuer’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided that, if the Issuer makes any payment of principal of, premium or interest on any Note following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01 Without Consent of Holders of Notes .

(a) Notwithstanding Section 9.02 hereof, the Issuer, Holdings (with respect to the Holdings Guarantee or this Indenture), Intermediate Holdings (with respect to the Intermediate Holdings Guarantee or this Indenture), any Note Guarantor (with respect to its Note Guarantee or this Indenture), the Trustee and the Collateral Agent may amend or supplement this Indenture, the Notes, the Holdings Guarantee, the Intermediate Holdings Guarantee, the Note Guarantees, the Collateral Documents and the Intercreditor Agreements without the consent of any Holder:

(1) to cure any ambiguity, omission, mistake, defect or inconsistency;

(2) to provide for uncertificated Notes in addition to or in place of certificated Notes; provided , however , that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code;

(3) to comply with Section 5.01 hereof;

(4) to provide for the assumption of the Issuer’s, Holdings’, Intermediate Holdings’ or any Note Guarantor’s obligations to the Holders under this Indenture, the Notes, the Collateral Documents and the Intercreditor Agreements;

(5) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under this Indenture, the Collateral Documents or the Intercreditor Agreements of any such Holder;

 

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(6) to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Issuer, Holdings, Intermediate Holdings or any Note Guarantor;

(7) to comply with requirements of the SEC in order to effect the qualification of this Indenture under the Trust Indenture Act;

(8) to provide for the appointment or a successor or replacement Collateral Agent under the Collateral Documents or Intercreditor Agreements;

(9) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee thereunder pursuant to the requirements thereof;

(10) to provide for the issuance of Additional Notes;

(11) to add a Note Guarantor under this Indenture;

(12) to conform the text of this Indenture, the Holdings Guarantee, the Intermediate Holdings Guarantee, the Note Guarantees, Notes, the Collateral Documents, or the Intercreditor Agreements to any provision of the “Description of notes” section of the Offering Memorandum to the extent that such provision in such “Description of notes” section was intended to be a verbatim recitation of a provision of this Indenture, Note Guarantee, the Holdings Guarantee, the Intermediate Holdings Guarantee, the Collateral Documents, the Intercreditor Agreements or Notes;

(13) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including, without limitation to facilitate the issuance and administration of the Notes; provided, however , that (i) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of Holders to transfer Notes;

(14) to make any change that does not adversely affect the rights of any Holder in any material respect;

(15) to confirm or complete the grant of, secure, or expand the Collateral securing, the Notes, the Holdings Guarantee, the Intermediate Holdings Guarantee and the Note Guarantees;

(16) to confirm and evidence the release, termination or discharge of any Lien securing the Notes, the Intermediate Holdings Guarantee or a Note Guarantee in accordance with the terms of this Indenture, the Collateral Documents or the Intercreditor Agreements; or

 

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(17) as provided by the Collateral Documents and the Intercreditor Agreements with respect to amendments and supplements.

Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture or any amendment or supplement to the Holdings Guarantee, the Intermediate Holdings Guarantee, the Note Guarantees, the Collateral Documents and the Intercreditor Agreements, and upon receipt by the Trustee and the Collateral Agent of the documents described in Section 9.06 hereof, the Trustee and the Collateral Agent shall join with the Issuer, Holdings, Intermediate Holdings and the Note Guarantors in the execution of any amended or supplemental indenture or any amendment or supplement to the Holdings Guarantee, the Intermediate Holdings Guarantee, the Note Guarantees, the Collateral Documents and the Intercreditor Agreements, in each case, authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but neither the Trustee nor the Collateral Agent shall be obligated to enter into such amended or supplemental indenture or any amendment or supplement to the Holdings Guarantee, the Intermediate Holdings Guarantee, the Note Guarantees, the Collateral Documents and the Intercreditor Agreements, in each case, that affects its own rights, duties or immunities under this Indenture or otherwise.

(b) The Holders will be deemed to have consented for purposes of the Collateral Documents and the Intercreditor Agreements to any of the following amendments, waivers and other modifications to the Collateral Documents and the Intercreditor Agreements:

(1) to add other parties (or any authorized agent thereof or trustee therefor) holding Pari Passu Secured Indebtedness that is Incurred in compliance with the Credit Agreement, this Indenture and the Collateral Documents and (B) to establish under the Intercreditor Agreements that (i) the Liens on any Collateral securing such Pari Passu Secured Indebtedness shall be pari passu with the Liens on such Collateral securing the Obligations under this Indenture and the Notes and junior to the Liens on such Collateral securing any First Priority Lien Obligations and (ii) all proceeds of the Collateral remaining after the First Priority Lien Obligations Payment Date shall be payable to the Collateral Agent and the representative for such Pari Passu Secured Indebtedness on a pro rata basis based on the aggregate outstanding principal amount of Obligations under this Indenture and the Notes and under such Pari Passu Secured Indebtedness, all on the terms provided for in the Intercreditor Agreements as in effect immediately prior to such amendment;

(2) to add other parties (or any authorized agent thereof or trustee therefor) holding First Priority Lien Obligations that is Incurred in compliance with the Credit Agreement, this Indenture and the Collateral Documents and (B) to establish under the Intercreditor Agreements that the Liens on any Collateral securing such Indebtedness shall be First Priority Lien Obligations and senior to the Liens on such Collateral securing any obligations under this Indenture and the Notes, all on the terms provided for in the Intercreditor Agreements in effect immediately prior to such amendment;

 

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(3) to add other parties (or any authorized agent thereof or trustee therefor) holding Junior Lien Collateral Indebtedness that is Incurred in compliance with this Indenture and the Collateral Documents and (B) to establish under the Intercreditor Agreements that the Liens on any Collateral securing such Indebtedness shall be junior to the Liens on such Collateral securing the First Priority Lien Obligations and any obligations under this Indenture and the Notes, all on the terms provided for in the Intercreditor Agreements in effect immediately prior to such amendment;

(4) to effectuate the release of assets included in the Collateral from the Liens securing the Notes in accordance with this Indenture or the Collateral Documents if those assets are owned by Intermediate Holdings or a Note Guarantor and Intermediate Holdings or that Note Guarantor is released from its Intermediate Holdings Guarantee or Note Guarantee in accordance with the terms of this Indenture;

(5) to establish that the Liens on any Collateral securing any Indebtedness replacing the Credit Agreement permitted to be incurred under Section 4.09(b)(1) that represent First Priority Lien Obligations shall be senior to the Liens on such Collateral securing any obligations under this Indenture, the Notes, the Intermediate Holdings Guarantee and the Note Guarantees, which obligations shall continue to be secured on a junior basis on the Collateral; and

(6) upon any cancellation or termination of the Credit Agreement without a replacement or refinancing thereof, to establish that the Collateral shall become senior priority Collateral.

Any such additional party and the administrative agent under the Credit Agreement, the Trustee and the Collateral Agent shall be entitled to conclusively rely upon an Officer’s Certificate certifying that such Indebtedness was issued or borrowed in compliance with the Credit Agreement, this Indenture and the Collateral Documents.

The Collateral Agent shall sign any amendment, waiver or other modification to the Collateral Documents and the Intercreditor Agreements set forth in this Section 9.01(b) if such amendment, waiver or other modification does not adversely affect the rights, duties, liabilities or immunities of the Collateral Agent. In executing any amendment, waiver or other modification to the Collateral Documents and the Intercreditor Agreements set forth in this Section 9.01(b), the Collateral Agent shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon an Officer’s Certificate stating that the execution of such amendment, waiver or other modification is authorized or permitted by the applicable Collateral Document and/or Intercreditor Agreement, as the case may be, and complies with the provisions thereof. Notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel shall be required in connection with the execution by the Collateral Agent of any amendment, waiver or other modification to the Collateral Documents and the Intercreditor Agreements set forth in this Section 9.01(b).

 

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Section 9.02 With Consent of Holders of Notes .

Except as provided below in this Section 9.02, the Issuer, Holdings (with respect to the Holdings Guarantee or this Indenture), Intermediate Holdings (with respect to the Intermediate Holdings Guarantee or this Indenture), any Note Guarantor (with respect to its Note Guarantee or this Indenture), the Trustee and the Collateral Agent may amend or supplement this Indenture, any Note Guarantee, the Holdings Guarantee, the Intermediate Holdings Guarantee and the Notes with the consent of the Holders of at least a majority in principal amount of the Notes (including Additional Notes, if any) then outstanding voting as a single class (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and, subject to Sections 6.02 and 6.04 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Note Guarantees, the Holdings Guarantee, the Intermediate Holdings Guarantee or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) voting as a single class (including consents obtained in connection with the purchase of, or tender offer or exchange offer for, Notes). Sections 2.08 and 2.09 hereof shall determine which Notes are considered to be “outstanding” for the purposes of this Section 9.02.

Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee and Collateral Agent of evidence satisfactory to the Trustee and Collateral Agent of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee and the Collateral Agent shall join with the Issuer, the Note Guarantors, Holdings and Intermediate Holdings in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s or the Collateral Agent’s own rights, duties or immunities under this Indenture or otherwise, in which case each of the Trustee and Collateral Agent may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer shall mail or electronically transmit to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to mail or electronically transmit such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

Without the consent of each affected Holder of Notes, an amendment or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):

(1) reduce the principal amount of such Notes whose Holders must consent to an amendment, supplement or waiver;

 

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(2) reduce the principal of or change the Stated Maturity of any such Note, reduce the premium payable upon redemption or repurchase of any Note or change the time at which any Note may be redeemed under Section 3.07 hereof (other than the notice periods relating to an optional redemption of the Notes, so long as such notice periods comply with DTC’s procedures);

(3) reduce the rate of or change the time for payment of interest on any Note;

(4) waive a Default in the payment of principal of, premium, if any, or interest on the Notes, except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes with respect to a non payment default and a waiver of the payment default that resulted from such acceleration, or in respect of a covenant or provision contained in this Indenture or any Note Guarantee that cannot be amended or modified without the consent of all Holders;

(5) make any Note payable in money other than that stated therein;

(6) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of, premium, if any, or interest on the Notes;

(7) make any change in these amendment and waiver provisions;

(8) impair the right of any Holder to receive payment of principal of, premium, if any, or interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes;

(9) expressly subordinate the Notes, the Intermediate Holdings Guarantee or any Note Guarantees to any other Indebtedness of the Issuer, Intermediate Holdings or any Note Guarantor;

(10) except as expressly permitted by this Indenture, modify the Intermediate Holdings Guarantee or the Note Guarantees of any Significant Subsidiary or the Note Guarantees or any group of Restricted Subsidiaries that, taken together as of the date of the amendment or waiver, would constitute a Significant Subsidiary in any manner adverse to the Holders of the Notes; or

(11) modify the provisions of this Indenture, the Collateral Documents or the Intercreditor Agreements (except as expressly permitted therein) dealing with the application of proceeds of the Collateral in any manner that would adversely affect the Holders of the Notes in any material respect.

In addition, without the consent of Holders of sixty-six and two-thirds percent (66 2/3%) in aggregate principal amount of the Notes outstanding, no amendment, supplement or wavier may modify any Collateral Document or the provisions in this Indenture dealing with

 

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Collateral Documents or application of trust moneys in any matter, taken as a whole, materially adverse to the Holders or otherwise release all or substantially all of the Collateral from the Liens securing the Notes, in each case, other than in accordance with this Indenture, the Collateral Documents or the Intercreditor Agreements.

Section 9.03 [Reserved]

Section 9.04 Revocation and Effect of Consents .

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement, or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date unless the consent of the requisite number of Holders has been obtained.

Section 9.05 Notation on or Exchange of Notes .

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

Section 9.06 Trustee and Collateral Agent to Sign Amendments, etc .

(a) The Trustee or the Collateral Agent, as the case may be, shall sign any amendment, supplement or waiver to this Indenture authorized pursuant to this Article 9 if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee or the Collateral Agent, as the case may be. The Issuer may not sign an amendment, supplement or waiver to this Indenture until its board of directors approves it. In executing any amendment, supplement or waiver to this Indenture, the Trustee and the Collateral Agent shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 15.02 hereof, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or

 

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supplemental indenture is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer, Holdings, Intermediate Holdings and any Note Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03).

(b) The Collateral Agent shall sign any amendment, supplement, consent or waiver authorized pursuant to any of the Collateral Documents or Intercreditor Agreements in accordance with the terms thereof (including, without limitation, without the further consent or agreement of the Holders if so provided in such Collateral Document or Intercreditor Agreement or otherwise in accordance with Section 9.01(b) of this Indenture) if the amendment, supplement, consent or waiver does not adversely affect the rights, duties, liabilities or immunities of the Collateral Agent. The Issuer may not sign an amendment, supplement, consent or waiver to any of the Collateral Documents or Intercreditor Agreements until its board of directors approves such amendment, supplement, consent or waiver. In executing any amendment, supplement, consent or waiver to any of the Collateral Documents or Intercreditor Agreements, the Collateral Agent shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon an Officer’s Certificate stating that the execution of such amendment, supplement, consent or waiver is authorized or permitted by the applicable Collateral Document and/or Intercreditor Agreement, as the case may be, and complies with the provisions thereof. Notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel shall be required in connection with the execution by the Collateral Agent of any amendment, waiver or other modification to the Collateral Documents and the Intercreditor Agreements.

ARTICLE 10

INTERMEDIATE HOLDINGS GUARANTEE AND NOTE GUARANTEES

Section 10.01 Intermediate Holdings Guarantee and Note Guarantee .

Subject to this Article 10, Intermediate Holdings and each of the Note Guarantors hereby, jointly and severally with each other Note Guarantor and Intermediate Holdings, as the case may be, and with Holdings, irrevocably and unconditionally guarantees, on a senior secured basis (Holdings on an unsecured senior subordinated basis), to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that: (a) the principal of, premium, if any, and interest on the Notes shall be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder whether for payment of principal of, premium, if any, or interest, on the Notes and all other monetary obligations of the Issuer under this Indenture and the Notes shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason,

 

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Intermediate Holdings and each Note Guarantor, together with Holdings as described in Article 11, shall be jointly and severally, obligated to pay the same immediately. Intermediate Holdings and each Note Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

Intermediate Holdings and the Note Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, the Holdings Guarantee, the Intermediate Holdings Guarantee, any Note Guarantee or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, Holdings, Intermediate Holdings or any Note Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Intermediate Holdings and each Note Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Intermediate Holdings Guarantee or Note Guarantee, as the case may be, shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.

Intermediate Holdings and each Note Guarantor also agrees to pay, in addition to the amount stated above, any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 10.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, Holdings, Intermediate Holdings, the Note Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer, Holdings, Intermediate Holdings or the Note Guarantors, any amount paid either to the Trustee or such Holder, the Intermediate Holdings Guarantee and this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Intermediate Holdings and each Note Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Intermediate Holdings and each Note Guarantor further agrees that, as between the Note Guarantors, Intermediate Holdings and Holdings, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Intermediate Holdings Guarantee and Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by Intermediate Holdings and the Note Guarantors for the purpose of this Intermediate Holdings Guarantee and Note Guarantee. Intermediate Holdings and the Note Guarantors shall have the right to seek contribution from any non-paying Note Guarantor, Intermediate Holdings or Holdings so long as the exercise of such right does not impair the rights of the Holders under the Intermediate Holdings Guarantee and Note Guarantees.

 

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Each Note Guarantee will be a continuing guarantee and shall:

(1) remain in full force and effect until payment in full of all the guaranteed obligations;

(2) subject to Section 10.06(a), be binding upon each such Note Guarantor and its successors; and

(3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

The Intermediate Holdings will be a continuing guarantee and shall:

(1) remain in full force and effect until payment in full of all the guaranteed obligations;

(2) subject to Section 10.06(b), be binding upon Intermediate Holdings and its successors; and

(3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

The Intermediate Holdings Guarantee and each Note Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer, Holdings, Intermediate Holdings or any Note Guarantor for liquidation or reorganization, should the Issuer, Holdings, Intermediate Holdings or any Note Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s, Holdings’, Intermediate Holdings’ or any other Note Guarantor’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, the Holdings Guarantee, the Intermediate Holdings Guarantee or Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

In case any provision of the Intermediate Holdings Guarantee or any Note Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

The Intermediate Holdings Guarantee or the Note Guarantee issued by Intermediate Holdings or any Note Guarantor, as the case may be, shall be a general senior secured obligation of Intermediate Holdings and such Note Guarantor and shall be pari passu in right of payment with all existing and future Pari Passu Secured Indebtedness of Intermediate Holdings and such Note Guarantor, if any.

 

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Each payment to be made by Intermediate Holdings or a Note Guarantor in respect of its Intermediate Holdings Guarantee or Note Guarantee, as applicable, shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

Section 10.02 Limitation on Liability .

Intermediate Holdings and each Note Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Intermediate Holdings Guarantee and Note Guarantee of Intermediate Holdings or such Note Guarantor, as the case may be, not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to the Intermediate Holdings Guarantee and any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders, Holdings, Intermediate Holdings and the Note Guarantors hereby irrevocably agree that the obligations of Intermediate Holdings and each Note Guarantor shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of Intermediate Holdings and such Note Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of Intermediate Holdings and any other Note Guarantor or Holdings in respect of the obligations of Intermediate Holdings or such other Note Guarantor under this Article 10 or Holdings under Article 11, result in the obligations of Intermediate Holdings or such Note Guarantor under the Intermediate Holdings Guarantee and the Note Guarantee, as the case may be, not being voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. Intermediate Holdings and each Note Guarantor that makes a payment under its Intermediate Holdings Guarantee and Note Guarantee, as the case may be, shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each other Note Guarantor or Intermediate Holdings, as the case may be, and Holdings in an amount equal to Intermediate Holdings’ or such other Note Guarantor’s or Holdings’ pro rata portion of such payment based on the respective net assets of all the Note Guarantors, Intermediate Holdings and Holdings at the time of such payment determined in accordance with GAAP.

Section 10.03 Execution and Delivery .

To evidence its Intermediate Holdings Guarantee or Note Guarantee set forth in Section 10.01 hereof, Intermediate Holdings and each Note Guarantor hereby agrees that this Indenture shall be executed on behalf of Intermediate Holdings or such Note Guarantor by its Chairman, President, its Chief Financial Officer, its Treasurer, its Assistant Treasurer, one of its Vice Presidents or one of its Assistant Vice Presidents.

Intermediate Holdings and each Note Guarantor hereby agrees that its Intermediate Holdings Guarantee or Note Guarantee, as applicable, set forth in Section 10.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Intermediate Holdings Guarantee or Note Guarantee on the Notes.

 

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If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Intermediate Holdings Guarantee and the Note Guarantee shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Intermediate Holdings Guarantee and Note Guarantee set forth in this Indenture on behalf of Intermediate Holdings and the Note Guarantors, as the case may be.

If required by Section 4.15 hereof, the Issuer shall cause any newly created or acquired Restricted Subsidiary to comply with the provisions of Section 4.15 hereof and this Article 10, to the extent applicable.

Section 10.04 Subrogation .

Intermediate Holdings and each Note Guarantor shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by Intermediate Holdings or such Note Guarantor pursuant to the provisions of Section 10.01 hereof; provided that, if an Event of Default has occurred and is continuing, neither Intermediate Holdings nor any Note Guarantor shall be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.

Section 10.05 Benefits Acknowledged .

Intermediate Holdings and each Note Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to its Intermediate Holdings Guarantee or Note Guarantee, as the case may be, are knowingly made in contemplation of such benefits.

Section 10.06 Release .

(a) A Note Guarantee by a Note Guarantor under the Indenture and the Notes, and the obligations of such Note Guarantor under the Collateral Documents and Intercreditor Agreements shall be automatically and unconditionally released and discharged, and no further action by such Note Guarantor, the Issuer, Holdings, Intermediate Holdings, the Trustee or the Collateral Agent is required for the release of such Note Guarantor’s Note Guarantee, upon:

(1) (A) the sale, disposition or other transfer (including through merger or consolidation) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Note Guarantor is no longer a Restricted Subsidiary), of the applicable Note Guarantor if such sale, disposition or other transfer is made in compliance with the applicable provisions of this Indenture;

(B) the Issuer designating such Note Guarantor to be an Unrestricted Subsidiary in accordance with the provisions set forth under Section 4.07 and the definition of “Unrestricted Subsidiary”;

 

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(C) the release or discharge of such Restricted Subsidiary from (x) its guarantee of Indebtedness under the Credit Agreement (including by reason of the termination of the Credit Agreement but only if the Liens on the Notes are also released at such time as described under 14.07) and/or (y) the guarantee of Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer or such Restricted Subsidiary or the repayment of the Indebtedness or Disqualified Stock (except in each case a discharge or release by or as a result of payment under such guarantee) that resulted in the obligation to guarantee the Notes, in the case of each of clauses (x) and (y) if such Note Guarantor would not then otherwise be required to guarantee the Notes pursuant to this Indenture; provided , that if such Person has incurred any Indebtedness or issued any Disqualified Stock in reliance on its status as a Note Guarantor under Section 4.09, such Note Guarantor’s obligations under such Indebtedness or Disqualified Stock, as the case may be, so Incurred are satisfied in full and discharged or are otherwise permitted to be Incurred under Section 4.09; or

(D) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 hereof or the Issuer’s obligations under this Indenture being discharged in accordance with the terms of this Indenture; and

(2) in the case of clause (1)(A) above, the release of such Note Guarantor from its guarantee, if any, of, and all pledges and security, if any, granted in connection with, the Credit Agreement and any other Indebtedness of the Issuer or any Restricted Subsidiary.

In addition, a Note Guarantee will be automatically released upon the applicable Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest securing First Priority Lien Obligations or other exercise of remedies in respect thereof.

(b) The Intermediate Holdings Guarantee under the Indenture and the Notes, and the obligations of Intermediate Holdings under the Collateral Documents and the Intercreditor Agreements, shall be automatically and unconditionally released and discharged, and no further action by Holdings, the Issuer, Intermediate Holdings, the Note Guarantors, the Trustee or the Collateral Agent is required for the release of this Intermediate Holdings Guarantee, upon:

(1) the Issuer ceasing to be a Subsidiary of Intermediate Holdings; provided that any such transaction occurs in compliance with this Indenture;

(2) the release or discharge of Intermediate Holdings from its guarantee of Indebtedness under the Credit Agreement (including by reason of the termination of the Credit Agreement but only if the Liens on the Notes are also released at such time as described under Section 14.07); or

(3) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 hereof or the Issuer’s obligations under this Indenture being discharged in accordance with the terms of this Indenture.

 

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Section 10.07 Securitization Acknowledgement .

(a) For purposes of this Section 10.07, capitalized terms used herein and not otherwise defined herein (unless there shall be a conflict between a term used in this Section 10.07(a) and a term used elsewhere in this Indenture, in which case the term as defined in this Section 10.07(a) shall control solely for purposes of this Section 10.07(a)) shall have the meanings assigned to such terms in the Transfer and Servicing Agreement, or, if not defined therein, as assigned to such terms in the Purchase Agreement or the Receivables Purchase Agreement referred to therein. Subsequent references in this Section 10.07(a) to Apple Ridge Services Corporation (“ ARSC ”), Cartus Corporation (“ Cartus ”) and Cartus Financial Corporation (“ CFC ”) below shall mean and be references to such corporations as they existed as of the Issue Date but shall also include references to any limited liability companies which succeed to the assets and liabilities of such companies in connection with a conversion of any such corporation into a limited liability company.

(b) Holders by their acceptance of Notes entitled to the benefits of this Indenture acknowledge and agree, as follows (which acknowledgement and agreement are part of the consideration for the issuance of the Notes):

(i) Each Holder hereby acknowledges that (A) CFC is a limited purpose corporation whose primary activities are restricted in its certificate of incorporation to purchasing Cartus Purchased Assets (originally referred to as CMSC Purchased Assets) from Cartus pursuant to the Purchase Agreement, making Equity Payments, Equity Loans, Mortgage Payoffs and Mortgage Payments to or on behalf of employees or otherwise purchasing Homes in connection with the Pool Relocation Management Agreements, funding such activities through the sale of CFC Receivables (originally referred to as CMF Receivables) to ARSC, and such other activities as it deems necessary or appropriate in connection therewith, (B) ARSC is a limited purpose corporation whose primary activities are restricted in its certificate of incorporation to purchasing from CFC all CFC Receivables acquired by CFC from Cartus or otherwise originated by CFC, funding such acquisitions through the sale of the CFC Receivables to Apple Ridge Funding LLC (“ ARF ”) and such other activities as it deems necessary or appropriate to carry out such activities, and (C) ARF is a limited purpose limited liability company whose activities are limited in its limited liability company agreement to purchasing the Pool Receivables from ARSC, funding such acquisitions through the issuance of the Notes, pledging such Pool Receivables to The Bank of New York Mellon (formerly known as The Bank of New York) (the “ Indenture Trustee ”) and such other activities as it deems necessary or appropriate to carry out such activities.

(ii) Each Holder hereby acknowledges and agrees that (A) the foregoing transfers are intended to be true and absolute sales as a result of which Cartus has no right, title and interest in and to any of the Cartus Purchased Assets, any Homes acquired by CFC in connection therewith or any CFC Receivables, including any Related Property relating thereto, any proceeds thereof or earnings thereon (collectively, the “ Pool Assets ”), (B) none of CFC, ARSC or ARF is a Loan Party, (C) such Holder is not a creditor of, and has no recourse to, CFC, ARSC or ARF pursuant to the Credit Agreement or any other Loan Document, and (D) such Holder has no lien on or claim, contractual or otherwise, arising

 

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under the Credit Agreement or any other Loan Document to the Pool Assets (whether now existing or hereafter acquired and whether tangible or intangible); provided that nothing herein shall limit any rights the Secured Parties may have to any proceeds or earnings which are transferred from time to time to Cartus by CFC, ARSC or ARF.

(iii) No Holder will institute against or join any other person in instituting against CFC, ARSC or ARF any insolvency proceeding, or solicit, join in soliciting, cooperate with or encourage any motion in support of, any insolvency proceeding involving CFC, ARSC or ARF until one year and one day after the payment in full of all Notes; provided that the foregoing shall not limit the right of any Holder to file any claim in or otherwise take any action (not inconsistent with the provisions of this Section 10.07(a)) permitted or required by applicable law with respect to any insolvency proceeding instituted against CFC, ARSC or ARF by any other person.

(iv) Without limiting the foregoing, in the event of any voluntary or involuntary bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any Federal or state bankruptcy or similar law involving Cartus, CFC, ARSC, ARF or any other Affiliates of Cartus as debtor, or otherwise, the Secured Parties agree that if, notwithstanding the intent of the parties, Cartus is found to have a property interest in the Pool Assets, then, in such event, CFC and its assigns, including the Indenture Trustee, shall have a first and prior claim to the Pool Assets, and any claim or rights the Secured Parties may have to the Pool Assets, contractual or otherwise, shall be subject to the prior claims of this Indenture Trustee and the Noteholders until all amounts owing under this Indenture shall have been paid in full, and the Secured Parties agree to turn over to this Indenture Trustee any amounts received contrary to the provisions of this clause (iv).

(v) Each Holder hereby covenants and agrees that it will not agree to any amendment, supplement or other modification of this Section 10.07(a) without the prior written consent of the Indenture Trustee. Each Holder further agrees that the provisions of this Section 10.07(a) are made for the benefit of, and may be relied upon and enforced by, the Indenture Trustee and that the Indenture Trustee shall be a third party beneficiary of this Section 10.07(a).

ARTICLE 11

HOLDINGS GUARANTEE

Section 11.01 Holdings Guarantee .

Subject to this Article 11, Holdings hereby, jointly and severally with Intermediate Holdings and the Note Guarantors, irrevocably and unconditionally guarantees, on an unsecured senior subordinated basis (Intermediate Holdings and the Note Guarantors on a senior secured basis), to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that: (a) the principal of and interest and premium on the Notes shall be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue

 

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principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder whether for payment of principal of, premium, if any, or interest on the Notes and all other monetary obligations of the Issuer under this Indenture and the Notes shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, Holdings, together with Intermediate Holdings and the Note Guarantors as described in Article 10, shall be jointly and severally obligated to pay the same immediately. Holdings agrees that this is a guarantee of payment and not a guarantee of collection.

Holdings hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, this Indenture, the Intermediate Holdings Guarantee or any Note Guarantee, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, Holdings, Intermediate Holdings or any Note Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Holdings hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Holdings Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.

Holdings also agrees to pay, in addition to the amount stated above, any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 11.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, Holdings, Intermediate Holding, the Note Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer, Holdings, Intermediate Holdings or the Note Guarantors, any amount paid either to the Trustee or such Holder, this Holdings Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Holdings agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Holdings further agrees that, as between Holdings, Intermediate Holdings and the Note Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Holdings Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by Holdings for the purpose of this Holdings Guarantee. Holdings shall have the right to seek contribution from any non-paying Intermediate Holdings or Note

 

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Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Intermediate Holdings Guarantee or the Note Guarantees.

This Holdings Guarantee will be a continuing guarantee and shall:

(1) remain in full force and effect until payment in full of all the applicable guaranteed obligations;

(2) subject to Section 11.06, be binding upon Holdings and its successors; and

(3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

This Holdings Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer, Holdings, Intermediate Holdings or any Note Guarantor for liquidation or reorganization, should the Issuer, Holdings, Intermediate Holdings or any Note Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s, Holdings’, Intermediate Holdings’ or any Note Guarantor’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, the Holdings Guarantee, the Intermediate Holdings Guarantee or Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

In case any provision of this Holdings Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

This Holdings Guarantee shall be a general unsecured senior subordinated obligation of Holdings and shall be subordinated in right of payment to all existing and future Holdings Senior Indebtedness, if any.

Each payment to be made by Holdings in respect of its Holdings Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

Section 11.02 Limitation on Holdings Liability .

Holdings, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Holdings Guarantee not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to this Holdings Guarantee. To effectuate the foregoing intention, the Trustee, the Holders, the Note Guarantors, Intermediate Holdings and Holdings hereby irrevocably agree that the obligations of Holdings shall be limited to the maximum amount as will, after giving effect to

 

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such maximum amount and all other contingent and fixed liabilities of Holdings that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of Holdings, Intermediate Holdings or any of the Note Guarantors in respect of the obligations of Holdings under this Article 11 or Intermediate Holdings and the Note Guarantors under Article 10, result in the obligations of Holdings under this Holdings Guarantee not being voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. If Holdings makes a payment under this Holdings Guarantee, then Holdings shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from Intermediate Holdings and each Note Guarantor in an amount equal to Intermediate Holdings’ or such Note Guarantor’s pro rata portion of such payment based on the respective net assets of Holdings, Intermediate Holdings and each of the Note Guarantors at the time of such payment determined in accordance with GAAP.

Section 11.03 Execution and Delivery .

To evidence the Holdings Guarantee set forth in Section 11.01 hereof, Holdings hereby agrees that this Indenture shall be executed on behalf of Holdings by its Chairman, President, its Chief Financial Officer, its Treasurer, its Assistant Treasurer, one of its Vice Presidents or one of its Assistant Vice Presidents.

Holdings hereby agrees that the Holdings Guarantee set forth in Section 11.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Holdings Guarantee on the Notes.

If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Holdings Guarantee shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Holdings Guarantee set forth in this Indenture on behalf of Holdings.

Section 11.04 Subrogation .

Holdings shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by Holdings pursuant to the provisions of Section 11.01 hereof; provided that, if an Event of Default has occurred and is continuing, Holdings shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.

Section 11.05 Benefits Acknowledged .

Holdings acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to this Holdings Guarantee are knowingly made in contemplation of such benefits.

 

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Section 11.06 Release of Holdings Guarantee .

This Holdings Guarantee shall be automatically and unconditionally released and discharged, and no further action by Holdings, the Issuer, Intermediate Holdings, the Note Guarantors, the Trustee or the Collateral Agent is required for the release of this Holdings Guarantee, upon:

(a) the Issuer ceasing to be a Subsidiary of Holdings; provided that any such transaction occurs in compliance with this Indenture; or

(b) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 hereof or the Issuer’s obligations under this Indenture being discharged in accordance with the terms of this Indenture.

ARTICLE 12

SUBORDINATION OF HOLDINGS GUARANTEE

Section 12.01 Agreement To Subordinate .

Holdings agrees, and each Holder by accepting a Note agrees, that the obligations of Holdings under its Holdings Guarantee are subordinated in right of payment, to the extent and in the manner provided in this Article 12, to the prior payment in full of all future Holdings Senior Indebtedness and that the subordination is for the benefit of and enforceable by the holders of such Holdings Senior Indebtedness. Holdings’ obligations under its Holdings Guarantee shall in all respects rank pari passu in right of payment with all existing and future Holdings Pari Passu Indebtedness and will be senior in right of payment to all existing and future Holdings Subordinated Indebtedness; and only Indebtedness of Holdings that is Holdings Senior Indebtedness shall rank senior to the obligations of Holdings under its Holdings Guarantee in accordance with the provisions set forth herein. All provisions of this Article 12 shall be subject to Section 12.12.

Section 12.02 Liquidation, Dissolution, Bankruptcy .

Upon any payment or distribution of the assets of Holdings to creditors upon a total or partial liquidation or a total or partial dissolution of Holdings or in a reorganization of or similar proceeding relating to Holdings or its property:

(1) the holders of Holdings Senior Indebtedness shall be entitled to receive payment in full in cash of such Holdings Senior Indebtedness (including interest accruing after, or which would accrue but for, the commencement of any such proceeding at the rate specified in the applicable Holdings Senior Indebtedness, whether or not a claim for such interest would be allowed) before Holders of the Notes shall be entitled to receive any payment; and

(2) until the Holdings Senior Indebtedness is paid in full in cash, any payment or distribution to which Holders of the Notes would be entitled but for the subordination provisions of this Article 12 shall be made to holders of such Holdings Senior Indebtedness as their interests may appear, except that Holders of the Notes may receive and retain (x) so long as

 

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the Holders are not in the same or a higher class of creditors in such liquidation, dissolution or proceeding as the holders of the Holdings Senior Indebtedness, shares of stock and any debt securities that are subordinated to Holdings Senior Indebtedness to at least the same extent as the Holdings Guarantee (such stock and debt securities referred to herein as “ Holdings Permitted Junior Securities ”) and (y) payments or deposits made pursuant to Article 8 or Article 13 so long as, on the date or dates the respective amounts were paid into the trust, such payments were made with respect to the Notes without violating the subordination provisions described herein; and

(3) if a distribution is made to Holders of the Notes that, due to the subordination provisions, should not have been made to them, such Holders of the Notes are required to hold it in trust for the holders of Holdings Senior Indebtedness and pay it over to them as their interests may appear.

Section 12.03 Default on Holdings Senior Indebtedness .

Holdings shall not make any payment pursuant to its Holdings Guarantee (or pay any other Obligations relating to its Holdings Guarantee, including fees, costs, expenses, indemnities and rescission or damage claims) and may not purchase, redeem or otherwise retire any Notes (collectively, “ pay its Holdings Guarantee ”) (except that Holders of the Notes may receive and retain (x) Holdings Permitted Junior Securities and (y) payments or deposits made pursuant to Article 8 or Article 13), if either of the following occurs (a “ Holdings Payment Default ”):

(1) a default in the payment of the principal of, premium, if any, or interest on any Holdings Senior Indebtedness occurs and is continuing or any other amount owing in respect of any Holdings Senior Indebtedness is not paid when due, or

(2) any other default on Holdings Senior Indebtedness occurs and the maturity of such Holdings Senior Indebtedness is accelerated in accordance with its terms,

unless, in either case, the Holdings Payment Default has been cured or waived and any such acceleration has been rescinded or such Holdings Senior Indebtedness has been paid in full in cash; provided , however , that Holdings shall be entitled to pay its Holdings Guarantee without regard to the foregoing if Holdings and the Trustee receive written notice approving such payment from the Holdings Representatives of all Holdings Senior Indebtedness with respect to which the Holdings Payment Default has occurred and is continuing.

During the continuance of any default (other than a Holdings Payment Default) (a “ Holdings Non-Payment Default ”) with respect to any Holdings Senior Indebtedness pursuant to which the maturity thereof may be accelerated without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, Holdings shall not pay its Holdings Guarantee (except in the form of Holdings Permitted Junior Securities) for a period (a “ Holdings Guarantee Payment Blockage Period ”) commencing upon the receipt by the Trustee (with a copy to Holdings and the Issuer) of written notice (a “ Holdings Guarantee Blockage Notice ”) of such Holdings Non-Payment Default from the Holdings Representative of such Holdings Senior Indebtedness specifying an election to effect a Holdings

 

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Guarantee Payment Blockage Period and ending 179 days thereafter unless earlier terminated as provided below. The Holdings Guarantee Payment Blockage Period shall end earlier if such Holdings Guarantee Payment Blockage Period is terminated (i) by written notice to the Trustee, Holdings and the Issuer from the Person or Persons who gave such Holdings Guarantee Blockage Notice; (ii) because the default giving rise to such Holdings Guarantee Blockage Notice is cured, waived or otherwise no longer continuing; or (iii) because such Holdings Senior Indebtedness has been repaid in full in cash.

Notwithstanding the provisions described in the immediately preceding paragraph (but subject to the provisions contained in the first paragraph of this Section 12.03 and Section 12.02 hereof), unless the holders of such Holdings Senior Indebtedness or the Holdings Representative of such Holdings Senior Indebtedness shall have accelerated the maturity of such Holdings Senior Indebtedness or a Holdings Payment Default exists, Holdings shall be permitted to resume paying its Holdings Guarantee after the end of such Holdings Guarantee Payment Blockage Period. Holdings shall not be subject to more than one Holdings Guarantee Payment Blockage Period in any consecutive 360-day period, irrespective of the number of defaults with respect to Holdings Senior Indebtedness during such period. However, in no event shall the total number of days during which any Holdings Guarantee Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate during any consecutive 360-day period. Notwithstanding the foregoing, however, no default that existed or was continuing on the date of delivery of any Holdings Guarantee Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Holdings Guarantee Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenants during the period after the date of delivery of a Holdings Guarantee Blockage Notice, that, in either case, would give rise to a Holdings Non-Payment Default pursuant to any provisions of the Holdings Senior Indebtedness under which a Holdings Non-Payment Default previously existed or was continuing shall constitute a new Holdings Non-Payment Default for this purpose).

Section 12.04 Demand for Payment .

If payment of the Notes is accelerated because of an Event of Default and a demand for payment is made on Holdings pursuant to Article 11 hereof, the Issuer, the Trustee or Holdings shall promptly notify the holders of the Holdings Senior Indebtedness or the Holdings Representative of such Holdings Senior Indebtedness of such demand; provided that any failure to give such notice shall have no effect whatsoever on the provisions of this Article 12. If any Holdings Senior Indebtedness is outstanding, Holdings may not pay its Holdings Guarantee until five Business Days after the Holdings Representatives of all such Holdings Senior Indebtedness receive notice of such acceleration and, thereafter, may pay its Holdings Guarantee only if this Indenture otherwise permits payment at that time.

Section 12.05 When Distribution Must Be Paid Over .

If a distribution is made to Holders that, due to the subordination provisions, should not have been made to them, such Holders are required to hold it in trust for the holders of Holdings Senior Indebtedness and pay it over to them as their interests may appear.

 

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Section 12.06 Subrogation .

After all Holdings Senior Indebtedness is paid in full and until the Notes are paid in full, Holders shall be subrogated to the rights of holders of such Holdings Senior Indebtedness to receive distributions applicable to such Holdings Senior Indebtedness. A distribution made under this Article 12 to holders of such Holdings Senior Indebtedness which otherwise would have been made to Holders is not, as between Holdings and Holders, a payment by Holdings on such Holdings Senior Indebtedness.

Section 12.07 Relative Rights .

This Article 12 defines the relative rights of Holders and holders of Holdings Senior Indebtedness. Nothing in this Indenture shall:

(1) impair, as between Holdings and Holders, the obligation of Holdings, which is absolute and unconditional, to make payments under its Holdings Guarantee in accordance with its terms;

(2) prevent the Trustee or any Holder from exercising its available remedies upon a default by Holdings under its obligations with respect to its Holdings Guarantee, subject to the rights of holders of Holdings Senior Indebtedness to receive payments or distributions otherwise payable to Holders and such other rights of such holders of Holdings Senior Indebtedness as set forth herein; or

(3) affect the relative rights of Holders and creditors of Holdings other than their rights in relation to holders of Holdings Senior Indebtedness.

Section 12.08 Subordination May Not Be Impaired by Holdings .

No right of any holder of Holdings Senior Indebtedness to enforce the subordination of the obligations of Holdings under its Holdings Guarantee shall be impaired by any act or failure to act by Holdings or by its failure to comply with this Indenture.

Section 12.09 Rights of Trustee and Paying Agent .

Notwithstanding Section 12.03 hereof, the Trustee or any Paying Agent may continue to make payments on the Notes and shall not be charged with knowledge of the existence of facts that would prohibit the making of any payments unless, not less than three Business Days prior to the date of such payment, a Trust Officer at the Corporate Trust Office of the Trustee receives notice satisfactory to him that payments may not be made under this Article 12; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 7.01, shall be entitled in all respects to assume that no such facts exist; provided , however , that if a Trust Officer of the Trustee shall not have received, at least three Business Days prior to the date upon which by the terms hereof any such money may become payable for any purpose (including, without limitation, the payment of principal, premium, if any, and interest, the redemption price or the Change of Control Payment, as the case may be, in respect of any Note), the notice with respect to such money provided for in this Section 12.09 then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and

 

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authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within three Business Days prior to such date. Holdings, a Holdings Representative, a holder of Holdings Senior Indebtedness or any trustee of or agent thereof shall be entitled to give the notice; provided , however , that, if an issue of Holdings Senior Indebtedness has a Holdings Representative, only the Holdings Representative shall be entitled to give the notice.

The Trustee in its individual or any other capacity shall be entitled to hold Holdings Senior Indebtedness with the same rights it would have if it were not Trustee. The Registrar and the Paying Agent shall be entitled to do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article 12 with respect to any Holdings Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of such Holdings Senior Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing in this Article 12 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof or any other Section of this Indenture.

Section 12.10 Distribution or Notice to Holdings Representative .

Whenever a distribution is to be made or a notice given to holders of Holdings Senior Indebtedness the distribution may be made and the notice given to their Holdings Representative (if any).

Section 12.11 Article 12 Not To Prevent Events of Default or Limit Right To Demand Payment .

The failure of Holdings to make a payment pursuant to the Holdings Guarantee by reason of any provision in this Article 12 shall not be construed as preventing the occurrence of a default by Holdings under the Holdings Guarantee. Nothing in this Article 12 shall have any effect on the right of the Holders or the Trustee to make a demand for payment on Holdings pursuant to Article 11 hereof.

Section 12.12 Trust Moneys Not Subordinated .

Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of Government Obligations held in trust by the Trustee for the payment of principal of and interest on the Notes pursuant to Article 8 or Article 13 hereof shall not be subordinated to the prior payment of any Holdings Senior Indebtedness or subject to the restrictions set forth in this Article 12, and none of the Holders shall be obligated to pay over any such amount to Holdings or any holder of Holdings Senior Indebtedness or any other creditor of Holdings, provided that the subordination provisions of this Article 12 were not violated at the time the applicable amounts were deposited in trust pursuant to Article 8 or Article 13 hereof, as the case may be.

Section 12.13 Trustee Entitled To Rely .

Upon any payment or distribution pursuant to this Article 12, the Trustee and the Holders shall be entitled to conclusively rely (a) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 12.02 hereof

 

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are pending, (b) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (c) upon the Holdings Representatives of Holdings Senior Indebtedness for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of such Holdings Senior Indebtedness and other Indebtedness of Holdings, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 12. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Holdings Senior Indebtedness to participate in any payment or distribution pursuant to this Article 12, the Trustee shall be entitled to request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Holdings Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article 12, and, if such evidence is not furnished, the Trustee shall be entitled to defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 hereof shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article 12.

Section 12.14 Trustee To Effectuate Subordination .

A Holder by its acceptance of a Note agrees to be bound by this Article 12 and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be necessary or appropriate to effectuate the subordination between the Holders and the holders of Holdings Senior Indebtedness as provided in this Article 12 and appoints the Trustee as attorney-in-fact for any and all such purposes.

Section 12.15 Trustee Not Fiduciary for Holders of Holdings Senior Indebtedness .

The Trustee shall not be deemed to owe any fiduciary duty to the holders of Holdings Senior Indebtedness and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders or Holdings or any other Person, money or assets to which any holders of Holdings Senior Indebtedness shall be entitled by virtue of this Article 12 or otherwise.

Section 12.16 Reliance by Holders of Holdings Senior Indebtedness on Subordination Provisions .

Each Holder by accepting a Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Holdings Senior Indebtedness whether such Holdings Senior Indebtedness was created or acquired before or after the issuance of the Notes, to acquire and continue to hold, or to continue to hold, such Holdings Senior Indebtedness and such holder of such Holdings Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Holdings Senior Indebtedness.

Without in any way limiting the generality of the foregoing paragraph, the holders of Holdings Senior Indebtedness may, at any time and from time to time, without the consent of

 

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or notice to the Trustee or the Holders, without incurring responsibility to the Trustee or the Holders and without impairing or releasing the subordination provided in this Article 12 or the obligations hereunder of the Holders to the holders of the Holdings Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Holdings Senior Indebtedness, or otherwise amend or supplement in any manner Holdings Senior Indebtedness, or any instrument evidencing the same or any agreement under which Holdings Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Holdings Senior Indebtedness; (iii) release any Person liable in any manner for the payment or collection of Holdings Senior Indebtedness; and (iv) exercise or refrain from exercising any rights against Holdings and any other Person.

ARTICLE 13

SATISFACTION AND DISCHARGE

Section 13.01 Satisfaction and Discharge .

(a) This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights of transfer or exchange of Notes, as expressly provided for in this Indenture) as to all outstanding Notes when either: (i) all Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust) have been delivered to the Trustee for cancellation; or (ii) all Notes (a) have become due and payable, (b) will become due and payable at their Stated Maturity within one year or (c) if redeemable at the option of the Issuer, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer has irrevocably deposited or caused to be deposited with the Trustee, as trust funds in trust solely for the benefit of the Holders of the Notes, cash in U.S. dollars, U.S. dollar Government Obligations, or a combination thereof, in such amounts as will be sufficient in the written opinion of a firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Dollar-denominated Government Obligations have been so deposited) without consideration of any reinvestment of interest to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal of, premium, if any, and accrued interest on the Notes to the date of deposit together with irrevocable instructions from the Issuer directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

(b) the Issuer, Holdings, Intermediate Holdings and/or the Note Guarantors have paid or caused to be paid all other sums payable under this Indenture; and

(c) the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.

 

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Upon discharge of this Indenture, the Collateral Documents and the Intercreditor Agreements will automatically terminate and cease to be of further effect and all Liens on the Collateral granted under the Collateral Documents will be released.

ARTICLE 14

COLLATERAL AND SECURITY

Section 14.01 Collateral .

(a) The due and punctual payment of the principal of, premium, if any, and interest on the Notes, the Intermediate Holdings Guarantee and the Note Guarantees when and as the same shall be due and payable, whether on an Interest Payment Date, at maturity, by acceleration, repurchase, redemption or otherwise, interest on the overdue principal of and interest (to the extent permitted by law), if any, on the Notes, the Intermediate Holdings Guarantee and the Note Guarantees and performance of all other obligations under this Indenture, including, without limitation, the obligations of the Issuer set forth in Section 7.07, and the Notes, Intermediate Holdings Guarantee and the Note Guarantees and the Intercreditor Agreement and the Collateral Documents, shall be secured by Lien on the Collateral on a junior basis to the First Priority Lien Obligations and on a senior basis to the Second Priority Lien Obligations (subject to Permitted Liens), as provided in this Indenture, the Collateral Documents and the Intercreditor Agreements to which the Issuer, Intermediate Holdings and the Note Guarantors, as the case may be, have entered into simultaneously with the execution of this Indenture and will be secured by all of the Collateral pledged pursuant to the Collateral Documents hereafter delivered as required or permitted by this Indenture, the Collateral Documents and the Intercreditor Agreements. The Trustee, for the benefit of the Holders, hereby appoints The Bank of New York Mellon Trust Company, N.A. as the initial Collateral Agent and the Collateral Agent is hereby authorized and directed to execute and deliver the Collateral Documents and the Intercreditor Agreements. The Issuer, Intermediate Holdings and the Note Guarantors hereby agree that the Collateral Agent shall hold the Collateral in trust for the benefit of all of the Holders and the Trustee, in each case pursuant to the terms of the Collateral Documents and the Intercreditor Agreements.

(b) Each Holder, by its acceptance of any Notes, the Intermediate Holdings Guarantee and the Note Guarantees, consents and agrees to the terms of the Collateral Documents and the Intercreditor Agreements (including, without limitation, the provisions providing for foreclosure and release of Collateral and the automatic amendments, supplements, consents, waivers and other modifications thereto without the consent of the Holders) as the same may be in effect or may be amended from time to time in accordance with their terms and this Indenture and authorizes and directs the Collateral Agent to perform its obligations and exercise its rights under the Collateral Documents and the Intercreditor Agreements in accordance therewith.

(c) The Trustee and each Holder, by accepting the Notes, the Intermediate Holdings Guarantee and the Note Guarantees, acknowledge that, as more fully set forth in the Collateral Documents and the Intercreditor Agreements, the Collateral as now or hereafter constituted shall be held for the benefit of all the Holders and the Trustee, and that the Lien of

 

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this Indenture and the Collateral Documents in respect of the Trustee and the Holders is subject to and qualified and limited in all respects by the Collateral Documents and the Intercreditor Agreements and actions that may be taken thereunder.

Section 14.02 Maintenance of Collateral .

The Issuer, Intermediate Holdings and the Note Guarantors shall (a) maintain the Collateral in good, safe and insurable operating order, condition and repair; (b) pay all real estate and other taxes (except such as are contested in good faith and by appropriate negotiations or proceedings); and (c) maintain in full force and effect all permits and certain insurance coverages, except, in each case, where the failure to do so would not reasonably be expected to have a material adverse effect on the business, property, operations or condition of Intermediate Holdings, the Issuer and its Restricted Subsidiaries (taken as a whole) or the validity or enforceability of this Indenture, the Collateral Documents and the Intercreditor Agreements.

Section 14.03 Impairment of Collateral .

Subject to the rights of the holders of any senior Liens and Section 14.07, the Issuer shall not, and shall not permit Intermediate Holdings or any of the Restricted Subsidiaries to, take or knowingly or negligently omit to take, any action which action or omission would or could reasonably be expected to have the result of materially impairing the security interest with respect to the Collateral for the benefit of the Trustee and the Holders, unless such action or failure to take action is otherwise permitted by this Indenture, the Intercreditor Agreements or the Collateral Documents.

Section 14.04 Further Assurances .

The Issuer, Intermediate Holdings and the Note Guarantors shall, at their sole expense, execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions which may be necessary, including those the Collateral Agent may from time to time reasonably request, to create, better assure, preserve, protect, defend and perfect the security interest and the rights and remedies created under the Collateral Documents for the benefit of the Holders of the Notes and the Trustee (subject to Permitted Liens). Such security interests and Liens will be created under the Collateral Documents and, to the extent necessary, other security agreements and other instruments and documents in form and substance reasonably satisfactory to the Collateral Agent.

Section 14.05 After-Acquired Property .

From and after the Issue Date, if the Issuer, Intermediate Holdings or any Note Guarantor acquires any property or asset constituting Collateral, including any Material Real Property, it must as promptly as practicable execute and deliver such security instruments, financing statements, mortgages and deeds of trust (which are expected to be in substantially the same form as those with respect to the First Priority Lien Obligations or Second Priority Lien Obligations, if then outstanding) and, with respect to any Material Real Property, deliver such title insurance policies and certificates and opinions of counsel and surveys and title insurance policies as required under Section 14.06, as are required under this Indenture, the Intercreditor

 

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Agreements and the Collateral Documents to vest in the Collateral Agent a perfected security interest junior in priority to the First Priority Lien Obligations and senior in priority to the Second Priority Lien Obligations (subject to Permitted Liens) upon such property or asset as security for the Notes, the Intermediate Holdings Guarantee and the Note Guarantees and as may be necessary to have such property or asset added to the Collateral and thereupon all provisions of this Indenture relating to the Collateral shall be deemed to relate to such after-acquired Collateral to the same extent and with the same force and effect.

Section 14.06 Real Estate Mortgages and Filings .

With respect to any fee interest in Material Real Property by the Issuer, Intermediate Holdings or a Note Guarantor on the Issue Date, or acquired by the Issuer, Intermediate Holdings or a Note Guarantor after the Issue Date that forms a part of the Collateral which is required to be mortgaged to the Collateral Agent (individually and collectively, the “ Premises ”), within 60 days after the Issue Date, or as promptly as reasonably practicable but in no event more than 60 days from the date of acquisition, as applicable, the Issuer, Intermediate Holdings or the applicable Note Guarantor shall deliver to the Collateral Agent such mortgages, deeds of trust, surveys, certificates, title insurance policies, legal opinions and other instruments as are required by the holders of the First Priority Lien Obligations or Second Priority Lien Obligations, if then outstanding (and to the extent, and substantially in the form, delivered to holders of the First Priority Lien Obligations or Second Priority Lien Obligations (but no greater scope)), and if neither is then outstanding:

(a) the Issuer, Intermediate Holdings or the applicable Note Guarantor shall deliver to the Collateral Agent, as mortgagee or beneficiary, as applicable, for the ratable benefit of itself and the Holders, (i) fully executed counterparts of Mortgages duly executed by the Issuer, Intermediate Holdings or such Note Guarantor, delivered by the record owner of such Premises and suitable for recording or filing and (ii) such other documents including, but not limited to, any consents, agreements and confirmations of third parties, as the Collateral Agent may reasonably request with respect to any such Mortgage or Premises;

(b) the Collateral Agent shall have received a policy or policies or marked-up unconditional binder of title insurance, as applicable, paid for by the Issuer, issued by a nationally recognized title insurance company insuring the Lien of such Mortgage as a valid first-priority Lien (subject to Permitted Liens) on the applicable Premises described therein, together with such customary endorsements, coinsurance and reinsurance as the Collateral Agent may reasonably request; and

(c) the Issuer shall, or shall cause Intermediate Holdings or the Note Guarantors to, deliver to the Collateral Agent such surveys (or any updates or affidavits that the title company may reasonably require in connection with the issuance of the title insurance policies) together with such local counsel opinions and opinions of counsel in the jurisdiction where the owner of such Premises is organized as the Collateral Agent and its counsel shall reasonably request.

 

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Section 14.07 Release of Liens on the Collateral .

(a) The Liens on the Collateral will be released with respect to the Notes, the Intermediate Holdings Guarantee and the Note Guarantees, as applicable:

 

  (1) in whole, upon payment in full of the principal of, accrued and unpaid interest, including premium, if any, on the Notes;

 

  (2) in whole, upon satisfaction and discharge of this Indenture in accordance with Article 13;

 

  (3) in whole, upon a legal defeasance or covenant defeasance as set forth under Article 8;

 

  (4) in whole or in part, as to any asset constituting Collateral (A) if all other Liens on that asset securing the First Priority Lien Obligations, Pari Passu Secured Indebtedness and Junior Lien Collateral Indebtedness then secured by that asset (including all commitments thereunder) are released or will be released simultaneously therewith or (B) otherwise in accordance with, and as expressly provided for under, the Collateral Documents, the Intercreditor Agreements and this Indenture;

 

  (5) with the consent of Holders of sixty-six and two-thirds percent (66 2/3%) in aggregate principal amount of the Notes, including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, Notes;

 

  (6) with respect to assets of Intermediate Holdings or a Note Guarantor upon release of Intermediate Holdings from its Intermediate Holdings Guarantee or such Note Guarantor from its Note Guarantee in accordance with Article 10; and

 

  (7) to enable the disposition of property or other assets that constitute Collateral to the extent not prohibited by Section 4.10.

(b) The Issuer and each Note Guarantor will furnish to the Trustee and the Collateral Agent, prior to each proposed release of Collateral pursuant to Section 14.07(a)(1) through (7) or pursuant to the Collateral Documents:

 

  (1) an Officer’s Certificate requesting such release;

 

  (2) an Officer’s Certificate to the effect that all conditions precedent provided for in this Indenture and the Collateral Documents to such release have been complied with;

 

  (3) solely in the case of a release described in Section 14.07(a)(1) through (5), an Opinion of Counsel in accordance with Section 15.02(ii); and

 

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  (4) a form of such release (which release shall be in form reasonably satisfactory to the Trustee and shall provide that the requested release is without recourse or warranty to the Trustee).

(c) Upon compliance by the Issuer, Intermediate Holdings or the Note Guarantors, as the case may be, with the conditions precedent set forth above, and if required by this Indenture upon delivery by the Issuer or Intermediate Holdings or such Note Guarantor to the Trustee an Opinion of Counsel to the effect that such conditions precedent have been complied with, the Trustee or the Collateral Agent shall promptly cause to be released and reconveyed to the Issuer, Intermediate Holdings or the relevant Note Guarantor, as the case may be, the released Collateral, and take all other actions reasonably requested by the Issuer in connection therewith.

(d) Notwithstanding the foregoing, if (x) the Liens securing the First Priority Lien Obligations, Pari Passu Secured Indebtedness and Junior Lien Collateral Indebtedness are released in connection with the repayment (including cash collateralization of letters of credit) of the First Priority Lien Obligations, Pari Passu Secured Indebtedness and Junior Lien Collateral Indebtedness in full and termination of the commitments thereunder and (y) at the time of such release of the Liens securing the First Priority Lien Obligations, Pari Passu Secured Indebtedness and Junior Lien Collateral Indebtedness, the Notes do not have Investment Grade Ratings from both Rating Agencies after giving effect to such release, the Liens on the Collateral securing the Notes will not be released, except to the extent the Collateral or any portion thereof was disposed of in order to repay the First Priority Lien Obligations, Pari Passu Secured Indebtedness and Junior Lien Collateral Indebtedness secured by the Collateral, and thereafter, the Trustee (acting at the direction of the holders of a majority of outstanding principal amount of Notes) will have the right to direct the Collateral Agent to exercise remedies and to take other actions with respect to the Collateral. From and after any such time when all the Liens securing the First Priority Lien Obligations, Pari Passu Secured Indebtedness and Junior Lien Collateral Indebtedness are released but the Liens on the Collateral securing the Notes remain in existence, if the Issuer, Intermediate Holdings or any Note Guarantor acquires any property or asset constituting Collateral, it shall execute and deliver such security instruments, financing statements, mortgages, deeds of trust and certificates and opinions of counsel (which are expected to be in substantially the same form as those executed and delivered with respect to the First Priority Lien Obligations, Pari Passu Secured Indebtedness and Junior Lien Collateral Indebtedness immediately prior to such release, if any) and, with respect to Material Real Property, deliver such title insurance policies, certificates, opinions of counsel and surveys as required under the Section 14.06, as are required under this Indenture and the Collateral Documents to vest in the Collateral Agent a perfected security interest with the same priority as the other Collateral upon such property or asset as security for the Notes (subject to Permitted Liens), the Intermediate Holdings Guarantee and the Note Guarantees and as may be necessary to have such property or asset added to the Collateral and thereupon all provisions of the Indenture relating to the Collateral shall be deemed to relate to such after-acquired property or asset to the same extent and with the same force and effect.

If, after the Collateral is released in full as contemplated by the Intercreditor Agreements and, thereafter, the Issuer subsequently incurs First Priority Lien Obligations that are secured by Liens on assets of the Issuer, Intermediate Holdings or any Note Guarantor of the

 

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type constituting Collateral (other than Excluded Property), then the Issuer, Intermediate Holdings and the Note Guarantors shall be required to secure the Notes, the Intermediate Holdings Guarantee and the Note Guarantees, as applicable, at such time by a Lien on the Collateral on a junior basis to the First Priority Lien Obligations and on a senior basis to the Second Priority Lien Obligations (subject to Permitted Liens) to the same extent provided by the Collateral Documents and subject to an intercreditor agreement that provides the administrative agent, collateral agent or other representative under such new First Priority Lien Obligations substantially the same rights and powers as afforded under the Intercreditor Agreements entered into on the Issue Date.

Section 14.08 Authorization of Actions to be Taken by the Trustee or the Collateral Agent Under the Collateral Documents and the Intercreditor Agreement .

(a) Subject to the provisions of Article 7 of this Indenture and the provisions of the Collateral Documents and the Intercreditor Agreements, each of the Trustee or the Collateral Agent may (but shall in no event be required to), in its sole discretion and without the consent of the Holders, on behalf of the Holders, take all actions it deems necessary or appropriate in order to (i) enforce any of its rights or any of the rights of the Holders under the Collateral Documents and the Intercreditor Agreements and (ii) collect and receive any and all amounts payable in respect of the Collateral in respect of the obligations of the Issuer, Intermediate Holdings and the Note Guarantors hereunder and thereunder. Subject to the provisions of the Collateral Documents and the Intercreditor Agreements, the Trustee or the Collateral Agent shall have the power, but not the obligation, to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts that may be unlawful or in violation of the Collateral Documents, the Intercreditor Agreements or this Indenture, and such suits and proceedings as the Trustee or the Collateral Agent may deem expedient to preserve or protect its interest and the interests of the Holders in the Collateral (including the power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest hereunder or be prejudicial to the interests of the Holders or the Trustee).

(b) The Trustee or the Collateral Agent shall not be responsible for the existence, genuineness or value (or diminution of value) of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, except to the extent such action or omission constitutes negligence, bad faith or willful misconduct on the part of the Trustee or the Collateral Agent, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of the Issuer to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. The Trustee or the Collateral Agent shall have no responsibility for recording, filing, re-recording or refiling any financing statement, continuation statement, document, instrument or other notice in any public office at any time or times or to otherwise take any action to perfect or maintain the perfection of any security interest granted to it under the Collateral Documents or

 

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otherwise. Beyond the exercise of reasonable care in the custody thereof, the Trustee and the Collateral Agent shall have no duty as to any Collateral in their possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto. The Trustee and the Collateral Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in their possession if the Collateral is accorded treatment substantially equal to that which they accord their own property and shall not be liable or responsible for any loss or diminution in the value of any of the Collateral by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Trustee or the Collateral Agent, as the case may be, in good faith. The Trustee and the Collateral Agent shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Indenture, the Collateral Documents or the Intercreditor Agreement by the Issuer, Holdings, Intermediate Holdings, the Note Guarantors, Company or the First Priority Agent.

(c) Where any provision of this Indenture requires that additional property or assets be added to the Collateral, the Issuer, Intermediate Holdings and each Note Guarantor, as applicable, shall deliver to the Trustee or the Collateral Agent the following:

 

  (1) a request from the Issuer that such Collateral be added;

 

  (2) the form of instrument adding such Collateral, which, based on the type and location of the property subject thereto, shall be in substantially the form of the applicable Collateral Documents entered into on the date of this Indenture, with such changes thereto as the Issuer shall consider appropriate, or in such other form as the Issuer shall deem proper; provided that any such changes or such form are administratively satisfactory to the Trustee or the Collateral Agent;

 

  (3) an Officers’ Certificate to the effect that all conditions precedent provided for in this Indenture to the addition of such Collateral have been complied with; and

 

  (4) such financing statements, if any, as the Issuer shall deem necessary to perfect the Collateral Agent’s security interest in such Collateral.

Section 14.09 Information Regarding Collateral .

(a) The Issuer will furnish to the Collateral Agent, with respect to the Issuer, Intermediate Holdings or any Note Guarantor, promptly (and in any event within 30 days of such change) written notice of any change in such Person’s (i) corporate or organization name, (ii) jurisdiction of organization or formation, (iii) identity or corporate structure or (iv) organizational identification number. The Issuer, Intermediate Holdings and the Note Guarantors will agree not to effect or permit any change referred to in the preceding sentence unless all filings have been made, or will have been made within any applicable statutory period, under the Uniform Commercial Code and any other applicable laws that are required in the Collateral Documents in order for the Collateral to be made subject to the Lien of the Collateral Agent under the Collateral Documents in the manner and to the extent required by this Indenture or any

 

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of the Collateral Documents and shall take all necessary action so that such Lien is perfected with the same priority as immediately prior to such change to the extent required by the Collateral Documents. The Issuer also agrees promptly to notify the Collateral Agent if any material portion of the Collateral is damaged, destroyed or condemned.

(b) If at any time after the Issue Date, the Issuer delivers to the agent or representative of the holders of the First Priority Lien Obligations, Pari Passu Secured Indebtedness or Junior Lien Collateral Indebtedness, an update to the perfection certificate previously delivered to any such agent or representative, then the Issuer shall promptly deliver such update to each of the Trustee and the Collateral Agent.

Section 14.10 Collateral Documents and Intercreditor Agreements .

The provisions in this Indenture relating to Collateral are subject to the provisions of the Collateral Documents and the Intercreditor Agreements. The Issuer, Intermediate Holdings, the Note Guarantors, the Trustee and the Collateral Agent acknowledge and agree to be bound by the provisions of the Collateral Documents and the Intercreditor Agreements.

Section 14.11 No Liability for Clean-up of Hazardous Materials .

In the event that the Trustee or Collateral Agent is required to acquire title to an asset for any reason, or take any managerial action of any kind in regard thereto, in order to carry out any fiduciary or trust obligation for the benefit of another, which in the Trustee’s or the Collateral Agent’s sole discretion may cause it to be considered an “owner or operator” under the provisions of the Comprehensive Environmental Response, Compensation and Liability Act (“ CERCLA ”), 42 U.S.C. §9601, et seq., or otherwise cause it to incur liability under CERCLA or any other federal, state or local law, the Trustee and the Collateral Agent reserve the right, instead of taking such action, to either resign or arrange for the transfer of the title or control of the asset to a court-appointed receiver. Neither the Trustee nor the Collateral Agent shall be liable to any person for any environmental claims or contribution actions under any federal, state or local law, rule or regulation by reason of the Trustee’s or the Collateral Agent’s actions and conduct as authorized, empowered and directed hereunder or under the Collateral Documents or the Intercreditor Agreements or relating to the discharge, release or threatened release of hazardous materials into the environment. If at any time it is necessary or advisable for the Collateral to be possessed, owned, operated or managed by any person other than the Issuer, Holdings, Intermediate Holdings or any Note Guarantor, a majority in interest of the Holders shall direct the Trustee or the Collateral Agent to appoint an appropriately qualified person who they shall designate to possess, own, operate or manage, as the case may be, the Collateral.

 

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ARTICLE 15

MISCELLANEOUS

Section 15.01 Notices .

Any notice or communication by the Issuer, Holdings, Intermediate Holdings, any Note Guarantor, the Trustee or the Collateral Agent to the others is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), fax or overnight air courier guaranteeing next day delivery, to the others’ addresses:

If to the Issuer, Holdings, Intermediate Holdings and/or any Note Guarantor:

c/o Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

If to the Trustee:

The Bank of New York Mellon Trust Company, N.A.

525 William Penn Place, 38 th Floor

Pittsburgh, Pennsylvania 15259

Fax No.: (412) 234-7535

Attention: Corporate Trust Administration

If to the Collateral Agent:

The Bank of New York Mellon Trust Company, N.A.

525 William Penn Place, 38 th Floor

Pittsburgh, Pennsylvania 15259

Fax No.: (412) 234-7535

Attention: Corporate Trust Administration

The Issuer, Holdings, Intermediate Holdings, any Note Guarantor, the Trustee or the Collateral Agent, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five calendar days after being deposited in the mail, postage prepaid, if mailed by first-class mail; when receipt acknowledged, if faxed; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery; provided that any notice or communication delivered to the Trustee or the Collateral Agent shall be deemed effective upon actual receipt thereof.

 

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Any notice or communication to a Holder shall be mailed by first-class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar or by other electronic means or such other delivery system as the Trustee agrees to accept. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

If the Issuer mails a notice or communication to Holders, they shall mail a copy to the Trustee and each Agent at the same time.

The Trustee and the Collateral Agent agree to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods. The Trustee and the Collateral Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s or the Collateral Agent’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee and the Collateral Agent, including without limitation the risk of the Trustee or the Collateral Agent acting on unauthorized instructions, and the risk or interception and misuse by third parties.

Notwithstanding anything to the contrary contained herein, as long as the Notes are in the form of a Global Note, notice to the Holders may be made electronically in accordance with procedures of the Depositary.

Section 15.02 Certificate and Opinion as to Conditions Precedent .

Upon any request or application by the Issuer, Holdings, Intermediate Holdings or any of the Note Guarantors to the Trustee or the Collateral Agent to take any action under this Indenture, the Issuer, Holdings, Intermediate Holdings or such Note Guarantor, as the case may be, shall furnish to the Trustee or the Collateral Agent:

(i) An Officer’s Certificate in form and substance reasonably satisfactory to the Trustee or the Collateral Agent, as the case may be (which shall include the statements set forth in Section 15.03 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(ii) An Opinion of Counsel in form and substance reasonably satisfactory to the Trustee or the Collateral Agent, as the case may be (which shall include the statements set forth in Section 15.03 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

 

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Section 15.03 Statements Required in Certificate or Opinion .

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(i) a statement that the Person making such certificate or opinion has read such covenant or condition;

(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(iii) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may be limited to reliance on an Officer’s Certificate as to matters of fact); and

(iv) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

Section 15.04 Rules by Trustee and Agents .

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

Section 15.05 No Personal Liability of Directors, Officers, Employees and Stockholders .

No director, officer, employee, manager, incorporator or holder of any Equity Interest of the Issuer, Holdings, Intermediate Holdings or any Note Guarantor or any direct or indirect parent corporation, as such, shall have any liability for any obligations of the Issuer, Holdings, Intermediate Holdings or the Note Guarantors under the Notes, the Holdings Guarantee, the Intermediate Holdings Guarantee, the Note Guarantees, this Indenture, the Collateral Documents, the Intercreditor Agreements or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

Section 15.06 Governing Law .

THIS INDENTURE, THE NOTES, THE HOLDINGS GUARANTEE, THE INTERMEDIATE HOLDINGS GUARANTEE AND ANY NOTE GUARANTEE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

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Section 15.07 Waiver of Jury Trial .

EACH OF THE ISSUER, HOLDINGS, INTERMEDIATE HOLDINGS, THE NOTE GUARANTORS, THE TRUSTEE AND THE COLLATERAL AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES, THE HOLDINGS GUARANTEE, THE INTERMEDIATE HOLDINGS GUARANTEE, THE NOTE GUARANTEES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 15.08 Force Majeure .

In no event shall the Trustee or the Collateral Agent be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused by, directly or indirectly, forces beyond its reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services.

Section 15.09 No Adverse Interpretation of Other Agreements .

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuer or its Restricted Subsidiaries, Holdings, Intermediate Holdings or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 15.10 Successors .

All agreements of the Issuer in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of Holdings, Intermediate Holdings and each Note Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 10.06 and Section 11.06 hereof.

Section 15.11 Severability .

In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 15.12 Counterpart Originals .

The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

Section 15.13 Table of Contents, Headings, etc .

The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be

 

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considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

Section 15.14 [ Reserved ]

Section 15.15 Designated Senior Indebtedness .

For purposes of the Existing 12.375% Senior Subordinated Notes Indenture, the Existing 13.375% Senior Subordinated Notes Indenture and the Convertible Notes Indenture, the Notes and the Note Guarantees will be specifically designated by the Issuer and the Note Guarantors in this Indenture as “Designated Senior Indebtedness”.

[ Signatures on following page ]

 

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

 

REALOGY CORPORATION
  By:   /s/ Anthony E. Hull
    Name: Anthony E. Hull
    Title: EVP, CFO & Treasurer
DOMUS HOLDINGS CORP.
  By:   /s/ Anthony E. Hull
    Name: Anthony E. Hull
    Title: EVP, CFO & Treasurer
DOMUS INTERMEDIATE HOLDINGS CORP.
  By:   /s/ Anthony E. Hull
    Name: Anthony E. Hull
    Title: EVP, CFO & Treasurer

 

[7.875% Senior Secured Notes Indenture]


CARTUS CORPORATION

CDRE TM LLC

NRT INSURANCE AGENCY, INC.

REALOGY OPERATIONS LLC

REALOGY SERVICES GROUP LLC

REALOGY SERVICES VENTURE PARTNER LLC

SOTHEBY’S INTERNATIONAL REALTY LICENSEE LLC

WREM, INC.

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Chief Financial Officer

 

[7.875% Senior Secured Notes Indenture]


CARTUS ASSET RECOVERY CORPORATION

CARTUS PARTNER CORPORATION

FEDSTATE STRATEGIC CONSULTING, INCORPORATED

J. W. RIKER – NORTHERN R. I., INC.

LAKECREST TITLE, LLC

NRT PHILADELPHIA LLC

REFERRAL NETWORK LLC

THE CORCORAN GROUP EASTSIDE, INC.

By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Executive Vice President & Treasurer

 

[7.875% Senior Secured Notes Indenture]


AMERICAN TITLE COMPANY OF HOUSTON

ATCOH HOLDING COMPANY

BURNET TITLE LLC

BURNET TITLE HOLDING LLC

BURROW ESCROW SERVICES, INC.

CORNERSTONE TITLE COMPANY

EQUITY TITLE COMPANY

EQUITY TITLE MESSENGER SERVICE

    HOLDING LLC

FIRST CALIFORNIA ESCROW CORPORATION

FRANCHISE SETTLEMENT SERVICES LLC

GUARDIAN HOLDING COMPANY

GUARDIAN TITLE AGENCY, LLC

GUARDIAN TITLE COMPANY

GULF SOUTH SETTLEMENT SERVICES, LLC

KEYSTONE CLOSING SERVICES LLC

MARKET STREET SETTLEMENT GROUP LLC

MID-ATLANTIC SETTLEMENT SERVICES LLC

NATIONAL COORDINATION ALLIANCE LLC

NRT SETTLEMENT SERVICES OF MISSOURI LLC

NRT SETTLEMENT SERVICES OF TEXAS LLC

PROCESSING SOLUTIONS LLC

SECURED LAND TRANSFERS LLC

ST. JOE TITLE SERVICES LLC

TAW HOLDING INC.

TEXAS AMERICAN TITLE COMPANY

TITLE RESOURCE GROUP AFFILIATES

    HOLDINGS LLC

TITLE RESOURCE GROUP HOLDINGS LLC

TITLE RESOURCE GROUP LLC

TITLE RESOURCE GROUP SERVICES LLC

TITLE RESOURCES INCORPORATED

TRG SERVICES, ESCROW, INC.

TRG SETTLEMENT SERVICES, LLP

WAYDAN TITLE, INC.

WEST COAST ESCROW COMPANY

By:   /s/ Thoms N. Rispoli
Name:   Thomas N. Rispoli
Title:   Chief Financial Officer

 

[7.875% Senior Secured Notes Indenture]


BETTER HOMES AND GARDENS REAL ESTATE LLC

BETTER HOMES AND GARDENS REAL ESTATE LICENSEE LLC

CENTURY 21 REAL ESTATE LLC

CGRN, INC.

COLDWELL BANKER LLC

COLDWELL BANKER REAL ESTATE LLC

ERA FRANCHISE SYSTEMS LLC

GLOBAL CLIENT SOLUTIONS LLC

ONCOR INTERNATIONAL LLC

REALOGY FRANCHISE GROUP LLC

REALOGY GLOBAL SERVICES LLC

REALOGY LICENSING LLC

SOTHEBY’S INTERNATIONAL REALTY AFFILIATES LLC

WORLD REAL ESTATE MARKETING LLC

By:   /s/ Andrew G. Napurano
Name:   Andrew G. Napurano
Title:   Chief Financial Officer

 

[7.875% Senior Secured Notes Indenture]


FSA MEMBERSHIP SERVICES, LLC
By:   /s/ Marilyn J. Wasser
Name:   Marilyn J. Wasser
Title:   Executive Vice President

 

[7.875% Senior Secured Notes Indenture]


ALPHA REFERRAL NETWORK LLC

ASSOCIATED CLIENT REFERRAL LLC

BURGDORFF LLC

BURGDORFF REFERRAL ASSOCIATES LLC

BURNET REALTY LLC

CAREER DEVELOPMENT CENTER, LLC

COLDWELL BANKER COMMERCIAL PACIFIC PROPERTIES LLC

COLDWELL BANKER PACIFIC PROPERTIES LLC

COLDWELL BANKER REAL ESTATE SERVICES LLC

COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY

COLDWELL BANKER RESIDENTIAL BROKERAGE LLC

COLDWELL BANKER RESIDENTIAL REAL ESTATE LLC

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK, INC.

COLORADO COMMERCIAL, LLC

HOME REFERRAL NETWORK LLC

JACK GAUGHEN LLC

NRT ARIZONA LLC

NRT ARIZONA COMMERCIAL LLC

NRT ARIZONA REFERRAL LLC

NRT COLORADO LLC

NRT COLUMBUS LLC

NRT COMMERCIAL LLC

NRT COMMERCIAL UTAH LLC

NRT DEVELOPMENT ADVISORS LLC

NRT DEVONSHIRE LLC

NRT HAWAII REFERRAL, LLC

NRT LLC

NRT MID-ATLANTIC LLC

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

 

[7.875% Senior Secured Notes Indenture]


NRT MISSOURI LLC

NRT MISSOURI REFERRAL NETWORK LLC

NRT NEW ENGLAND LLC

NRT NEW YORK LLC

NRT NORTHFORK LLC

NRT PITTSBURGH LLC

NRT REFERRAL NETWORK LLC

NRT RELOCATION LLC

NRT REOEXPERTS LLC

NRT SUNSHINE INC.

NRT TEXAS LLC

NRT UTAH LLC

REAL ESTATE REFERRAL LLC

REAL ESTATE REFERRALS LLC

REAL ESTATE SERVICES LLC

REFERRAL ASSOCIATES OF NEW ENGLAND LLC

REFERRAL NETWORK, LLC

REFERRAL NETWORK PLUS, INC.

SOTHEBY’S INTERNATIONAL REALTY, INC.

SOTHEBY’S INTERNATIONAL REALTY REFERRAL COMPANY, LLC

THE SUNSHINE GROUP (FLORIDA) LTD. CORP.

THE SUNSHINE GROUP, LTD.

VALLEY OF CALIFORNIA, INC.

By:   /s/ Kevin R. Greene
Name:   Kevin R. Greene
Title:   Chief Financial Officer

 

[7.875% Senior Secured Notes Indenture]


THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
  By:   /s/ Justin Huff
    Name: Justin Huff
    Title: Senior Associate
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Collateral Agent
  By:   /s/ Justin Huff
    Name:
    Title:

 

[7.875% Senior Secured Notes Indenture]


Appendix A

PROVISIONS RELATING TO INITIAL NOTES

AND ADDITIONAL NOTES

Section 1.1 Definitions.

(a) Capitalized Terms.

Capitalized terms used but not defined in this Appendix A have the meanings given to them in the Indenture. The following capitalized terms have the following meanings:

Applicable Procedures ” means, with respect to any transfer or transaction involving a Regulation S Global Note or beneficial interest therein, the rules and procedures of the Depositary for such Global Note, Euroclear and Clearstream, in each case to the extent applicable to such transaction and as in effect from time to time.

Clearstream ” means Clearstream Banking, Société Anonyme, or any successor securities clearing agency.

Euroclear ” means the Euroclear Clearance System or any successor securities clearing agency.

IAI ” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

QIB ” means a “qualified institutional buyer” as defined in Rule 144A.

Regulation S ” means Regulation S promulgated under the Securities Act.

Regulation S Notes ” means all Notes offered and sold outside the United States in reliance on Regulation S.

Restricted Period ”, with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (a) the day on which such Notes are first offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S, notice of which day shall be promptly given by the Issuer to the Trustee, and (b) the date of issuance with respect to any such Notes (with respect to Initial Notes, only clause (b) shall be applicable).

Rule 501 ” means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

Rule 144 ” means Rule 144 promulgated under the Securities Act.

Rule 144A ” means Rule 144A promulgated under the Securities Act.

Rule 144A Notes ” means all Notes offered and sold to QIBs in reliance on Rule 144A.

Rule 904 ” means Rule 904 promulgated under the Securities Act.


(b) Other Definitions.

 

 

Term:

   Defined in Section:  

“Agent Members”

     2.1 (c) 

“Automatic Exchange”

     2.3 (i) 

“Automatic Exchange Date”

     2.3 (i) 

“Automatic Exchange Notice”

     2.3 (i) 

“Automatic Exchange Notice Date”

     2.3 (i) 

“Global Note”

     2.1 (b) 

“IAI Global Note”

     2.1 (b) 

“Regulation S Global Note”

     2.1 (b) 

“Regulation S Permanent Global Note”

     2.1 (b) 

“Regulation S Temporary Global Note”

     2.1 (b) 

“Restricted Note”

     2.3 (i) 

“Rule 144A Global Note”

     2.1 (b) 

“Unrestricted Note”

     2.3 (i) 

Section 2.1 Form and Dating

(a) The Initial Notes issued on the date hereof shall be (i) offered and sold by the Issuer to the Initial Purchasers and (ii) resold initially only to (1) QIBs in reliance on Section 144A and (2) Persons other than U.S. Persons (as defined in Regulation S). Such Initial Notes may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and, except as set forth below, IAIs in accordance with Rule 501.

(b)  Global Notes. Rule 144A Notes shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form (collectively, the “ Rule 144A Global Note ”), without interest coupons and bearing the Global Notes Legend and the Restricted Notes Legend, which shall be registered in the name of the Depositary or a nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture. Regulation S Notes shall be issued initially in the form of one or more global Notes (collectively, the “ Regulation S Temporary Global Note ” and together with the Regulation S Permanent Global Note (identified below) the “ Regulation S Global Note ”), without interest coupons and bearing the Global Notes Legend and the Restricted Notes Legend, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture to accommodate transfers of beneficial interests in the Notes to non-U.S. Persons subsequent to the initial distribution. One or more global Notes in definitive, fully registered form without interest coupons and bearing the Global Notes Legend and the Restricted Notes Legend (collectively, the “ IAI Global Note ”) shall also be issued on the Issue Date, deposited with the Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture to accommodate transfers of beneficial interests in the Notes to IAIs subsequent to the initial distribution. Beneficial ownership interests in the Regulation S Global Note shall not be exchangeable for interests in the Rule 144A Global Note,

 

Appendix-2


the IAI Global Note or any other Note without a Restricted Notes Legend until the expiration of the Restricted Period. The Rule 144A Global Note, the IAI Global Note, the Regulation S Temporary Global Note and the Regulation S Permanent Global Note are each referred to herein as a “ Global Note ” and are collectively referred to herein as “ Global Notes ”. The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee and on the schedules thereto as hereinafter provided.

The Restricted Period shall be terminated upon certification in form reasonably satisfactory to the Trustee, if required, that beneficial ownership interests in the Regulation S Temporary Global Note are owned either by non-U.S. Persons or U.S. Persons who purchased such interests in a transaction that did not require registration under the Securities Act (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who shall take delivery of a beneficial ownership interest in a 144A Global Note bearing a Restricted Notes Legend, all as contemplated by this Appendix A).

Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in a Global Note (the “ Regulation S Permanent Global Note ”) pursuant to the applicable procedures of the Depositary. Simultaneously with the authentication of the Regulation S Permanent Global Note, the Trustee shall cancel the Regulation S Temporary Global Note.

The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Security and the Regulation S Permanent Global Security that are held by participants through Euroclear or Clearstream.

(c) Book-Entry Provisions. This Section 2.1(c) shall apply only to a Global Note deposited with or on behalf of the Depositary.

The Issuer shall execute and the Trustee shall, in accordance with this Section 2.1(c) and Section 2.2 and pursuant to an order of the Issuer signed by one Officer of the Issuer, authenticate and deliver initially one or more Global Notes that (i) shall be registered in the name of the Depositary for such Global Note or Global Notes or the nominee of such Depositary and (ii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions or held by the Trustee as Custodian.

Members of, or participants in, the Depositary (“ Agent Members ”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary or by the Trustee as Custodian or under such Global Note, and the Depositary may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such

 

Appendix-3


Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Note.

(d) Definitive Notes. Except as provided in Section 2.3 or 2.4, owners of beneficial interests in Global Notes will not be entitled to receive physical delivery of certificated Notes.

Section 2.2 Authentication. The Trustee shall authenticate and make available for delivery upon an Issuer Order (a) Initial Notes for original issue on the date hereof in an aggregate principal amount of $700,000,000, (b) subject to the terms of this Indenture, Additional Notes, and (c) upon an Automatic Exchange, Unrestricted Notes. Such Issuer Order shall specify the amount of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated and whether the Notes are to be Initial Notes, Additional Notes or Unrestricted Notes.

Section 2.3 Transfer and Exchange.

(a)  Transfer and Exchange of Definitive Notes. When Definitive Notes are presented to the Registrar with a request:

(i) to register the transfer of such Definitive Notes; or

(ii) to exchange such Definitive Notes for an equal principal amount of Definitive Notes of other authorized denominations,

the Registrar shall register the transfer or make the exchange as requested if the reasonable requirements for such transaction are met; provided , however , that the Definitive Notes surrendered for transfer or exchange:

(1) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing; and

(2) in the case of Transfer Restricted Notes, are accompanied by the following additional information and documents, as applicable:

(A) if such Definitive Notes are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect (in the form set forth on the reverse side of the Initial Note); or

(B) if such Definitive Notes are being transferred to the Issuer, a certification to that effect (in the form set forth on the reverse side of the Initial Note); or

(C) if such Definitive Notes are being transferred pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or in reliance upon another exemption from the registration requirements of the Securities Act, (x) a certification to that effect (in the form set forth in Exhibit B ) and (y) if the Issuer so requests, an opinion of counsel or other evidence reasonably satisfactory to them as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i).

 

Appendix-4


(b)  Restrictions on Transfer of a Definitive Note for a Beneficial Interest in a Global Note. A Definitive Note may not be exchanged for a beneficial interest in a Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Registrar, together with:

(i) certification (in the form set forth on the reverse side of the Initial Note) that such Definitive Note is being transferred (1) to a QIB in accordance with Rule 144A, (2) to an IAI that has furnished to the Trustee a signed letter substantially in the form of Exhibit B or (3) outside the United States in an offshore transaction within the meaning of Regulation S and in compliance with Rule 904 under the Securities Act; and

(ii) written instructions directing the Trustee to make, or to direct the Custodian to make, an adjustment on its books and records with respect to such Global Note to reflect an increase in the aggregate principal amount of the Notes represented by the Global Note, such instructions to contain information regarding the Depositary account to be credited with such increase, then the Trustee shall cancel such Definitive Note and cause, or direct the Custodian to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Custodian, the aggregate principal amount of Notes represented by the Global Note to be increased by the aggregate principal amount of the Definitive Note to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Note equal to the principal amount of the Definitive Note so canceled. If no Global Notes are then outstanding and the Global Note has not been previously exchanged for certificated securities pursuant to Section 2.4, the Issuer shall issue and the Trustee shall authenticate, upon an Issuer Order, a new Global Note in the appropriate principal amount.

(c)  Transfer and Exchange of Global Notes. (i) The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depositary, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depositary therefor. A transferor of a beneficial interest in a Global Note shall deliver a written order given in accordance with the Depositary’s procedures containing information regarding the participant account of the Depositary to be credited with a beneficial interest in such Global Note or another Global Note and such account shall be credited in accordance with such order with a beneficial interest in the applicable Global Note and the account of the Person making the transfer shall be debited by an amount equal to the beneficial interest in the Global Note being transferred. Transfers by an owner of a beneficial interest in the Rule 144A Global Note or the IAI Global Note to a transferee who takes delivery of such interest through the Regulation S Global Note, whether before or after the expiration of the Restricted Period, shall be made only upon receipt by the Trustee of a certification in the form provided on the reverse of the Initial Notes from the transferor to the effect that such transfer is being made in accordance with Regulation S or (if available) Rule 144 under the Securities Act and that, if such transfer is being made prior to the expiration of the Restricted Period, the interest transferred shall be held immediately thereafter through Euroclear or Clearstream. In the case of a transfer of a beneficial interest in either the Regulation S Global Note or the Rule 144A

 

Appendix-5


Global Note for an interest in the IAI Global Note, the transferee must furnish a signed letter substantially in the form of Exhibit B to the Trustee.

(ii) If the proposed transfer is a transfer of a beneficial interest in one Global Note to a beneficial interest in another Global Note, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of Global Note from which such interest is being transferred.

(iii) Notwithstanding any other provisions of this Appendix A (other than the provisions set forth in Section 2.4), a Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

(iv) In the event that a Global Note is exchanged for Definitive Notes pursuant to Section 2.4, such Notes may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Notes intended to ensure that such transfers comply with Rule 144A, Regulation S or such other applicable exemption from registration under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Issuer.

(d) Restrictions on Transfer of Regulation S Global Note . (i) Prior to the expiration of the Restricted Period, interests in the Regulation S Global Note may only be held through Euroclear or Clearstream. During the Restricted Period, beneficial ownership interests in the Regulation S Global Note may only be sold, pledged or transferred through Euroclear or Clearstream in accordance with the Applicable Procedures and only (1) to the Issuer, (2) so long as such security is eligible for resale pursuant to Rule 144A, to a Person whom the selling holder reasonably believes is a QIB that purchases for its own account or for the account of a QIB to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, (3) in an offshore transaction in accordance with Regulation S, (4) pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if applicable) under the Securities Act or another available exemption, (5) to an IAI purchasing for its own account, or for the account of such an IAI, in a minimum principal amount of Notes of $250,000 or (6) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. Prior to the expiration of the Restricted Period, transfers by an owner of a beneficial interest in the Regulation S Global Note to a transferee who takes delivery of such interest through the Rule 144A Global Note or the IAI Global Note shall be made only in accordance with Applicable Procedures and upon receipt by the Trustee of a written certification from the transferor of the beneficial interest in the form provided on the reverse of the Initial Note to the effect that such transfer is being made to (1) a QIB within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A or (2) an IAI purchasing for its own account, or for the account of

 

Appendix-6


such an IAI, in a minimum principal amount of the Notes of $250,000. Such written certification shall no longer be required after the expiration of the Restricted Period. In the case of a transfer of a beneficial interest in the Regulation S Global Note for an interest in the IAI Global Note, the transferee must furnish a signed letter substantially in the form of Exhibit B to the Trustee.

(ii) Upon the expiration of the Restricted Period, beneficial ownership interests in the Regulation S Global Note shall be transferable in accordance with applicable law and the other terms of this Indenture.

(e)  Legend .

(i) Except as permitted by the following paragraphs (ii), (iii) or (iv), each Note certificate evidencing the Global Notes and the Definitive Notes (and all Notes issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only):

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND, ACCORDINGLY, MAY NOT BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE ENCUMBERED OR OTHERWISE DISPOSED OF WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (C) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(A)(1), (2), (3), OR (7) UNDER REGULATION D (AN “ACCREDITED INVESTOR”), (2) AGREES THAT IT WILL NOT WITHIN [ IN THE CASE OF RULE 144A NOTES: ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ORIGINAL ISSUE DATE OF THE ISSUANCE OF ANY ADDITIONAL NOTES AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),] [ IN THE CASE OF REGULATION S NOTES : 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE DATE ON WHICH THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) WAS FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN RULE 902 OF REGULATION S) IN RELIANCE ON REGULATION S] (THE “RESALE TERMINATION DATE”) OFFER, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION

 

Appendix-7


OF COUNSEL IF THE ISSUER SO REQUESTS), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN ONE YEAR AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. [ IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.]”

Each Definitive Note shall bear the following additional legend:

“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

Each Global Note shall bear the following additional legend (“ Global Notes Legend ”):

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“ DTC ”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

(ii) Upon any sale or transfer of a Transfer Restricted Note that is a Definitive Note, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Note for a Definitive Note that does not bear the legends set forth above and rescind any

 

Appendix-8


restriction on the transfer of such Transfer Restricted Note if the Holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Initial Note).

(iii) [Reserved].

(iv) Upon a sale or transfer after the expiration of the Restricted Period of any Initial Note or Additional Note acquired pursuant to Regulation S, all requirements that such Initial Note or Additional Note bear the Restricted Notes Legend shall cease to apply and the requirements requiring any such Initial Note or Additional Note be issued in global form shall continue to apply.

(v) Any Additional Notes sold in a registered offering shall not be required to bear the Restricted Notes Legend.

(f) Cancellation or Adjustment of Global Note. At such time as all beneficial interests in a Global Note have either been exchanged for Definitive Notes, transferred, redeemed, repurchased or canceled, such Global Note shall be returned by the Depositary to the Trustee for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for Definitive Notes, transferred in exchange for an interest in another Global Note, redeemed, repurchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Custodian, to reflect such reduction.

(g)  Obligations with Respect to Transfers and Exchanges of Notes.

(i) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate, Definitive Notes and Global Notes at the Registrar’s request.

(ii) No service charge shall be made for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 2.07, 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 of this Indenture).

(iii) Prior to the due presentation for registration of transfer of any Note, the Issuer, the Trustee, the Paying Agent or the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuer, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.

 

Appendix-9


(iv) All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.

(h) No Obligation of the Trustee .

(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depositary or any other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to the registered Holders (which shall be the Depositary or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners.

(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

(i) Automatic Exchange from Global Note Bearing Restricted Notes Legend to Global Note Not Bearing Restricted Notes Legend . Upon the Issuer’s satisfaction that the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act, beneficial interests in a Global Note or in a Definitive Note bearing the Restricted Notes Legend (a “ Restricted Note ”) may be automatically exchanged into beneficial interests in a Global Note or Definitive Note, as applicable, not bearing the Restricted Notes Legend (an “ Unrestricted Note ”) without any action required by or on behalf of the Holder (the “ Automatic Exchange ”) at any time on or after the date that is the 366th calendar day after (A) with respect to the Initial Notes, the Issue Date or (B) with respect to Additional Notes, if any, the issue date of such Additional Notes, or, in each case, if such day is not a business day, on the next succeeding business day (the “ Automatic Exchange Date ”). Upon the Issuer’s satisfaction that the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act, the Issuer may, but shall not be obligated to, pursuant to the Applicable Procedures (i) provide written notice to DTC at least fifteen (15) calendar days prior to the Automatic Exchange Date, instructing DTC to exchange all of the outstanding beneficial interests in a particular Restricted Global Note to the

 

Appendix-10


Unrestricted Global Note, which the Issuer shall have previously otherwise made eligible for exchange with the DTC, (ii) provide prior written notice (the “ Automatic Exchange Notice ”) to each Holder at such Holder’s address appearing in the register of Holders at least fifteen (15) calendar days prior to the Automatic Exchange Date (the “ Automatic Exchange Notice Date ”), which notice must include (x) the Automatic Exchange Date, (y) the CUSIP number of the Restricted Global Note from which such Holder’s beneficial interests will be transferred and (z) the CUSIP number of the Unrestricted Global Note into which such Holder’s beneficial interests will be transferred, and (iii) on or prior to the Automatic Exchange Date, deliver to the Trustee for authentication one or more Unrestricted Global Notes, duly executed by the Issuer, in an aggregate principal amount equal to the aggregate principal amount of Restricted Global Notes to be exchanged. Upon receipt by the Trustee of an Officer’s Certificate of the Issuer setting forth the information to be stated in such Automatic Exchange Notice, which Officer’s Certificate must be received by the Trustee, on no less than five (5) calendar days prior to the Automatic Exchange Notice Date, the Trustee shall deliver, in the Issuer’s name and at the Issuer’s expense, the Automatic Exchange Notice to each Holder at such Holder’s address appearing in the register of Holders. Notwithstanding anything to the contrary in this Section 2.3(i), during the fifteen (15) day period prior to the Automatic Exchange Date, no transfers or exchanges other than pursuant to this Section 2.3(i) shall be permitted without the prior written consent of the Issuer. As a condition to any Automatic Exchange, the Issuer shall provide, and the Trustee shall be entitled to rely upon, an Officer’s Certificate and Opinion of Counsel in form reasonably acceptable to the Trustee, each to the effect that the Automatic Exchange shall be effected in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act and that the aggregate principal amount of the particular Restricted Global Note is to be transferred to the particular Unrestricted Global Note by adjustment made on the records of the Trustee, as custodian for the Depositary to reflect the Automatic Exchange. Upon such exchange of beneficial interests pursuant to this Section 2.3(i), the aggregate principal amount of the Global Notes shall be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, to reflect the relevant increase or decrease in the principal amount of such Global Note resulting from the applicable exchange. The Issuer shall also provide written notice to the Holder of Restricted Notes that are Definitive Notes at least (15) calendar days prior to the Automatic Exchange Date offering to exchange all of such Definitive Notes for Unrestricted Notes which shall include information similar to the notice provided to Holders of Global Notes under clause (ii) above and upon request of such Holder of Definitive Notes shall follow the procedures set forth above for exchanging such Definitive Notes for Definitive Notes that are not Restricted Notes. The Restricted Notes from which beneficial interests are transferred pursuant to an Automatic Exchange shall be canceled following the Automatic Exchange.

Section 2.4 Definitive Notes.

(a) A Global Note deposited with the Depositary or with the Trustee as Custodian pursuant to Section 2.1 or issued in connection with an Exchange Offer shall be transferred to the beneficial owners thereof in the form of Definitive Notes in an aggregate principal amount equal

 

Appendix-11


to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 and (i) the Depositary notifies the Issuer that it is unwilling or unable to continue as a Depositary for such Global Note or if at any time the Depositary ceases to be a “clearing agency” registered under the Exchange Act and, in each case, a successor depositary is not appointed by the Issuer within 90 days of such notice or after the Issuer becomes aware of such cessation, or (ii) an Event of Default has occurred and is continuing or (iii) the Issuer, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of certificated Notes under this Indenture; provided that in no event shall the Regulation S Temporary Global Note be exchanged by the Issuer for Definitive Notes prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act.

(b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depositary to the Trustee, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section shall be executed, authenticated and delivered only in denominations of $2,000 and integral multiples of $1,000 in excess thereof and registered in such names as the Depositary shall direct. Any certificated Initial Note or Additional Note in the form of a Definitive Note delivered in exchange for an interest in the Global Note shall, except as otherwise provided by Section 2.3(e), bear the Restricted Notes Legend.

(c) Subject to the provisions of Section 2.4(b), the registered Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

(d) In the event of the occurrence of any of the events specified in Section 2.4(a)(i), (ii) or (iii), the Issuer will promptly make available to the Trustee a reasonable supply of Definitive Notes in fully registered form without interest coupons.

 

Appendix-12


Exhibit A

[FORM OF FACE OF INITIAL NOTE]

[RULE 144A] [REGULATION S][IAI][GLOBAL] NOTE

[Global Notes Legend]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[Restricted Notes Legend]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND, ACCORDINGLY, MAY NOT BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE ENCUMBERED OR OTHERWISE DISPOSED OF WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (C) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(A)(1), (2), (3), OR (7) UNDER REGULATION D (AN “ACCREDITED INVESTOR”), (2) AGREES THAT IT WILL NOT WITHIN [ IN THE CASE OF RULE 144A NOTES: ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ORIGINAL ISSUE DATE OF THE ISSUANCE OF ANY ADDITIONAL NOTES AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),] [ IN THE CASE OF REGULATION S NOTES : 40 DAYS AFTER THE LATER OF THE ORIGINAL


ISSUE DATE HEREOF AND THE DATE ON WHICH THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) WAS FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN RULE 902 OF REGULATION S) IN RELIANCE ON REGULATION S] (THE “RESALE TERMINATION DATE”) OFFER, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN ONE YEAR AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. [ IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.]

[Temporary Regulation S Global Notes Legend]

THIS SECURITY IS A TEMPORARY GLOBAL SECURITY. PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD BY ANY PERSON OTHER THAN (1) A NON-U.S. PERSON OR (2) A U.S. PERSON THAT PURCHASED SUCH INTEREST IN A


TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). BENEFICIAL INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR CERTIFICATED NOTES OTHER THAN A PERMANENT GLOBAL NOTE IN ACCORDANCE WITH THE TERMS OF THE INDENTURE. TERMS IN THIS LEGEND ARE USED AS USED IN REGULATION S UNDER THE SECURITIES ACT.

[Definitive Notes Legend]

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.


CUSIP [            ]

ISIN [            ]

[RULE 144A][REGULATION S][IAI][GLOBAL] NOTE

7.875% Senior Secured Notes due 2019

February 3, 2011

 

No.             Principal Amount [$                      ] [, as
   revised by the Schedule of Exchanges of
   Interests in Global Security attached hereto] 1

REALOGY CORPORATION

promises to pay to [CEDE & CO.] 1 or registered assigns, [the principal sum of [            ] United States Dollars, revised by the Schedule of Exchanges of Interests in Global Security attached hereto,] 2 [[            ] United States Dollars] 2 on February 15, 2019.

Interest Payment Dates: February 15 and August 15

Record Dates: February 1 and August 1

 

1

Insert in Global Notes

2

Insert in Definitive Notes


IN WITNESS HEREOF, the Issuer has caused this instrument to be duly executed as of the date first set forth above.

 

REALOGY CORPORATION
By:    
  Name:
  Title:


This is one of the Notes referred to in the within-mentioned Indenture:

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:    
  Authorized Signatory

Dated:


[FORM OF BACK OF INITIAL NOTE]

7.875% Senior Secured Notes due 2019

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. Realogy Corporation, a Delaware corporation, promises to pay interest on the principal amount of this Note at 7.875% per annum from February 3, 2011 until maturity. The Issuer will pay interest semi-annually in arrears on February 15 and August 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “ Interest Payment Date ”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance; provided that the first Interest Payment Date shall be August 15, 2011. The Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the interest rate on the Notes; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the interest rate on the Notes. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

2. METHOD OF PAYMENT. The Issuer will pay interest on the Notes to the Persons who are registered Holders of Notes at the close of business on February 1 or August 1 (whether or not a Business Day), as the case may be, next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Principal of, premium, if any, and interest on the Notes will be payable at the office or agency of the Issuer maintained for such purpose or, at the option of the Issuer, payment of interest may be made by check mailed to the Holders at their respective addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest and premium on all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Issuer or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York Mellon Trust Company, N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuer may change any Paying Agent or Registrar without notice to the Holders. The Issuer or any of its Wholly Owned Subsidiaries may act in any such capacity.

4. INDENTURE. The Issuer issued the Notes under an Indenture, dated as of February 3, 2011 (the “ Indenture ”), among Realogy Corporation, Domus Holdings Corp., Domus Intermediate Holdings Corp., the Note Guarantors party thereto, the Trustee and the Collateral Agent. This Note is one of a duly authorized issue of notes of the Issuer designated as its 7.875% Senior Secured Notes due 2019. The Issuer shall be entitled to issue Additional Notes pursuant to Section 2.01 and 4.09 of the Indenture. The Notes and Additional Notes shall


be treated as a single class of securities for all purposes under the Indenture. The terms of the Notes include those stated in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION.

(a) Except as described under clauses (b) and (c) below, the Notes will not be redeemable at the Issuer’s option before February 15, 2015.

(b) At any time and from time to time prior to February 15, 2015, the Issuer may redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ prior notice mailed by first class mail to the registered address of each Holder (or electronically transmitted) or otherwise in accordance with the procedures of DTC, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest to the date of redemption, subject to the rights of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(c) At any time and from time to time on or prior to February 15, 2014, the Issuer may redeem in the aggregate up to 35% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent of the Issuer, in each case to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer from it, at a redemption price (expressed as a percentage of the principal amount thereof) of 107.875%, plus accrued and unpaid interest to the date of redemption (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided, however, that at least 50% of the original aggregate principal amount of the Notes (calculated after giving effect to any issuance of Additional Notes) remain outstanding after each such redemption; provided, further, that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed (or electronically transmitted) to each Holder of Notes being redeemed and otherwise in accordance with the procedures set forth in the Indenture.

(d) Notice of any redemption upon any Equity Offering may be given prior to the completion of such Equity Offering, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

(e) On or after February 15, 2015, the Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, upon notice pursuant to Section 3.03 of the Indenture at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon to the applicable date of redemption, subject to the right of Holders of record on the relevant Record Date to


receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on February 15 of each of the years indicated below:

 

Year

   Redemption
Price
 

2015

     103.938

2016

     101.969

2017 and thereafter

     100.000

(f) Any redemption pursuant to this paragraph 5 shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.

6. MANDATORY REDEMPTION. The Issuer shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

7. NOTICE OF REDEMPTION. Subject to Section 3.09 of the Indenture, notice of redemption will be mailed by first class mail, postage prepaid (or electronically transmitted), at least 30 days but not more than 60 days before the redemption date (except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 13 of the Indenture) to each Holder whose Notes are to be redeemed at its registered address or otherwise in accordance with the procedures of DTC. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 in excess of $2,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date, interest ceases to accrue on Notes or portions thereof called for redemption.

8. OFFERS TO REPURCHASE.

(a) Upon the occurrence of a Change of Control, each Holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Issuer to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase (subject to the right of the Holders of record on the relevant Record Date to receive interest due of the relevant Interest Payment Date), as provided in, and subject to the terms of, the Indenture. The Change of Control Offer shall be made in accordance with Section 4.14 of the Indenture.

(b) If the Issuer or any of its Restricted Subsidiaries consummates an Asset Sale, within 10 Business Days after the date that Excess Proceeds exceed $30.0 million, the Issuer shall commence an offer to all Holders of the Notes (and at the option of the Issuer to the holders of any Pari Passu Secured Indebtedness and, in the case of an Asset Sale of assets that are not Collateral, to holders of Senior Pari Passu Indebtedness) (an “ Asset Sale Offer ”), to purchase the maximum principal amount of Notes (and such Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable) that is a minimum of $2,000 or an integral multiple of $1,000 that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable, was issued with


significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest (or, in respect of such Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable, such lesser price, if any, as may be provided for by the terms of such Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture or the agreements governing the Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable. To the extent that the aggregate amount of Notes (and such Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes or any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes (and such Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable) surrendered by such holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes (and such Pari Passu Secured Indebtedness or Senior Pari Passu Indebtedness, as applicable) to be purchased on a pro rata basis, by lot or by such other method as Trustee shall deem fair and appropriate (and in a manner as complies with applicable legal requirements); provided that no Notes of $2,000 or less shall be purchased in part, except that if all of the Notes of a Holder are to be purchased, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1,000 in excess thereof, shall be purchased. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Issuer prior to any related Purchase Date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” attached to the Notes.

9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents, and Holders shall be required to pay any taxes and fees required by law or permitted by the Indenture. The Issuer need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuer need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed.

10. SUBORDINATION. The Holdings Guarantee is subordinated to Holdings Senior Indebtedness on the terms and subject to the conditions set forth in the Indenture. To the extent provided in the Indenture, Holdings Senior Indebtedness must be paid before the Holdings Guarantee may be paid. The Issuer agrees, and each Holder by accepting a Note agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give effect thereto and appoints the Trustee as attorney-in-fact for such purpose.

11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.

12. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Holdings Guarantee, the Intermediate Holdings Guarantee, the Note Guarantees, the Notes, the


Collateral Documents and the Intercreditor Agreements may be amended or supplemented as provided in the Indenture.

13. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes by notice to the Issuer may declare the principal of, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency of the Issuer, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture, the Notes, the Holdings Guarantee, the Intermediate Holdings Guarantee or the Note Guarantees except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default (except a Default relating to the payment of principal, premium, if any or interest) if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture except a continuing Default in payment of the principal of, premium, if any, or interest on, any of the Notes held by a non-consenting Holder (including in connection with an Asset Sale Offer or a Change of Control Offer). The Issuer is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required to deliver to the Trustee, within thirty (30) days after the occurrence of a Default, written notice in the form of an Officer’s Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

14. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.

15. SECURITY. The Notes shall be secured by Liens and security interests, subject to Permitted Liens, in the Collateral, which Liens are junior in priority to the Liens securing the First Priority Lien Obligations and senior in priority to the Liens securing the Second Priority Lien Obligations, on the terms and conditions set forth in the Indenture, the Collateral Documents and the Intercreditor Agreements. The Collateral Agent holds the Collateral in trust for the benefit of the Trustee and the Holders, in each case pursuant to the Collateral Documents and the Intercreditor Agreements.

16. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES, THE HOLDINGS GUARANTEE, THE INTERMEDIATE HOLDINGS GUARANTEE AND THE NOTE GUARANTEES.

17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers


to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to the Issuer at the following address:

c/o Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel


ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:                                                                                               

                         (Insert assignee’s legal name)

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                              

to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.

Date:                     

 

Your Signature:    
  (Sign exactly as your name appears on the face of this Note)

 

Signature Guarantee*:    

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).


CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF TRANSFER RESTRICTED NOTES

This certificate relates to $              principal amount of Notes held in (check applicable space)              book-entry or              definitive form by the undersigned.

The undersigned (check one box below):

 

¨ has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Note held by the Depositary a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above) in accordance with the Indenture; or

 

¨ has requested the Trustee by written order to exchange or register the transfer of a Note or Notes.

In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144 under the Securities Act, the undersigned confirms that such Notes are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

 

(1)    

   ¨         to the Issuer; or

(2)    

   ¨         to the Registrar for registration in the name of the Holder, without transfer; or

(3)    

   ¨         pursuant to an effective registration statement under the Securities Act of 1933; or

(4)    

   ¨         inside the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or

(5)    

   ¨         outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or

(6)    

   ¨         to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements; or


(7)    

   ¨         pursuant to another available exemption from registration under the Securities Act of 1933.

Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided , however , that if box (5), (6) or (7) is checked, the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuer has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.

 

   
Your Signature

 

Signature Guarantee:    
Date:                           
Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee     Signature of Signature Guarantee

TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

Dated:                         
         
    NOTICE: To be executed by an executive officer


OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:

¨   Section 4.10              ¨   Section 4.14

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased:

$             

 

Date:                        Your Signature:      
    (Sign exactly as your name appears on the face of this Note)

 

    Tax Identification No.:      
   

 

Signature Guarantee*:    

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).


SCHEDULE OF EXCHANGES OF INTERESTS IN GLOBAL SECURITY*

The initial outstanding principal amount of this Global Note is $              . The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

 

Date of
Exchange

   Amount of
decrease
in Principal
Amount of this
Global Note
   Amount of increase
in Principal
Amount of this
Global Note
   Principal Amount
of
this Global Note
following such
decrease or increase
   Signature of
authorized
officer
of Trustee or
Custodian

 

* This schedule should be included only if the Note is issued in global form.


Exhibit B

FORM OF

TRANSFEREE LETTER OF REPRESENTATION

Realogy Corporation

One Campus Drive

Parsippany, New Jersey 07054

Fax No.: (973) 407-7004

Attention: General Counsel

In care of

The Bank of New York Mellon Trust Company, N.A.

525 William Penn Place, 38 th Floor

Pittsburgh, Pennsylvania 15259

Fax No.: (412) 234-7535

Attention: Corporate Trust Administration

Ladies and Gentlemen:

This certificate is delivered to request a transfer of [            ] principal amount of the 7.875% Senior Notes due 2019 (the “ Notes ”) of Realogy Corporation (the “ Issuer ”).

Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows:

Name:                                                              

Address:                                                          

Taxpayer ID Number:                                   

The undersigned represents and warrants to you that:

1. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “ Securities Act ”)), purchasing for our own account or for the account of such an institutional “accredited investor” at least $250,000 principal amount of the Securities, and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we invest in or purchase securities similar to the Notes in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment.


2. We understand that the Notes have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Notes to offer, sell or otherwise transfer such Notes prior to the date that is one year after the later of the date of original issue and the last date on which the Issuer or any affiliate of the Issuer was the owner of such Notes (or any predecessor thereto) (the “ Resale Restriction Termination Date ”) only (a) to the Issuer, (b) pursuant to a registration statement that has been declared effective under the Securities Act, (c) in a transaction complying with the requirements of Rule 144A under the Securities Act (“ Rule 144A ”), to a person or entity we reasonably believe is a qualified institutional buyer under Rule 144A (a “ QIB ”) that is purchasing for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act, (e) to an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing for its own account or for the account of such an institutional “accredited investor,” in each case in a minimum principal amount of Notes of $250,000, or (f) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Notes is proposed to be made pursuant to clause (e) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuer and the Trustee, which shall provide, among other things, that the transferee is an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Notes for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Issuer and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Notes pursuant to clause (d), (e) or (f) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Issuer and the Trustee.

 

TRANSFEREE:       ,
by:      


Exhibit C

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY FUTURE NOTE GUARANTORS

Supplemental Indenture (this “ Supplemental Indenture ”), dated as of              , among              (the “ Guaranteeing Subsidiary ”), a subsidiary of Realogy Corporation, a Delaware corporation (the “ Issuer ”), and The Bank of New York Mellon Trust Company, N.A., as trustee (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, each of the Issuer, Holdings, Intermediate Holdings and the Note Guarantors (as defined in the Indenture referred to below) has heretofore executed and delivered to the Trustee an indenture (the “ Indenture ”), dated as of February 3, 2011, providing for the issuance of an unlimited aggregate principal amount of 7.875% Senior Secured Notes due 2019 (the “ Notes ”);

WHEREAS, the Section 4.15 of the Indenture provides that under certain circumstances the Issuer is required to cause the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Issuer, the Trustee and the Guaranteeing Subsidiary are authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee . The Guaranteeing Subsidiary hereby agrees as follows:

(a) Along with Holdings, Intermediate Holdings and all Note Guarantors named in the Indenture or any supplemental indenture, to jointly and severally unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that:

(i) the principal of and interest and premium on the Notes shall be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder whether for payment of principal of, premium, if any, or interest on the Notes and all other monetary obligations of the


Issuer under the Indenture and the Notes shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

(ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, Holdings, Intermediate Holdings, each Note Guarantor and the Guaranteeing Subsidiary shall be jointly and severally obligated to pay the same immediately. This is a guarantee of payment and not a guarantee of collection.

(b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, the Indenture, the Holdings Guarantee, the Intermediate Holdings Guarantee or any other Note Guarantee, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, Holdings, Intermediate Holdings or any Note Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor.

(c) The following is hereby waived: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever.

(d) This Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, the Indenture and this Supplemental Indenture, and the Guaranteeing Subsidiary accepts all obligations of a Note Guarantor under the Indenture.

(e) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, Holdings, Intermediate Holdings, the Note Guarantors (including the Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer, Holdings, Intermediate Holdings or the Note Guarantors, any amount paid either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(f) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(g) As between the Guaranteeing Subsidiary, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the

 

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Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guaranteeing Subsidiary for the purpose of this Note Guarantee.

(h) The Guaranteeing Subsidiary shall have the right to seek contribution from Holdings, Intermediate Holdings or any non-paying Note Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Note Guarantee.

(i) Pursuant to Section 10.02 of the Indenture, after giving effect to all other contingent and fixed liabilities that are relevant under any applicable Bankruptcy Law or fraudulent conveyance laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of Holdings, Intermediate Holdings or any other Note Guarantor in respect of the obligations of Holdings, Intermediate Holdings or such other Note Guarantor under Article 10 or Article 11 of the Indenture, this new Note Guarantee shall be limited to the maximum amount permissible such that the obligations of such Guaranteeing Subsidiary under this Note Guarantee will not be voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

(j) This Note Guarantee shall be a continuing guarantee and shall (1) remain in full force and effect until payment in full of all the applicable obligations guaranteed hereby; (2) subject to Section 10.06 of the Indenture, be binding upon the Guaranteeing Subsidiary and its successors; and (3) inure to the benefit of and be enforceable by the Trustee, the Holders and their successors, transferees and assigns.

(k) This Note Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer, Holdings, Intermediate Holdings or any Note Guarantor for liquidation or reorganization, should the Issuer, Holdings, Intermediate Holdings or any Note Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s, Holdings’, Intermediate Holdings’ or any Note Guarantor’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, the Holdings Guarantee, the Intermediate Holdings Guarantee or Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(l) In case any provision of this Note Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

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(m) This Note Guarantee shall be a general senior secured obligation of such Guaranteeing Subsidiary, ranking pari passu with all existing and future Pari Passu Secured Indebtedness of the Guaranteeing Subsidiary, if any.

(n) Each payment to be made by the Guaranteeing Subsidiary in respect of this Note Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

(3) Execution and Delivery . The Guaranteeing Subsidiary agrees that the Note Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Note Guarantee on the Notes.

(4) Merger, Consolidation or Sale of All or Substantially All Assets .

(a) Except as otherwise provided in Section 5.01(b) of the Indenture, the Guaranteeing Subsidiary may not, and the Issuer will not permit the Guaranteeing Subsidiary to, consolidate, amalgamate or merge with or into or wind up into (whether or not the Guaranteeing Subsidiary is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(i) either (a) such Guaranteeing Subsidiary is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Guaranteeing Subsidiary) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Guaranteeing Subsidiary or such Person, as the case may be, being herein called the “ Successor Note Guarantor ”) and the Successor Note Guarantor (if other than the Guaranteeing Subsidiary) expressly assumes all the obligations of the Guaranteeing Subsidiary under the Indenture and the Collateral Documents and the Intercreditor Agreement and the Guaranteeing Subsidiary’s applicable Note Guarantee pursuant to a supplemental indenture or other documents or instruments in form reasonably satisfactory to the Trustee and will cause such amendments, supplements or other instruments to be executed, filed and recorded in such jurisdictions as may be required by applicable law to cause the property and assets that are of the type of which would constitute Collateral owned by or transferred to the Successor Note Guarantor to be made subject to the Lien of the Collateral Documents in the manner and to the extent required by this Indenture or any of the Collateral Documents and to preserve and protect the Lien on the Collateral owned by or transferred to the Successor Note Guarantor, including such financing statements or comparable documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions, or (b) such sale or disposition or consolidation, amalgamation or merger is not in violation of Section 4.10 of the Indenture;

(ii) the Successor Note Guarantor (if other than the Guaranteeing Subsidiary) shall have delivered or caused to be delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and

 

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such supplemental indentures, amendments, supplements to any Collateral Documents or other instruments relating to the applicable Collateral Documents or new Collateral Documents, if any, comply with this Indenture and the Collateral Documents;

(iii) immediately after such transaction, no Default or Event of Default exists; and

(iv) Collateral owned by or transferred to the Successor Note Guarantor shall:

(A) continue to constitute Collateral under this Indenture and the Collateral Documents,

(B) be subject to the Lien in favor of the Collateral Agent for the benefit of the Collateral Agent, the Trustee and the Holders; and

(C) not be subject to any Lien other than Permitted Liens.

(b) Except as otherwise provided in the Indenture, the Successor Note Guarantor (if other than the Guaranteeing Subsidiary) will succeed to, and be substituted for, the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s applicable Note Guarantee, and the Guaranteeing Subsidiary will automatically be released and discharged from its obligations under the Indenture and the Guaranteeing Subsidiary’s applicable Note Guarantee, the Collateral Documents and the Intercreditor Agreements, but in the case of a lease of all or substantially all of its assets, the Guaranteeing Subsidiary will not be released from its obligations under the Note Guarantee, the Collateral Documents and the Intercreditor Agreements. Notwithstanding the foregoing, (1) a Guaranteeing Subsidiary may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating the Guaranteeing Subsidiary in another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness, Preferred Stock and Disqualified Stock of the Guaranteeing Subsidiary is not increased thereby and (2) a Guaranteeing Subsidiary may merge, amalgamate or consolidate with another Guaranteeing Subsidiary or the Issuer.

(c) In addition, notwithstanding the foregoing, the Guaranteeing Subsidiary may consolidate, amalgamate or merge with or into or wind up into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a “ Transfer ”) to (x) the Issuer or any Note Guarantor or (y) any Non-Guarantor Subsidiary; provided that at the time of each such Transfer pursuant to clause (y) the aggregate amount of all such Transfers since the Issue Date shall not exceed the greater of $625.0 million and 5.0% of Total Assets after giving effect to each such Transfer and including all Transfers of the Guaranteeing Subsidiary and the Note Guarantors occurring from and after the Issue Date (excluding Transfers in connection with the Merger Transactions).

(5) Releases .

The Note Guarantee of the Guaranteeing Subsidiary under the Indenture and the Notes, and the obligations of such Note Guarantor under the Collateral Documents and Intercreditor Agreements shall be automatically and unconditionally released and discharged,

 

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and no further action by the Guaranteeing Subsidiary, Holdings, Intermediate Holdings, the Issuer, the Trustee or the Collateral Agent is required for the release of the Guaranteeing Subsidiary’s Guarantee, upon:

(1)(a) the sale, disposition or other transfer (including through merger or consolidation) of the Capital Stock (including any sale, disposition or other transfer following which the Guaranteeing Subsidiary is no longer a Restricted Subsidiary), of the Guaranteeing Subsidiary if such sale, disposition or other transfer is made in compliance with the applicable provisions of the Indenture;

(b) the Issuer designating the Guaranteeing Subsidiary to be an Unrestricted Subsidiary in accordance with the provisions set forth under Section 4.07 of the Indenture and the definition of “Unrestricted Subsidiary”;

(c) the release or discharge of such Restricted Subsidiary from (x) its guarantee of Indebtedness under the Credit Agreement (including by reason of the termination of the Credit Agreement but only if the Liens on the Notes are also released at such time as described under 14.07) and/or (y) the guarantee of Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer or such Restricted Subsidiary or the repayment of the Indebtedness or Disqualified Stock (except in each case a discharge or release by or as a result of payment under such guarantee) that resulted in the obligation to guarantee the Notes, in the case of each of clauses (x) and (y) if the Guaranteeing Subsidiary would not then otherwise be required to guarantee the Notes pursuant to the Indenture; provided , that if such Person has incurred any Indebtedness or issued any Disqualified Stock in reliance on its status as a Note Guarantor under Section 4.09 of the Indenture, the Guaranteeing Subsidiary’s obligations under such Indebtedness or Disqualified Stock, as the case may be, so Incurred are satisfied in full and discharged or are otherwise permitted to be Incurred under Section 4.09 of the Indenture; or

(d) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 of the Indenture or the Issuer’s obligations under the Indenture being discharged in accordance with the terms of the Indenture; and

(2) in the case of clause (1)(a) above, the release of the Guaranteeing Subsidiary from its guarantee, if any, of, and all pledges and security, if any, granted in connection with, the Credit Agreement and any other Indebtedness of the Issuer or any Restricted Subsidiary.

In addition, a Note Guarantee will be automatically released upon the Guaranteeing Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest securing First Priority Lien Obligations or other exercise of remedies in respect thereof.

(6) No Recourse Against Others . No director, officer, employee, manager, incorporator or holder of any Equity Interests of the Guaranteeing Subsidiary or any direct or indirect parent, as such, shall have any liability for any obligations of the Issuer or the Note Guarantors under the Notes, the Note Guarantees, the Indenture, the Collateral Documents, the Intercreditor Agreements or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and

 

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releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(7) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(8) Counterparts/Originals . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

(9) Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction hereof.

(10) The Trustee . The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary.

(11) Subrogation . The Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by the Guaranteeing Subsidiary pursuant to the provisions of Section 2 hereof and Section 10.01 of the Indenture; provided that, if an Event of Default has occurred and is continuing, the Guaranteeing Subsidiary shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under the Indenture or the Notes shall have been paid in full.

(12) Benefits Acknowledged . The Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. The Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Note Guarantee are knowingly made in contemplation of such benefits.

(13) Successors . All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in Section 2(k) hereof or elsewhere in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

 

C-7


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

 

[GUARANTEEING SUBSIDIARY]

By:

   
  Name:
  Title:

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

By:

   
  Name:
  Title:

 

C-8


Annex A

 

Annex A-1

 

788881.01-NewYork Server 3A - MSW

Exhibit 10.6

INCREMENTAL ASSUMPTION AGREEMENT

INCREMENTAL ASSUMPTION AGREEMENT, dated as of February 3, 2011 (this “ Incremental Assumption Agreement ”), by and among Domus Intermediate Holdings Corp. (“ Holdings ”), Realogy Corporation (the “ Borrower ”), the First Lien Lenders party hereto and JPMorgan Chase Bank, N.A. (“ JPMorgan Chase Bank ”), as administrative agent (the “ Administrative Agent ”).

W I T N E S S E T H :

WHEREAS, reference is hereby made to the Credit Agreement, dated as of April 10, 2007, as amended by the First Amendment dated as of the date hereof (the “ Credit Agreement ”; capitalized terms used but not defined herein shall have the meaning provided in the Credit Agreement), by and among Holdings, the Borrower, the Lenders party thereto from time to time, the Administrative Agent, the Syndication Agent and the Documentation Agents;

WHEREAS, pursuant to Section 2.20(e) of the Credit Agreement, the Borrower may, pursuant to an Extension Offer, request Extended First Lien Term Loans, Extended Revolving Facility Commitments and Extended Synthetic L/C Commitments;

WHEREAS, pursuant to Section 2.20(h) of the Credit Agreement, the Borrower may, pursuant to an Extension Offer, request an extension of the Revolving Facility Maturity Date applicable to any Revolving Facility Commitments and convert such Revolving Facility Commitments to Extended First Lien Term Loans;

WHEREAS, the Borrower hereby requests that the First Lien Lenders (a) extend the maturity date with respect to all or a portion of their existing First Lien Term Loans (such extended Loans, for purposes hereof, the “ Extended FL Term Loans ”), (b) extend the maturity date with respect to all or a portion of their Revolving Facility Commitments after giving effect to the Converted Term Loans described below (such extended Commitments, for purposes hereof, the “ Extended RF Commitments ”), (c) extend the Synthetic L/C Maturity Date applicable to all or a portion of the Synthetic L/C Commitments of such Lenders (such extended Commitments, for purposes hereof, the “ Extended Synthetic Commitments ”) and (d) convert a portion of their Revolving Facility Commitments to Extended FL Term Loans (such converted Revolving Facility Commitments, “ Converted Term Loans ”), all on the terms set forth in this Incremental Assumption Agreement;

WHEREAS, the terms of this Incremental Assumption Agreement shall be deemed to be the Extension Offer required by Sections 2.20(e) and (h) of the Credit Agreement;

WHEREAS, on the Incremental Assumption Closing Date (as defined below) the Borrower shall make a prepayment on account of the principal of the Extended FL Term Loans (excluding for this purpose Converted Term Loans) in an amount equal to the gross proceeds of the First and a Half Lien Refinancing Notes, which shall not be less than $700,000,000 (such prepayment, the “ Incremental Assumption Closing Date Prepayment ”);


WHEREAS, the First Lien Lenders party hereto are willing to (a) extend all or a portion of their existing First Lien Term Loans, Revolving Facility Commitments and/or the Synthetic L/C Maturity Date applicable to all or a portion of the Synthetic L/C Commitments of such Lenders and/or (b) convert all or a portion of their Revolving Facility Commitments to Converted Term Loans, in each case as and to the extent indicated on such Lender’s signature page attached hereto; and

WHEREAS, the terms of the Extended FL Term Loans (including the Converted Term Loans), to the extent different from those provided for Term B Loans in the Loan Documents, are reasonably satisfactory to the Administrative Agent, in each case as evidenced by the Administrative Agent being party hereto;

NOW, THEREFORE, the parties hereto agree as follows:

SECTION. Defined Terms . Terms used but not otherwise defined herein shall have the meanings assigned thereto in the Credit Agreement. As used in this Incremental Assumption Agreement, the following terms shall have the meanings specified below:

Converted Term Loans ” shall have the meaning assigned to such term in the fourth WHEREAS paragraph hereof.

Extended First Lien Term Lender ” shall mean a Lender with outstanding Extended FL Term Loans.

Extended FL Term Loans ” shall have the meaning assigned to such term in the fourth WHEREAS paragraph hereof, and shall include Converted Term Loans (except to the extent otherwise specifically excluded therefrom pursuant to the terms of this Incremental Assumption Agreement).

Extended RF Availability Period ” shall mean the period from and including the Incremental Assumption Closing Date to but excluding the earlier of the Extended RF Maturity Date and the date of termination of the Extended RF Commitments.

Extended RF Commitments ” shall have the meaning assigned to such term in the fourth WHEREAS paragraph hereof.

Extended RF Lender ” shall mean a Lender with Extended RF Commitments or outstanding Extended RF Loans.

Extended RF Loans ” shall mean, at any time with respect to each Extended RF Lender, a portion of such Extended RF Lender’s Revolving Facility Loans equal to the product of (x) the aggregate amount of Revolving Facility Loans of such Extended RF Lender outstanding at such time and (y) the Extended RF Percentage of such Extended RF Lender.

 

2


Extended RF Maturity Date ” shall mean April 10, 2016.

Extended RF Percentage ” shall mean, at any time with respect to each Extended RF Lender, (x) the Extended RF Commitments of such Lender in effect at such time divided by (y) the sum of the Extended RF Commitments and Non-Extended Revolving Facility Commitments of such Lender in effect at such time, in each case after giving effect to this Incremental Assumption Agreement and the conversion of Revolving Facility Commitments to Extended FL Term Loans effected hereunder.

Extended Synthetic Commitments ” shall have the meaning assigned to such term in the fourth WHEREAS paragraph hereof.

Extended Synthetic Lenders ” shall mean Synthetic L/C Lenders with Extended Synthetic Commitments.

Incremental Assumption Closing Date ” shall mean the date on which the conditions set forth in Section 8 are satisfied, which date shall be February 3, 2011.

Incremental Assumption Closing Date Prepayment ” shall have the meaning assigned to such term in the sixth WHEREAS paragraph hereof.

Newly Extended Revolving Facility Commitments ” shall have the meaning assigned to such term in Section 4(d).

Newly Extended Revolving Loans ” shall have the meaning assigned to such term in Section 4(d).

Newly Extended Synthetic Commitments ” shall have the meaning assigned to such term in Section 5(c).

Newly Extended Term Loans ” shall have the meaning assigned to such term in Section 2(c).

Non-Extended FL Term Loans ” shall mean any Term B Loans that are not Extended FL Term Loans.

Non-Extended RF Commitments ” shall mean any Revolving Facility Commitments that are not Extended RF Commitments.

Specified Extended RF Lender ” shall mean each of JPMorgan Chase Bank, N.A., Barclays Bank PLC, Credit Suisse AG, Cayman Islands Branch and Goldman Sachs Lending Partners LLC.

 

3


SECTION 2. Terms of the Extended FL Term Loans .

(a) Credit Agreement Governs . Except as set forth in this Incremental Assumption Agreement, the Extended FL Term Loans shall have the same terms as the Term B Loans and the Extended FL Term Loans shall be subject to the provisions of the Credit Agreement and the other Loan Documents as modified hereby.

(b) Applicable Rate . The Applicable Margin with respect to the Extended FL Term Loans shall be 4.25% per annum in the case of any Eurocurrency Loan and 3.25% per annum in the case of any ABR Loan; provided that if at any time any Non-Extended FL Term Loans become Extended Term Loans (“ Newly Extended Term Loans ”) and such Newly Extended Term Loans have an effective yield higher than the effective yield of the Extended FL Term Loans, the Applicable Margin with respect to the Extended FL Term Loans shall be increased such that the effective yield of the Extended FL Term Loans is equal to the effective yield of the Newly Extended Term Loans.

(c) Maturity Date and Amortization . The Incremental Term Facility Maturity Date for the Extended FL Term Loans shall be October 10, 2016, and on such date the Borrower shall repay to the Administrative Agent for the ratable account of the Extended First Lien Term Lenders the aggregate principal amount of all Extended FL Term Loans then outstanding. After giving effect to the Incremental Assumption Closing Date Prepayment, the Extended FL Term Loans shall have no scheduled amortization prior to the Incremental Term Facility Maturity Date.

(d) Optional Prepayments . Notwithstanding anything to the contrary in Section 2.11(a) of the Credit Agreement, the Borrower shall not have the right to make any optional prepayment of the Extended FL Term Loans unless the Non-Extended FL Term Loans are prepaid on at least a pro rata basis.

(e) Mandatory Prepayments . (i) Other than as set forth in clause (ii) of this Section 2(e) or as otherwise provided in Section 2.11(f) or Section 2.11(g) of the Credit Agreement, mandatory prepayments of First Lien Term Loans shall be made on a pro rata basis among the Extended FL Term Loans and Non-Extended FL Term Loans.

(ii) The Incremental Assumption Closing Date Prepayment shall be applied to prepay the Extended FL Term Loans of the Extended First Lien Term Lenders (but excluding for this purpose the Converted Term Loans) at par on a pro rata basis among such Lenders; provided that each such Lender may, by notifying the Administrative Agent in writing on or before the second Business Day prior to the Incremental Assumption Closing Date, elect to decline its share of the Incremental Assumption Closing Date Prepayment with respect to all (but not a portion) of its Extended FL Term Loans. If any Extended First Lien Term Lender makes such an election, then such Lender’s Extended FL Term Loans may nevertheless be prepaid, but only to the extent provided in Section 2.11(g) of the Credit Agreement.

SECTION 3. Terms of the Converted Term Loans .

 

4


(a) Credit Agreement Governs . Except as set forth in this Incremental Assumption Agreement, the Converted Term Loans shall have the same terms as the Extended FL Term Loans and the Converted Term Loans shall be subject to the provisions of the Credit Agreement and the other Loan Documents as modified hereby.

(b) Converted Term Loans . Each Specified Extended RF Lender agrees that 16.67% of its Extended RF Commitments (except for certain Extended RF Commitments, to be agreed solely between the Specified Extended RF Lender with respect to any such Extended RF Commitment and the Borrower, which are held in trading accounts by such Specified Extended RF Lenders) shall be converted to Converted Term Loans and each other Extended RF Lender agrees that 27.5% of its Extended RF Commitments shall be converted to Converted Term Loans on the Incremental Assumption Closing Date.

(c) Prepayments . After the Incremental Assumption Closing Date, as Extended FL Term Loans, the Converted Term Loans shall be entitled to share on a pro rata basis in all optional and mandatory prepayments as provided in Section 2(d) and (e) above other than with respect to the Incremental Assumption Closing Date Prepayment.

SECTION 4. Terms of the Extended RF Commitments .

(a) Credit Agreement Governs . Except as set forth in this Incremental Assumption Agreement, the Extended RF Commitments shall (i) have the same terms as the Revolving Facility Commitments, (ii) shall be deemed to be Revolving Facility Commitments for all purposes under the Credit Agreement and (iii) shall be subject to the provisions of the Credit Agreement and the other Loan Documents as modified hereby.

(b) Availability . For all purposes of the Loan Documents the “Availability Period” with respect to the Extended RF Commitments shall mean the “Extended RF Availability Period”.

(c) Maturity . For all purposes of the Loan Documents , the “Revolving Facility Maturity Date” solely with respect to the Extended RF Commitments and the Extended RF Loans shall be April 10, 2016. To the extent not previously paid, outstanding Extended RF Loans shall be due and payable on the Extended RF Maturity Date.

(d) Applicable Rate . The Applicable Margin with respect to Extended RF Loans shall be 3.25% per annum in the case of any Eurocurrency Loan and 2.25% per annum in the case of any ABR Loan; provided that if at any time any Revolving Facility Commitments that are not Extended RF Commitments become Extended Revolving Facility Commitments (“ Newly Extended Revolving Facility Commitments ”) and the Loans made pursuant to such Newly Extended Revolving Facility Commitments (“ Newly Extended Revolving Loans ”) have an effective yield higher than the effective yield of the Extended RF Loans, the Applicable Margin with respect to the Extended RF Loans shall automatically be increased such that the effective yield of the Extended RF Loans is equal to the effective yield of the Newly Extended Revolving Loans.

(e) Fees . The L/C Participation Fee payable by the Borrower to the Administrative

 

5


Agent for the account of each Extended RF Lender from time to time with respect to the participations in Revolving Letters of Credit acquired by each such Lender in respect of its Extended RF Commitment shall be the Applicable Margin applicable to any Extended RF Loan that is a Eurocurrency Loan. The Applicable Commitment Fee payable to the Administrative Agent for the account of each Extended RF Lender from time to time in respect of its unused Extended RF Commitment shall be as set forth in the Credit Agreement.

(f) Revolving Letter of Credit Sublimit . The Revolving Letter of Credit Sublimit will not be modified after the Revolving Facility Maturity Date occurs with respect to the Non-Extended RF Commitments.

SECTION 5. Terms of the Extended Synthetic Commitments .

(b) Credit Agreement Governs . Except as set forth in this Incremental Assumption Agreement, the Extended Synthetic Commitments shall have the same terms as the Synthetic L/C Commitments and the Extended Synthetic Commitments shall be subject to the provisions of the Credit Agreement and the other Loan Documents as modified hereby.

(c) Maturity Date . For all purposes of the Loan Documents the “Synthetic L/C Maturity Date” solely with respect to the Extended Synthetic Commitments and the Credit-Linked Deposits of Extended Synthetic Lenders shall be October 10, 2016.

(d) Participation Fee . The participation fee payable by the Borrower to the Administrative Agent for the account of each Extended Synthetic Lender with respect to participations in Synthetic Letters of Credit acquired by each such Lender in respect of its Extended RF Commitment shall accrue at 4.25% per annum on the average daily amount of such Extended Synthetic Lender’s Credit-Linked Deposit related to its Extended Synthetic Commitments; provided that if at any time any Synthetic L/C Commitments that are not Extended Synthetic Commitments become Extended Synthetic L/C Commitments (“ Newly Extended Synthetic Commitments ”) and the participation fee payable in respect of such Newly Extended Synthetic Commitments is higher than the participation fee payable in respect of the Extended Synthetic Commitments, the participation fee applicable to the Extended Synthetic Commitments shall be increased such that it is equal to the participation fee applicable to the Newly Extended Synthetic Commitments.

SECTION 6. Extension Offer; Extended FL Term Loans and Converted Term Loans as One Facility and Tranche . (a) The terms of this Incremental Assumption Agreement shall be deemed the Extension Offers required pursuant to Section 2.20 of the Credit Agreement.

(b) With respect to the Extension Offers with respect to the Extended FL Term Loans, Extended RF Commitments and Extended Synthetic Commitments, each Lender may extend all or a portion of its First Lien Term Loans, Revolving Facility Commitments and Synthetic L/C Commitments, or any combination thereof, as specified on the signature page hereof with respect to each such Lender.

(c) The Extended FL Term Loans (which shall be comprised of extended Initial

 

6


Term B Loans and Delayed Draw Term B Loans) and Converted Term Loans shall constitute one Facility and one Tranche after giving effect to such extensions, conversions and the Incremental Assumption Closing Date Prepayment contemplated hereby.

(d) In accordance with Section 2.11(g)(z) of the Credit Agreement, each First Lien Lender party hereto agrees that the aggregate amount of First Lien Net Proceeds received by the Borrower after the Incremental Assumption Closing Date may be applied to prepay Term Loans or permanently reduce Non-Extended RF Commitments.

SECTION 7. Representations . To induce the First Lien Lenders and the Administrative Agent to enter into this Incremental Assumption Agreement, the Borrower hereby represents and warrants to them that:

(a) The representations and warranties set forth in the Loan Documents are true and correct in all material respects as of the Incremental Assumption Closing Date, with the same effect as though made on and as of the Incremental Assumption Closing Date, except to the extent any such representation or warranty expressly relates to an earlier date (in which case such representation or warranty was true and correct in all material respects as of such earlier date).

(b) The Borrower’s consolidated balance sheet as at September 30, 2010 and its consolidated statements of income, stockholders equity and cash flows for the fiscal quarter and the portion of the fiscal year ended September 30, 2010, which were contained in the Borrower’s Form 10-Q, dated November 9, 2010, present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such date and for such period in accordance with GAAP, subject to year-end audit adjustments.

SECTION 8. Conditions to Effectiveness of Incremental Assumption Agreement .

(a) This Incremental Assumption Agreement shall become effective on the Incremental Assumption Closing Date subject to the satisfaction of each of the following conditions or the waiver thereof by the Administrative Agent:

(i) The Administrative Agent shall have received counterparts of this Incremental Assumption Agreement, duly executed and delivered by Holdings, the Borrower, the Administrative Agent and the applicable First Lien Lenders.

(ii) The First Amendment Effective Date shall have occurred (or shall occur simultaneously with the Incremental Assumption Closing Date).

(iii) The Administrative Agent shall have received the Acknowledgement and Confirmation, substantially in the form of Annex I hereto, duly executed and delivered by each of the Loan Parties.

(iv) The Administrative Agent shall have received all fees payable

 

7


thereto on or prior to the Incremental Assumption Closing Date and, to the extent invoiced, all other amounts due and payable pursuant to the Loan Documents on or prior to the Incremental Assumption Closing Date, including, to the extent invoiced, reimbursement or payment of all reasonable out-of-pocket expenses (including reasonable fees, charges and disbursements of Simpson Thacher & Bartlett LLP) required to be reimbursed or paid by the Loan Parties under any Loan Document.

(b) The changes to the Applicable Margins and to the participation fees payable with respect to the Extended FL Term Loans (including the Converted Term Loans), Extended RF Commitments and the Extended Synthetic Commitments shall commence accruing as of the Incremental Assumption Closing Date.

SECTION 9. Expenses . The Borrower hereby agrees to pay or reimburse the Administrative Agent for all its reasonable documented out-of-pocket costs and expenses incurred in connection with this Incremental Assumption Agreement, and any other documents prepared in connection herewith and the transactions contemplated hereby (including, without limitation, reasonable fees, charges and disbursements of Simpson Thacher & Bartlett LLP), in each case to the extent required by Section 10.05 of the Credit Agreement.

SECTION 10. Administrative Agent Consent . The Administrative Agent hereby agrees, for purposes of Section 2.20 of the Credit Agreement and without prejudice to or affecting Section 11, that any of the terms of the Extended FL Term Loans and Converted Term Loans provided in this Incremental Assumption Agreement, to the extent such terms differ from those provided for Term B Loans in the Loan Documents, are reasonably satisfactory to the Administrative Agent.

SECTION 11. Amendments; Execution in Counterparts . (a) This Incremental Assumption Agreement may not be amended nor may any provision hereof be waived on or prior to the Incremental Assumption Closing Date except pursuant to a writing signed by Holdings, the Borrower, the Administrative Agent and the First Lien Lenders party hereto and thereafter except as provided for in Section 10.08 of the Credit Agreement.

(b) This Incremental Assumption Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, including by means of facsimile or electronic transmission, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.

[Remainder of page intentionally left blank.]

 

8


IN WITNESS WHEREOF, the parties hereto have caused this Incremental Assumption Agreement to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written.

 

DOMUS INTERMEDIATE HOLDINGS CORP.
By:   /s/ Anthony E. Hull
  Name:   Anthony E. Hull
  Title:   Chief Financial Officer

[Signature Page to Incremental Assumption Agreement]


REALOGY CORPORATION
By:   /s/ Anthony E. Hull
  Name:   Anthony E. Hull
  Title:   Chief Financial Officer

[Signature Page to Incremental Assumption Agreement]


JPMORGAN CHASE BANK, N.A., as Administrative Agent and as Issuing Bank

By:   /s/ Neil R. Boylan
  Name:   Neil R. Boylan
  Title:   Managing Director

[Signature Page to Incremental Assumption Agreement]


1888 FUND, LTD. , as an Extending First Lien Lender
By:  

Guggenheim Investment Management, LLC

as Collateral Manager

By:   /s/ Kaitlin Trinh
  Name: Kaitlin Trinh
  Title:   Managing Director

 

[Signature Page to Incremental Assumption Agreement]


Stone Tower CLO VIII Ltd.
By:   Stone Tower Debt Advisors LLC
  as Its Collateral Manager,
  as an Extending First Lien Lender
By:   /s/ Michael W. DeiPercio
  Name: Michael W. DeiPercio
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


Contrarian Funds, LLC

By: Contrarian Capital Management, L.L.C.,

as Manager,

as an Extending First Lien Lender

By:   /s/ Janice M. Stanton
  Name: Janice M. Stanton
  Title:   Member

 

[Signature Page to Incremental Assumption Agreement]


BBT Fund, L.P., as an Extending First Lien Lender
By:   /s/ William O. Reimann
  Name: William O. Reimann
  Title:   Vice President

 

[Signature Page to Incremental Assumption Agreement]


CAP Fund, L.P., as an Extending First Lien Lender
By:   /s/ William O. Reimann
  Name: William O. Reimann
  Title:   Vice President

 

[Signature Page to Incremental Assumption Agreement]


SRI Fund, L.P., as an Extending First Lien Lender
By:   /s/ William O. Reimann
  Name: William O. Reimann
  Title:   Vice President

 

[Signature Page to Incremental Assumption Agreement]


JNL/PPM America Floating Rate Income Fund, a series of the JNL Series Trust
By:   PPM America, Inc., as sub-adviser
By:   /s/ Chris Kappas
  Name: Chris Kappas
  Title:   Managing Director

 

[Signature Page to Incremental Assumption Agreement]


SERVES 2006-1 LTD, as an Extending First Lien Lender
By:   /s/ Chris Kappas
  Name: Chris Kappas
  Title:   Managing Director

 

[Signature Page to Incremental Assumption Agreement]


Manulife Floating Rate Income Fund,
as an Extending First Lien Lender
By:   /s/ Diane R. Landers
  Name: Diane R. Landers
  Title:   VP CAO

 

[Signature Page to Incremental Assumption Agreement]


Veer Cash Flow CLO, Limited

By its investment advisor

MJX Asset Management,

as an Extending First Lien Lender

By:   /s/ Frederick H. Taylor
  Name: Frederick H. Taylor
  Title:   Managing Director

 

[Signature Page to Incremental Assumption Agreement]


Vista Leveraged Income Fund

By its investment advisor

MJX Asset Management LLC

as an Extending First Lien Lender

By:   /s/ Frederick H. Taylor
  Name: Frederick H. Taylor
  Title:   Managing Director

 

[Signature Page to Incremental Assumption Agreement]


J.P. Morgan Whitefriars Inc., as an Extending First Lien Lender
By:   /s/ Virginia R. Conway
  Name: Virginia R. Conway
  Title:   Attorney-in-Fact

 

[Signature Page to Incremental Assumption Agreement]


PACIFIC LIFE INSURANCE COMPANY

as an Extending First Lien Lender

By:   /s/ James P. Leasure
  Name: James P. Leasure
  Title:   Assistant Vice President
By:   /s/ Joseph J. Tortorelli
  Name: Joseph J. Tortorelli
  Title:   Assistant Secretary

 

[Signature Page to Incremental Assumption Agreement]


PPM Monarch Bay Funding LLC, as an Extending First Lien Lender
By:   /s/ Stacy Lai
  Name: Stacy Lai
  Title:   Assistant Vice President

 

[Signature Page to Incremental Assumption Agreement]


Hartford Mutual Funds, Inc., on behalf of The Hartford Floating Rate Fund
By Hartford Investment Management Company, its Sub-advisor
By:   /s/ Francesco Ossino
  Name: Francesco Ossino
  Title:   Senior Vice President

 

[Signature Page to Incremental Assumption Agreement]


MCDONNELL LOAN OPPORTUNITY LTD.
By:  

McDonnell Investment Management, LLC,

as Investment Manager,

as an Extending First Lien Lender
By:   /s/ Kathleen A. Zarn
  Name: Kathleen A. Zarn
  Title:   Vice President

 

[Signature Page to Incremental Assumption Agreement]


Neuberger Berman – Floating Rate Income Fund., as an Extending First Lien Lender
By:   /s/ Colin Donlan
  Name: Colin Donlan
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


Neuberger Berman Strategic Income Fund., as an Extending First Lien Lender
By:   /s/ Colin Donlan
  Name: Colin Donlan
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


EOS Senior Loans Master Fund, as an Extending First Lien Lender
By:   /s/ Steven M. Friedman
  Name: Steven M. Friedman
  Title:   Director

 

[Signature Page to Incremental Assumption Agreement]


Nob Hill CLO, Limited, as an Extending First Lien Lender
By:   /s/ Bradley Kane
  Name: Bradley Kane
  Title:   Portfolio Manager

 

[Signature Page to Incremental Assumption Agreement]


Nob Hill CLO II, Limited, as an Extending First Lien Lender
By:   /s/ Bradley Kane
  Name: Bradley Kane
  Title:   Portfolio Manager

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Senior Income Series IV
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


Ariel Reinsurance Company Ltd.
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


Managed Account Series: High Income Portfolio
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Floating Rate Income Trust
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Strategic Bond Trust
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Defined Opportunity Credit Trust
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock High Yield Trust
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Limited Duration Income Trust
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Funds II BlackRock Floating Rate Income Portfolio
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock High Income Fund of BlackRock Bond Fund, Inc.
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Funds II - High Yield Bond Portfolio
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Senior Income Series V Limited
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock High Income Portfolio of BlackRock Series Fund, Inc.
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock High Income V.I. Fund of BlackRock Variable Series Funds, Inc.
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


California State Teachers’ Retirement System
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Corporate High Yield Fund, Inc.
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Corporate High Yield Fund III, Inc.
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


Global High Yield Bond Fund, a series of DSBI - Global Investment Trust
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Debt Strategies Fund, Inc.
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Diversified Income Strategies Fund, Inc.
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


Employees’ Retirement Fund of the City of Dallas
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Fixed Income Global Opportunities Master Unit Trust
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Floating Rate Income Strategies Fund, Inc.
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Floating Rate Income Strategies Fund II, Inc.
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Global Investment Series: Income Strategies Portfolio
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock High Income Shares
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Corporate High Yield Fund VI, Inc.
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Corporate High Yield Fund V, Inc.
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


Ironshore Bank Loan Porfolio
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


LGT Multi Manager Bond High Yield (USD)
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


Lockheed-Martin Corporation Master Retirement Trust
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


Magnetite V CLO, Limited
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


Master Senior Floating Rate LLC
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


MET Investors Series Trust - BlackRock High Yield Portfolio
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


Missouri State Employees’ Retirement System
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Fixed Income Portable Alpha Master Series Trust
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


Navy Exchange Service Command Retirement Trust
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


The Obsidian Master Fund
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


Pensioenfonds Horeca & Catering
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


The PNC Financial Services Group, Inc.
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


PPL Sercies Corporation Retirement Master Trust
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Senior High Income Fund, Inc.
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Funds II. BlackRock Strategic Income Opportunities Portfolio
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


BlackRock Senior Floating Rate Portfolio
By:   /s/ C. Adrian Marshall
  Name: C. Adrian Marshall
  Title:   Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


MacKay Short Duration Alpha Fund, as an Extending First Lien Lender
By:  

MacKay Shields LLC,

as Investment Adviser and not individually

By:   /s/ Dan Roberts
  Name: Dan Roberts
  Title:   Sr. Managing Director

 

[Signature Page to Incremental Assumption Agreement]


New York Life Insurance Company (Guaranteed Products), as an Extending First Lien Lender
By:  

MacKay Shields LLC,

as Investment Adviser and not individually

By:   /s/ Dan Roberts
  Name: Dan Roberts
  Title:   Sr. Managing Director

 

[Signature Page to Incremental Assumption Agreement]


New York Life Insurance Company, GP - Portable Alpha, as an Extending First Lien Lender
By:  

MacKay Shields LLC,

as Investment Adviser and not individually

By:   /s/ Dan Roberts
  Name: Dan Roberts
  Title:   Sr. Managing Director

 

[Signature Page to Incremental Assumption Agreement]


Mainstay High Yield Opportunities Fund, a series of Eclipse Funds Inc. (F/K/A MainStay 130/30 High Yield Fund), as an Extending First Lien Lender
By:  

MacKay Shields LLC,

as Investment Adviser and not individually

By:   /s/ Dan Roberts
  Name: Dan Roberts
  Title:   Sr. Managing Director

 

[Signature Page to Incremental Assumption Agreement]


MainStay Diversified Income Fund, a series of MainStay Funds, as an Extending First Lien Lender
By:  

MacKay Shields LLC,

as Investment Adviser and not individually

By:   /s/ Dan Roberts
  Name: Dan Roberts
  Title:   Sr. Managing Director

 

[Signature Page to Incremental Assumption Agreement]


First Trust High Income Long/Short Fund, as an Extending First Lien Lender
By:  

MacKay Shields LLC,

as Sub-advisor and not individually

By:   /s/ Dan Roberts
  Name: Dan Roberts
  Title:   Sr. Managing Director

 

[Signature Page to Incremental Assumption Agreement]


Lispenard Lane Credit (Master), L.P., as an Extending First Lien Lender
By:  

DiMaio Ahmad Capital LLC,

as Investment Manager

By:   /s/ Rizwan Ahkter
  Name: Rizwan Ahkter
  Title:   Managing Director
              Authorized Signatory

 

[Signature Page to Incremental Assumption Agreement]


Ballantyne Funding LLC, as an Extending First Lien Lender
By:   /s/ Stacy Lai
  Name: Stacy Lai
  Title:   Assistant Vice President

 

[Signature Page to Incremental Assumption Agreement]


Nuveen Floating Rate Income Fund
By:   Symphony Asset Management LLC, as an Extending First Lien Lender
By:   /s/ James Kim
  Name: James Kim
  Title:   Co-Head of Credit Research

 

[Signature Page to Incremental Assumption Agreement]


Nuveen Multi-Strategy Income and Growth Fund
By:   Symphony Asset Management LLC, as an Extending First Lien Lender
By:   /s/ James Kim
  Name: James Kim
  Title:   Co-Head of Credit Research

 

[Signature Page to Incremental Assumption Agreement]


Nuveen Multi-Strategy Income and Growth Fund 2
By:   Symphony Asset Management LLC, as an Extending First Lien Lender
By:   /s/ James Kim
  Name: James Kim
  Title:   Co-Head of Credit Research

 

[Signature Page to Incremental Assumption Agreement]


Nuveen Floating Rate Income Opportunity Fund
By:   Symphony Asset Management LLC, as an Extending First Lien Lender
By:   /s/ James Kim
  Name: James Kim
  Title:   Co-Head of Credit Research

 

[Signature Page to Incremental Assumption Agreement]


Nuveen Senior Income Fund
By:   Symphony Asset Management LLC, as an Extending First Lien Lender
By:   /s/ James Kim
  Name: James Kim
  Title:   Co-Head of Credit Research

 

[Signature Page to Incremental Assumption Agreement]


Symphony Credit Opportunities Fund LTD
By:   Symphony Asset Management LLC, as an Extending First Lien Lender
By:   /s/ James Kim
  Name: James Kim
  Title:   Co-Head of Credit Research

 

[Signature Page to Incremental Assumption Agreement]


Symphony CLOV, LTD
By:   Symphony Asset Management LLC, as an Extending First Lien Lender
By:   /s/ James Kim
  Name: James Kim
  Title:   Co-Head of Credit Research

 

[Signature Page to Incremental Assumption Agreement]


Oppenheimer Senior Floating Rate Fund, as an Extending First Lien Lender
By:   /s/ Jason Reuter
  Name: Jason Reuter
  Title:   AVP

 

[Signature Page to Incremental Assumption Agreement]


Ellis Lake Master Fund, LP, as an Extending First Lien Lender
By:   /s/ Anthony Pasqua
  Name: Anthony Pasqua
  Title:   Chief Financial Officer

 

[Signature Page to Incremental Assumption Agreement]


FRANKLIN TEMP 4845 VAR INSURANCE PRDCTSTRST MUTUAL GLBL DISCOVERY SECURITIES FD, as an Extending First Lien Lender
By:   Franklin Mutual Advisers, LLC,
Extending First Lien Lender’s investment advisor
By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


MUTUAL BEACON FUND CANADA, as an Extending First Lien Lender
By:   Franklin Mutual Advisers, LLC,
Extending First Lien Lender’s investment advisor
By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


MUTUAL DISCOVERY FUND (CANADA), as an Extending First Lien Lender
By:   Franklin Mutual Advisers, LLC,
Extending First Lien Lender’s investment advisor
By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


FRANKLIN 4447 MUTUAL RECOVERY FUND, as an Extending First Lien Lender
By:   Franklin Mutual Advisers, LLC,
Extending First Lien Lender’s investment advisor
By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


FRANKLIN 11578-ING FRANKLIN MUTUAL SHARES PORTFOLIO, as an Extending First Lien Lender
By:   Franklin Mutual Advisers, LLC,
Extending First Lien Lender’s investment advisor
By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


FRANKLIN 11252-JNL FRANKLIN TEMPLETON MUTUAL SHARES FUND, as an Extending First Lien Lender
By:   Franklin Mutual Advisers, LLC,
Extending First Lien Lender’s investment advisor
By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


EQ ADVISORS TRUST – EQ/MUTUAL LARGE CAPEQUITY PORTFOLIO, as an Extending First Lien Lender
By:   Franklin Mutual Advisers, LLC,
Extending First Lien Lender’s investment advisor
By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


FRANKLIN 11583 JOHN HANCOCK TRUST MUTUALSHARES, as an Extending First Lien Lender
By:   Franklin Mutual Advisers, LLC,
Extending First Lien Lender’s investment advisor
By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


MET/FRANKLIN MUTUAL SHARES PORTFOLIO C/O FRANKLIN MUTUAL ADVISERS LLC, as an Extending First Lien Lender
By:   Franklin Mutual Advisers, LLC,
Extending First Lien Lender’s investment advisor
By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


FRANKLIN MUT13777-AZL/MUTUAL SHARES STRATEGY CP/FRANKLIN MUTUAL ADVISERS LLC,
as an Extending First Lien Lender
By:   Franklin Mutual Advisers, LLC,
Extending First Lien Lender’s investment advisor
By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


American High-Income Trust
By: Capital Research and Management Company, for and on behalf of American High-Income Trust, as an Extending First Lien Lender
By:   /s/ Michael J. Downer
  Name: Michael J. Downer
  Title:   Senior Vice President and Secretary


The Bond Fund of America, Inc.
By: Capital Research and Management Company, for and on behalf of The Bond Fund of America, Inc., as an Extending First Lien Lender
By:   /s/ Michael J. Downer
  Name: Michael J. Downer
  Title:   Senior Vice President and Secretary


The Income Fund of America
By: Capital Research and Management Company, for and on behalf of The Income Fund of America, as an Extending First Lien Lender
By:   /s/ Michael J. Downer
  Name: Michael J. Downer
  Title:   Senior Vice President and Secretary


American Funds Insurance Series, Asset Allocation Fund
By: Capital Research and Management Company, for and on behalf of American Funds Insurance Series, Asset Allocation Fund, as an Extending First Lien Lender
By:   /s/ Michael Downer
  Name: Michael Downer
  Title:   Senior Vice President and Secretary


American Funds Insurance Series, Bond Fund
By: Capital Research and Management Company, for and on behalf of American Funds Insurance Series, Bond Fund, as an Extending First Lien Lender
By:   /s/ Michael Downer
  Name: Michael Downer
  Title:   Senior Vice President and Secretary


American Funds Insurance Series, Global Bond Fund
By: Capital Research and Management Company, for and on behalf of American Funds Insurance Series, Global Bond Fund, as an Extending First Lien Lender
By:   /s/ Michael J. Downer
  Name: Michael J. Downer
  Title:   Senior Vice President and Secretary


American Funds Insurance Series, High-Income Bond Fund
By: Capital Research and Management Company, for and on behalf of American Funds Insurance Series, High-Income Bond Fund, as an Extending First Lien Lender
By:   /s/ Michael J. Downer
  Name: Michael J. Downer
  Title:   Senior Vice President and Secretary


Capital World Bond Fund
By: Capital Research and Management Company, for and on behalf of Capital World Bond Fund, as an Extending First Lien Lender
By:   /s/ Michael J. Downer
  Name: Michael J. Downer
  Title:   Senior Vice President and Secretary


Capital Guardian U.S. High-Yield Fixed-Income Master Fund
By: Capital Guardian Trust Company, for and on behalf of Capital Guardian U.S. High-Yield Fixed-Income Master Fund, as an Extending First Lien Lender
By:   /s/ Mark Brubaker
  Name: Mark Brubaker
  Title:   Senior Vice President


[CCP Credit Acquisition Holdings, LLC], as an Extending First Lien Lender
By:   /s/ Richard Grissinger
  Name: Richard Grissinger
  Title:   Authorized Signatory


Midtown Acquisitions L.P.
By: Midtown Acquisitions GP LLC, as an Extending First Lien Lender
By:   /s/ Avram Friedman
  Name: Avram Friedman
  Title:   Manager


Trilogy Portfolio Company, LLC

By: Trilogy Capital, LLC, as Managing Member,

as an Extending First Lien Lender

By:   /s/ John C. Kelty
  Name: John C. Kelty
  Title:   Authorized Signatory


PFM Meritage Offshore Fund, Ltd.,
as an Extending First Lien Lender
By:   /s/ Eric T. Moore
  Name: Eric T. Moore
  Title:   Chief Financial Officer


PFM Diversified Offshore Fund, Ltd.,
as an Extending First Lien Lender
By:   /s/ Eric T. Moore
  Name: Eric T. Moore
  Title:   Chief Financial Officer


PFM Meritage Fund, L.P.,

as an Extending First Lien Lender

By:   /s/ Eric T. Moore
  Name: Eric T. Moore
  Title:   Chief Financial Officer


PFM Diversified Fund, L.P.,

as an Extending First Lien Lender

By:   /s/ Eric T. Moore
  Name: Eric T. Moore
  Title:   Chief Financial Officer


PFM Diversified Eureka Fund, L.P.,

as an Extending First Lien Lender

By:   /s/ Eric T. Moore
  Name: Eric T. Moore
  Title:   Chief Financial Officer


This consent is made by the following Lender, acting through the undersigned as an Extending First Lien Lender
T. Rowe Price Institutional Floating Rate Fund
By:   /s/ Brian Burns
  Name: Brian Burns
  Title:   Vice President


This consent is made by the following Lender, acting through the undersigned as an Extending First Lien Lender
T. Rowe Price High Yield Fund, Inc.
By:   /s/ Brian Burns
  Name: Brian Burns
  Title:   Vice President


This consent is made by the following Lender, acting through the undersigned as an Extending First Lien Lender
T. Rowe Price Institutional High Yield Fund
By:   /s/ Brian Burns
  Name: Brian Burns
  Title:   Vice President


TURF MOOR, as an Extending First Lien Lender
By:   /s/ Scott Kerr
  Name: Scott Kerr
  Title:   Authorized Signatory


DEXTERA, as an Extending First Lien Lender
By:   /s/ Scott Kerr
  Name: Scott Kerr
  Title:   Authorized Signatory


Morgan Stanley Senior Funding, Inc., as an Extending First Lien Lender
By:   /s/ Adam Savarese
  Name: Adam Savarese
  Title:   Authorized Signatory


Taconic Capital Partners 1.5 L.P.,
By:   Taconic Capital Advisors L.P., as Investment Advisor, as an Extending First Lien Lender
By:   /s/ Jon Jachman
  Name: Jon Jachman
  Title:   Principal


Taconic Opportunity Fund L.P.,
By:   Taconic Capital Advisors L.P., as Investment Advisor, as an Extending First Lien Lender
By:   /s/ Jon Jachman
  Name: Jon Jachman
  Title:   Principal


Ares NF CLO XV Ltd, as an Extending First Lien Lender
Ares NF CLO XV Ltd
By:   Ares NF CLO XV Management, L.P., its collateral manager
By:   Ares NF CLO XV Management LLC, its general partner
By:   /s/ Americo Cascella
  Name: Americo Cascella
  Title:   Vice President


ARES ENHANCED CREDIT OPPORTUNITIES FUND LTD., as an Extending First Lien Lender
ARES ENHANCED CREDIT OPPORTUNITIES FUND LTD.
BY:   ARES ENHANCED CREDIT OPPORTUNITIES FUND MANAGEMENT, L.P., ITS MANAGER
BY:   ARES ENHANCED CREDIT OPPORTUNITIES FUND MANAGEMENT GP, LLC, AS GENERAL PARTNER
By:   /s/ Americo Cascella
  Name: Americo Cascella
  Title:   Vice President


FUTURE FUND BOARD OF GUARDIANS, as an Extending First Lien Lender
FUTURE FUND BOARD OF GUARDIANS
BY:   ARES ENHANCED LOAN INVESTMENT STRATEGY ADVISOR IV, L.P., ITS INVESTMENT MANAGER (ON BEHALF OF THE ELIS IV SUB ACCOUNT)
BY:   ARES ENHANCED LOAN INVESTMENT STRATEGY ADVISOR IV GP, LLC, ITS GENERAL PARTNER
By:   /s/ Americo Cascella
  Name: Americo Cascella
  Title:   Vice President


ARES INSTITUTIONAL LOAN FUND B.V., as an Extending First Lien Lender
ARES INSTITUTIONAL LOAN FUND B.V.
BY:   ARES MANAGEMENT LIMITED, AS MANAGER
By:   /s/ Americo Cascella
  Name: Americo Cascella
  Title:   Vice President


SEI INSTITUTIONAL INVESTMENTS TRUST ENHANCED LIBOR OPPORTUNITIES FUND, as an Extending First Lien Lender
SEI INSTITUTIONAL INVESTMENTS TRUST ENHANCED LIBOR OPPORTUNITIES FUND
BY:   ARES MANAGEMENT LIMITED, AS MANAGER
By:   /s/ Americo Cascella
  Name: Americo Cascella
  Title:   Vice President


SEI INSTITUTIONAL MANAGED TRUST ENHANCED INCOME FUND, as an Extending First Lien Lender
SEI INSTITUTIONAL MANAGED TRUST ENHANCED INCOME FUND
BY:   ARES MANAGEMENT LIMITED, AS MANAGER
By:   /s/ Americo Cascella
  Name: Americo Cascella
  Title:   Vice President


Protean CBNA Loan Funding LLC, as an Extending First Lien Lender
By:   /s/ Emily Chong
  Name: Emily Chong
  Title:   Director


First Trust Senior Floating Rate Income Fund II
By:  

First Trust Advisors L.P., its investment manager or its investment advisor,

as an Extending First Lien Lender

By:   /s/ William A. Housey, Jr.
  Name: William A. Housey, Jr.
  Title:   Senior Vice President


Sandelman Finance 2006-1, Ltd.,
By:  

Mercer Park, LP,

as Collateral Manager Lender

as an Extending First Lien Lender

By:   /s/ Peter A. Bio
  Name: Peter A. Bio
  Title:   Head of Credit


Paulson Credit Opportunities Master Ltd.,

as an Extending First Lien Lender

By:   /s/ Stuart Merzer
  Name: Stuart Merzer
  Title:   Authorized Signatory


UBS AG STAMFORD BRANCH,

as an Extending First Lien Lender

By:   /s/ Christopher Gomes
  Name:   Christopher Gomes
  Title:   Associate Director Banking Products Services, US

 

By:   /s/ Joselin Fernandes
  Name:   Joselin Fernandes
  Title:   Associate Director Banking Products Services, US


Omega Capital Partners, LP,

as an Extending First Lien Lender

By:   /s/ Vladimir Jelisavcic
  Name: Vladimir Jelisavcic
  Title:


Longacre Acquisition, LLC,

as an Extending First Lien Lender

By:   /s/ Steven Weissman
  Name: Steven Weissman
  Title:

 

Omega Capital Investors, LP,

as an Extending First Lien Lender

By:   /s/ Vladimir Jelisavdic
  Name: Vladimir Jelisavcic
  Title:


Omega Overseas Partners, LTD,

as an Extending First Lien Lender

By:   /s/ Vladimir Jelisavcic
  Name: Vladimir Jelisavcic
  Title:


ANCHORAGE CAPITAL MASTER OFFSHORE, LTD.
By:  

Anchorage Capital Group, L.L.C., Its Investment Manager,

as an Extending First Lien Lender

 

By:   /s/ Daniel Allen
  Name: Daniel Allen
  Title:   Senior Portfolio Manager


JPMorgan Strategic Income Opportunities Fund,

as an Extending First Lien Lender

By:   /s/ Michael Good
  Name: Michael Good
  Title:   Vice President


JPMorgan Chase Bank, N.A., as Trustee of the JPMorgan Chase Retirement Plan, as an Extending First Lien Lender
By:   /s/ Michael Good
  Name: Michael Good
  Title:   Vice President


SEI Institutional Investments Trust – High Yield Bond Fund, as an Extending First Lien Lender
By:   /s/ Michael Good
  Name: Michael Good
  Title:   Vice President


SEI Institutional Managed Trust – High Yield Bond Fund, as an Extending First Lien Lender
By:   /s/ Michael Good
  Name: Michael Good
  Title:   Vice President


Public Employees Retirement System of Ohio, as an Extending First Lien Lender
By:   /s/ Michael Good
  Name: Michael Good
  Title:   Vice President


Northrop Grumman Pension Master Trust, as an Extending First Lien Lender
By:   /s/ Michael Good
  Name: Michael Good
  Title:   Vice President


U.S. High Yield Bond Fund, as an Extending First Lien Lender
By:   /s/ Michael Good
  Name: Michael Good
  Title:   Vice President


California Public Employees’ Retirement System, as an Extending First Lien Lender
By:   /s/ Michael Good
  Name: Michael Good
  Title:   Vice President


WELLS FARGO ADVANTAGE UTILITIES AND HIGH INCOME FUND, as an Extending First Lien Lender
By:   /s/ Zachary Tyler
  Name: Zachary Tyler
  Title:   Authorized Signatory


WELLS FARGO ADVANTAGE MULTI-SECTOR INCOME FUND, as an Extending First Lien Lender
By:   /s/ Zachary Tyler
  Name: Zachary Tyler
  Title:   Authorized Signatory


WELLS FARGO ADVANTAGE INCOME OPPORTUNITIES FUND, as an Extending First Lien Lender
By:   /s/ Zachary Tyler
  Name: Zachary Tyler
  Title:   Authorized Signatory


WhiteHorse V, Ltd.
By:  

WhiteHorse Capital Partners, L.P.

as Collateral Manager

By:  

WhiteRock Asset Advisor, LLC, its G.P.

An Extending First Lien Partner

By:   /s/ Ethan Underwood
  Name: Ethan Underwood
  Title:   Manager


MFS VARIABLE INSURANCE TRUST on behalf of MFS Strategic Income Series*, as an Extending First Lien Lender
By:   /s/ David Cole
  Name:   David Cole
  Title:   as authorized representative and not individually


MFS Intermediate High Income Fund **, as an Extending First Lien Lender
By:   /s/ David Cole
  Name:   David Cole
  Title:   as authorized representative and not individually


MFS Intermarket Income Trust I **,

as an Extending First Lien Lender

By:   /s/ David Cole
  Name:   David Cole
  Title:   as authorized representative and not individually


MFS SERIES TRUST III on behalf of one of its series, MFS High Yield Opportunities Fund *, as an Extending First Lien Lender
By:   /s/ David Cole
  Name:   David Cole
  Title:   as authorized representative and not individually


MFS SERIES TRUST XIII on behalf of one of its Series, MFS Diversified Income Fund *, as an Extending First Lien Lender
By:   /s/ David Cole
  Name:   David Cole
  Title:   as authorized representative and not individually


MFS CHARTER INCOME TRUST **, as an Extending First Lien Lender
By:   /s/ David Cole
  Name:   David Cole
  Title:   as authorized representative and not individually


MFS VARIABLE INSURANCE TRUST II on behalf of one of its Series, MFS High Yield Portfolio*, as an Extending First Lien Lender
By:   /s/ David Cole
  Name:   David Cole
  Title:   as authorized representative and not individually


MFS SERIES TRUST III on behalf of one of its series, MFS High Income Fund *, as an Extending First Lien Lender
By:   /s/ David Cole
  Name:   David Cole
  Title:   as authorized representative and not individually


MFS SERIES TRUST VIII on behalf of one of its Series, MFS Strategic Income Fund *, as an Extending First Lien Lender
By:   /s/ David Cole
  Name:   David Cole
  Title:   as authorized representative and not individually


HIGH YIELD VARIABLE ACCOUNT, a separate account of Sun Life Assurance Company of Canada (U.S.), as an Extending First Lien Lender
By:   /s/ David Cole
  Name:   David Cole
  Title:   as authorized representative and not individually


MFS MULTIMARKET INCOME TRUST *, as an Extending First Lien Lender
By:   /s/ David Cole
  Name:   David Cole
  Title:   as authorized representative and not individually


MFS VARIABLE INSURANCE TRUST II on behalf of MFS High Income Series*, as an Extending First Lien Lender
By:   /s/ David Cole
  Name:   David Cole
  Title:   as authorized representative and not individually


MFS SPECIAL VALUE TRUST **, as an Extending First Lien Lender
By:   /s/ David Cole
  Name:   David Cole
  Title:   as authorized representative and not individually


MFS VARIABLE INSURANCE TRUST on behalf of MFS High Income Series*, as an Extending First Lien Lender
By:   /s/ David Cole
  Name:   David Cole
  Title:   as authorized representative and not individually


Genesis CLO 2007-1 Ltd. , as an Extending First Lien Lender
By:   Ore Hill Partners LLC, its Collateral Manager
By:   /s/ Claude A. Baum, Esq.
  Name: Claude A. Baum, Esq.
  Title:   General Counsel Ore Hill Partners LLC


CTTIGROUP FINANCIAL PRODUCTS Inc, as an Extending First Lien Lender
By:   /s/ Scott R. Evan
  Name: Scott R. Evan
  Title:


GENERAL ELECTRIC PENSION TRUST , as an Extending First Lien Lender
By:   GE Capital Debt Advisors LLC, as Investment Advisor
By:   /s/ John Campos
  Name: John Campos
  Title:   Authorized Signatory


FRANKLIN MUTUAL ADVISERS, LLC, as an Extending First Lien Lender
By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


MUTUAL SHARES FUND, as an Extending First Lien Lender
By:  

Franklin Mutual Advisers, LLC,

Extending First Lien Lender’s investment advisor

By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


FT434 MUTUAL SERIES FUND INC MUTUAL QUEST FUND, as an Extending First Lien Lender
By:  

Franklin Mutual Advisers, LLC,

Extending First Lien Lender’s investment advisor

By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


FT431 MUTUAL SERIES FUND INC MUTUAL BEACON FUND, as an Extending First Lien Lender
By:  

Franklin Mutual Advisers, LLC,

Extending First Lien Lender’s investment advisor

By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


FT 432 MUTUAL SERIES FUND INC-MUTUAL GLOBAL DISCOVERY FUND, as an Extending First Lien Lender
By:  

Franklin Mutual Advisers, LLC,

Extending First Lien Lender’s investment advisor

By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


FRANKLIN 4846 TEMPLETON VAR INSURANCE PRODUCTS TR-MUTUAL SHARES SECURITIES FUND, as an Extending First Lien Lender
By:  

Franklin Mutual Advisers, LLC,

Extending First Lien Lender’s investment advisor

By:   /s/ Bradley Takahashi
  Name: Bradley Takahashi
  Title:   Vice President


Onex Debt Opportunity Fund, Ltd., as an Extending First Lien Lender
By:   Onex Credit Partners LLC, its investment manager
By:   /s/ Steven Gutman
  Name: Steven Gutman
  Title:   General Counsel


OCP Investment Trust, as an Extending First Lien Lender
By:   Onex Credit Partners LLC, its investment manager
By:   /s/ Steven Gutman
  Name: Steven Gutman
  Title:   General Counsel


Stoney Lane Funding I Ltd.,
By:   HillMark Capital Management, L.P., as Collateral Manager,
as an Extending First Lien Lender
By:   /s/ Hillel Weinberger
  Name: Hillel Weinberger
  Title:   Chairman


CHASE LINCOLN FIRST COMMERCIAL CORPORATION, as an Extending First Lien Lender
By:   /s/ illegible
  Name:
  Title:


CHASE LINCOLN FIRST COMMERCIAL CORPORATION, as an Extending First Lien Lender
By:   /s/ illegible
  Name:
  Title:


JPMORGAN CHASE BANK, N.A., as an Extending First Lien Lender
By:   /s/ Neil R. Boylan
  Name: Neil R. Boylan
  Title:   Managing Director


JPMORGAN CHASE BANK, N.A., as an Extending First Lien Lender
By:   /s/ Neil R. Boylan
  Name: Neil R. Boylan
  Title:   Managing Director


JPMORGAN CHASE BANK, N.A., as an Extending First Lien Lender
By:   /s/ Neil R. Boylan
  Name: Neil R. Boylan
  Title:   Managing Director


SunAmerica Senior Floating Rate Fund, Inc., as an Extending First Lien Lender
By:   Wellington Management Company, LLP as investment advisor
By:   /s/ Robert J. Toner
  Name: Robert J. Toner
  Title:   Vice President and Counsel


Deutsche Bank AG New York Branch, as an Extending First Lien Lender
By:   DB Services New Jersey, Inc.
By:   /s/ Angeline Quintana
  Name: Angeline Quintana
  Title:   Assistant Vice President
By:   /s/ illegible
  Name: illegible
  Title:


JEFFERIES LEVERAGED CREDIT PRODUCTS,

LLC, as an Extending First Lien Lender

By:   /s/ illegible
  Name: illegible
  Title:   SVP


VICTORIA COURT CFPI LOAN FUNDING LLC, as an Extending First Lien Lender
By:   /s/ Adam Kaiser
  Name: Adam Kaiser
  Title:   Attorney-in-Fact


Ballyrock CLO 2006-1 Limited,
By:  

Ballyrock Investment Advisors LLC,

as Collateral Manager, as an Extending First Lien Lender

By:   /s/ Lisa Rymut
  Name: Lisa Rymut
  Title:   Assistant Treasurer


BARCLAYS BANK PLC,

as an Extending First Lien Lender

By:   /s/ Craig J. Malloy
  Name: Craig J. Malloy
  Title:   Director


JEFFERIES LEVERAGED CREDIT PRODUCTS,

LLC, as an Extending First Lien Lender

By:   /s/ illegible
  Name: illegible
  Title:   SVP


BLT 32 LLC , as an Extending First Lien Lender
By:   /s/ Deja Zazzarino
  Name: Deja Zazzarino
  Title:   Authorized Signatory


CREDIT SUISSE LOAN FUNDING LLC , as an

Extending First Lien Lender

By:   /s/ Sathish Shanthan
  Name: Sathish Shanthan
  Title:   Authorized Signatory
By:   /s/ Robert Franz
  Name: Robert Franz
  Title:   Managing Director


BLT 8 LLC , as an Extending First Lien Lender
By:   /s/ Deja Zazzarino
  Name: Deja Zazzarino
  Title:   Authorized Signatory


BLT 24 LLC , as an Extending First Lien Lender
By:   /s/ Deja Zazzarino
  Name: Deja Zazzarino
  Title:   Authorized Signatory


Marathon Financing I, BY, as an Extending First Lien Lender by Marathon Asset Management LP its

Collateral Manager

By:   /s/ Louis Hanover
  Name: Louis Hanover
  Title:   Chief Investment Officer


Allen Global Partners Offshore, as an Extending First

Lien Lender

By:   /s/ Kevin Medina
  Name: Kevin Medina
  Title:   Chief Compliance Officer


Allen Global Partners L.P., as an Extending First Lien Lender
By:   /s/ Kevin Medina
  Name: Kevin Medina
  Title:   Chief Compliance Officer


YORKVILLE CBNA LOAN FUNDING LLC, as an

Extending First Lien Lender

By:   /s/ Adam Kaiser
  Name: Adam Kaiser
  Title:   Attorney-in-Fact


ABS Loans Limited 2007 a subsidiary of Goldman

Sachs Institutional Funds II PLC, as an Extending First Lien Lender

By:   /s/ Sinead Murphy
  Name: Sinead Murphy
  Title:   Authorized Signatory
By:   /s/ Frances Johnson
  Name: Frances Johnson
  Title:   Authorized Signatory


Special Situations Investing Group, Inc. as an Extending First Lien Lender
By:   /s/ Robert G. Frahm III
  Name: Robert G. Frahm III
  Title:   Authorized Signatory


Goldman Sachs Credit Partners L.P., as an Extending First Lien Lender
By:   /s/ Buck Ratchford
  Name: Buck Ratchford
  Title:   Authorized Signatory


Pembroke CBNA Loan Funding, as an Extending First Lien Lender
By:   /s/ David Balmert
  Name: David Balmert
  Title:   Attorney in Kind


ColumbusNova CLO, LTD. 2007-1
By:  

ColumbusNova Credit Investment

Management LLC as Collateral Manager,

as Extending First Lien Lender

By:   /s/ Ken Selle
  Name: Ken Selle
  Title:   Managing Director


Goldman Sachs Investment Partners Master Fund, L.P.
By:  

GS Investment Strategies, LLC, as Investment

Manager, as an Extending First Lien Lender

By:   /s/ Casey Lankenan
  Name: Casey Lankenan
  Title:   Vice President


Map 102 Segregated Portfolio of LMA SPC

By:  GS Investment Strategies, LLC. as Investment

        Manager, as an Extending First Lien Lender

By:   /s/ Casey Lankenan
  Name: Casey Lankenan
  Title:   Vice President


GSIP Erisa Master Company (Ireland) Limited
By:   GS Investment Strategies, LLC. as Investment Manager, as an Extending First Lien Lender
By:   /s/ Casey Lankenan
  Name: Casey Lankenan
  Title:   Vice President


Goldman Sachs Investment Partners Aggregating Fund Holdings, L.P.
By:  

GS Investment Strategies, LLC, as Investment

Manager, as an Extending First Lien Lender

By:   /s/ Casey Lankenan
  Name:   Casey Lankenan
  Title:   Vice President


WATERSHED CAPITAL PARTNERS, L.P.

as an Extending First Lien Lender

By:   WS Partners, L.L.C., Its General Partner
By:               /s/ illegible
  Name:  
  Title:  

WATERSHED CAPITAL PARTNERS II, L.P.

as an Extending First Lien Lender

By:   WS Partners, L.L.C., Its General Partner
By:               /s/ illegible
  Name:  
  Title:  


WATERSHED CAPITAL INSTITUTIONAL PARTNERS, L.P.

as an Extending First Lien Lender

By:   WS Partners, L.L.C., Its General Partner
By:               /s/ illegible
  Name:  
  Title:  

WATERSHED CAPITAL INSTITUTIONAL PARTNERS II, L.P.

as an Extending First Lien Lender

By:   WS Partners, L.L.C., Its General Partner
By:               /s/ illegible
  Name:  
  Title:  


WATERSHED CAPITAL PARTNERS (OFFSHORE) MASTER FUND, L.P.

as an Extending First Lien Lender

By:   WS Partners, L.L.C., Its General Partner
By:               /s/ illegible
  Name:  
  Title:  

WATERSHED CAPITAL PARTNERS (OFFSHORE) MASTER FUND II, L.P.

as an Extending First Lien Lender

By:   WS Partners, L.L.C., Its General Partner
By:               /s/ illegible
  Name:  
  Title:  


Prudential Bank Loan Fund of the Prudential Trust Company Collective Trust
By:  

Prudential Investment Management, Inc.

as Investment Advisor,

as an Extending First Lien Lender

By:   /s/ Joseph Lemanowicz
  Name: Joseph Lemanowicz
  Title:   Vice President


GSO Special Situations Fund LP
By:   GSO Capital Partners LP, its investment advisor
By:   /s/ Christopher H. Sullivan
  Name: Christopher H. Sullivan
  Title:   Authorized Signatory


GSO Special Situations Fund LP
By:   GSO Capital Partners LP, its investment advisor
By:   /s/ Christopher H. Sullivan
  Name: Christopher H. Sullivan
  Title:   Authorized Signatory


GSO Special Situations Overseas Master Fund, Ltd.
By:   GSO Capital Partners LP, its investment advisor
By:   /s/ Christopher H. Sullivan
  Name: Christopher H. Sullivan
  Title:   Authorized Signatory


GSO Special Situations Overseas Master Fund, Ltd.
By:   GSO Capital Partners LP, its investment advisor
By:   /s/ Christopher H. Sullivan
  Name: Christopher H. Sullivan
  Title:   Authorized Signatory


Carlyle High Yield Partners IX, Ltd., as Extending First Lien Lender
By:   /s/ Glori H. Graziano
  Name: Glori H. Graziano
  Title:   Managing Director


Carlyle Loan Investment, Ltd. , as Extending First Lien Lender
By:   /s/ Glori H. Graziano
  Name: Glori H. Graziano
  Title:   Managing Director


Shubelik LLC
By:   The Royal Bank of Scotland plc as Attorney-in-Fact
By:  

RBS Securities Inc., its agent,

as an Extending First Lien Lender

By:   /s/ Matthew S. Rosencrans
  Name: Matthew S. Rosencrans
  Title:   Vice President


Credit Suisse AG, Cayman Islands Branch, as an Extending First Lien Lender
By:   /s/ Christopher Reo Day
  Name: Christopher Reo Day
  Title:   Vice President
By:   /s/ Rahul Parmar
  Name: Rahul Parmar
  Title:   Associate


Merrill Lynch Capital Services, Inc., as an Extending

First Lien Lender

By:   /s/ Erik S. Grossman
  Name: Erik S. Grossman
  Title:   Vice President


Merrill Lynch Credit Products, LLC, as an Extending

First Lien Lender

By:   /s/ Erik S. Grossman
  Name: Erik S. Grossman
  Title:   Vice President


Bank of America, N.A., as an Extending First Lien Lender
By:   /s/ Erik S. Grossman
  Name: Erik S. Grossman
  Title:   Vice President


TCW ABSOLUTE RETURN CREDIT FUND, L.P.
By:   Crescent Capital Group LP, its sub-adviser
as an Extending First Lien Lender
By:   /s/ Scott E. Feldman
  Name: Scott E. Feldman
  Title:   Senior Vice President
By:   /s/ Meric Topbas
  Name: Meric Topbas
  Title:   Vice President


BELL ATLANTIC MASTER TRUST
By:   Crescent Capital Group LP, its sub-adviser
as an Extending First Lien Lender
By:   /s/ Scott E. Feldman
  Name: Scott E. Feldman
  Title:   Vice President
By:   /s/ Meric Topbas
  Name: Meric Topbas
  Title:   Vice President


FIRST 2004-II CLO, LTD.
By:   TCW – WLA JV Venture LCC, its sub-adviser
as an Extending First Lien Lender
By:   /s/ Scott E. Feldman
  Name: Scott E. Feldman
  Title:   Senior Vice President
By:   /s/ Meric Topbas
  Name: Meric Topbas
  Title:   Vice President


TCW SENIOR SECURED FLOATING RATE LOAN FUND, L.P.
By:   Crescent Capital Group LP, its sub-adviser
as an Extending First Lien Lender
By:   /s/ Scott E. Feldman
  Name: Scott E. Feldman
  Title:   Senior Vice President
By:   /s/ Meric Topbas
  Name: Meric Topbas
  Title:   Vice President


PALMETTO INVESTORS MASTER FUND, LLC.

By: Crescent Capital Group LP, its sub-adviser

 

as an Extending First Lien Lender

By:   /s/ Scott E. Feldman
  Name: Scott E. Feldman
  Title:   Senior Vice President
By:   /s/ Meric Topbas
  Name: Meric Topbas
  Title:   Vice President


VITESSE CLO LTD.

By: TCW-WLA JV Venture LLC, its sub-adviser

 

as an Extending First Lien Lender

By:   /s/ Scott E. Feldman
  Name: Scott E. Feldman
  Title:   Senior Vice President
By:   /s/ Meric Topbas
  Name: Meric Topbas
  Title:   Vice President


WEST BEND MUTUAL INSURANCE COMPANY

By: Crescent Capital Group LP, its sub-adviser

 

as an Extending First Lien Lender

By:   /s/ Scott E. Feldman
  Name: Scott E. Feldman
  Title:   Senior Vice President
By:   /s/ Meric Topbas
  Name: Meric Topbas
  Title:   Vice President


ALZETTE EUROPEAN CLO S.A.

By:  INVESCO Senior Secured Management, Inc.

        as Collateral Manager

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


AVALON CAPITAL LTD. 3

By:  INVESCO Senior Secured Management, Inc.

        as Asset Manager

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


BELLHURST CLO LTD.

By:  INVESCO Senior Secured Management, Inc.

        as Collateral Manager

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


CELTS CLO 2007 -1 LTD

By:  INVESCO Senior Secured Management, Inc.

        as Portfolio Manager

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


CHAMPLAIN CLO, LTD.

By:  INVESCO Senior Secured Management, Inc.

        as Collateral Manager

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


DIVERSIFIED CREDIT PORTFOLIO LTD.

By:  INVESCO Senior Secured Management, Inc.

        as Investment Adviser

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


Invesco Floating Rate Fund

By:  INVESCO Senior Secured Management, Inc.

        as Sub-Adviser

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


HUDSON CANYON FUNDING II SUBSIDARY HOLDING COMPANY II LLC

By:  INVESCO Senior Secured Management, Inc.

        as Collateral Manager & Attorney in Fact

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


KATONAH V, LTD.

By:  INVESCO Senior Secured Management, Inc.

        as Investment Manager

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


Invesco Liquid Leveraged Loan Fund, L.P.

By:  Invesco Senior Secured Management, Inc.

        Its Full Discretion Investment Manager

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


PETRUSSE EUROPEAN CLO S.A.

By:  INVESCO Senior Secured Management, Inc.

        as Collateral Manager

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


SARATOGA CLO I, LIMITED

By:  INVESCO Senior Secured Management, Inc.

        as the Asset Manager

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


WASATCH CLO LTD

By:  INVESCO Senior Secured Management, Inc.

        as Portfolio Manager

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


Invesco Van Kampen Dynamic Credit Opportunities Fund

By:  Invesco Senior Secured Management, Inc.

        as Sub-Adviser

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


Invesco Prime Income Trust

By:  Invesco Senior Secured Management, Inc.

        as Sub-Adviser

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


Qualcomm Global Trading, Inc.

By:  Invesco Senior Secured Management, Inc.

        as Investment Manager

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


Invesco Van Kampen Senior Income Trust

By:  Invesco Senior Secured Management, Inc.

        as Sub-Adviser

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


Invesco Van Kampen Senior Loan Fund
By:  

Invesco Senior Secured Management, Inc.

as Sub-Adviser

By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


Invesco Funds III – Invesco US Senior Loan Fund
By:  

Invesco Asset Management S.A.

as Investment Manager

as an Extending First Lien Lender
By:   /s/ Thomas H. B. Ewald
  Name: Thomas H. B. Ewald
  Title:   Authorized Signatory


NCM SOLTD 2010-1 LLC, as an Extending First Lien Lender
By:   /s/ Isabella Velasquez
  Name: Isabella Velasquez
  Title:   Authorized Signatory


NCM SPLP 2010-1 LLC, as an Extending First Lien Lender
By:   /s/ Isabella Velasquez
  Name: Isabella Velasquez
  Title:   Authorized Signatory


AIB Debt Management Limited as an Extending First Lien Lender
By:   /s/ Gregory J. Wiske
  Name: Gregory J. Wiske
  Title:   Senior Vice President
              Investment Advisor to
              AIB Debt Management, Limited
By:   /s/ Keith Hamilton
  Name: Keith Hamilton
  Title:   Assistant Vice President
              Investment Advisor to
              AIB Debt Management, Limited


Allied Irish Banks, p.l.c. as an Extending First Lien Lender
By:   /s/ Gregory J. Wiske
  Name: Gregory J. Wiske
  Title:   Senior Vice President
By:   /s/ Keith Hamilton
  Name: Keith Hamilton
  Title:   Assistant Vice President


General Electric Capital Corporation, as an Extending First Lien Lender
By:   /s/ Rebecca Ford
  Name: Rebecca Ford
  Title:   Authorized Signatory


Casa Holdings II, L.L.C.
By:   GS Capital Partners VI Fund, L.P., as Manager
By:   GSCP VI Advisors, L.L.C., as General Partner
By:   /s/ Kenneth A. Pontarelli
  Name: Kenneth A. Pontarelli
  Title:   Vice President


Fernwood Associates LLC, as an Extending First Lien Lender
By:   Intermarket Corporation
By:   /s/ David B. Forer
  Name: David B. Forer
  Title:   Managing Director


Fernwood Foundation Fund LLC, as an Extending First Lien Lender
By:   Intermarket Corporation
By:   /s/ David B. Forer
  Name: David B. Forer
  Title:   Managing Director


Fernwood Restructurings Limited, as an Extending First Lien Lender
By:   /s/ David B. Forer
  Name: David B. Forer
  Title:   Director


PUTNAM VARIABLE TRUST – PVT HIGH YIELD FUND
As an Extending First Lien Lender
By:   /s/ Beth Mazor
  Name: Beth Mazor
  Title:   V.P.


PUTNAM HIGH YIELD TRUST
As an Extending First Lien Lender
By:   /s/ Beth Mazor
  Name: Beth Mazor
  Title:   V.P.


PUTNAM FLOATING RATE INCOME FUND
As an Extending First Lien Lender
By:   /s/ Beth Mazor
  Name: Beth Mazor
  Title:   V.P.


PUTNAM HIGH YIELD ADVANTAGE FUND
As an Extending First Lien Lender
By:   /s/ Beth Mazor
  Name: Beth Mazor
  Title:   V.P.


PUTNAM HIGH YIELD TRUST
As an Extending First Lien Lender
By:   /s/ Beth Mazor
  Name: Beth Mazor
  Title:   V.P.


PUTNAM DIVERSIFIED INCOME TRUST (CAYMAN) MASTER FUND
By: The Putnam Advisory Company, LLC
As an Extending First Lien Lender
By:   /s/ Angela Patel
  Name: Angela Patel
  Title:   Vice President


PUTNAM PREMIER INCOME TRUST
As an Extending First Lien Lender
By:   /s/ Beth Mazor
  Name: Beth Mazor
  Title:   V.P.


PUTNAM MASTER INTERMEDIATE INCOME TRUST
As an Extending First Lien Lender
By:   /s/ Beth Mazor
  Name: Beth Mazor
  Title:   V.P.


PUTNAM DIVERSIFIED INCOME TRUST
As an Extending First Lien Lender
By:   /s/ Beth Mazor
  Name: Beth Mazor
  Title:   V.P.


PUTNAM VARIABLE TRUST – PVT DIVERSIFIED INCOME FUND
As an Extending First Lien Lender
By:  

/s/ Beth Mazor

  Name: Beth Mazor
  Title:   V.P.


THE PUTNAM ADVISORY COMPANY, LLC

ON BEHALF OF INTERPOLIS PENSIOENEN GLOBAL HIGH YIELD POOL

As an Extending First Lien Lender
By:   /s/ Suzanne Deshaies
  Name: Suzanne Deshaies
  Title:   VP


PUTNAM FUNDS TRUST,

on behalf of its series, PUTNAM ABSOLUTE RETURN 500 FUND

by Putnam Investment Management, LLC

As an Extending First Lien Lender
By:   /s/ Suzanne Deshaies
  Name: Suzanne Deshaies
  Title:   VP


THE PUTNAM ADVISORY COMPANY, LLC ON BEHALF OF IG PUTNAM HIGH YIELD INCOME FUND
As an Extending First Lien Lender
By:   /s/ Suzanne Deshaies
  Name: Suzanne Deshaies
  Title:   VP


THE PUTNAM ADVISORY COMPANY, LLC ON BEHALF OF STICHTING PENSIOENFONDS VOOR FYSIOTHERAPEUTEN
As an Extending First Lien Lender
By:   /s/ Suzanne Deshaies
  Name: Suzanne Deshaies
  Title:   VP


PUTNAM FUNDS TRUST, on behalf of its series, PUTNAM ABSOLUTE RETURN 700 FUND

by Putnam Investment Management, LLC

As an Extending First Lien Lender
By:   /s/ Suzanne Deshaies
  Name: Suzanne Deshaies
  Title:   VP


ColumbusNova CLO, LTD. 2007-I
By:  

ColumbusNova Credit Investment Management LLC as Collateral Manager

as an Extending First Lien Lender

By:   /s/ Ken Selle
  Name: Ken Selle
  Title:   Managing Director


Thracia LLC,

as an Extending First Lien Lender

By:   /s/ Dhananjay Pai
  Name: Dhananjay Pai
  Title:   Chief Operating Officer


ROCHDALE FIXED INCOME OPPORTUNITIES PORTFOLIO
By:   Seix Investment Advisors LLC, as Sub-Adviser and as an Extending First Lien Lender
By:   /s/ George Goudelias
  Name: George Goudelias
  Title:   Managing Director


RIDGEWORTH FUNDS – SEIX FLOATING RATE HIGH INCOME FUND
By:   Seix Investment Advisors LLC, as Sub-Adviser and as an Extending First Lien Lender r
By:   /s/ George Goudelias
  Name: George Goudelias
  Title:   Managing Director


Pacifica CDO V, as an Extending First Lien Lender
By:   /s/ Ronald M. Grobeck
  Name: Ronald M. Grobeck
  Title:   Managing Director


Pacifica CDO VI, as an Extending First Lien Lender
By:   /s/ Ronald M. Grobeck
  Name: Ronald M. Grobeck
  Title:   Managing Director


Prospero CLO I BV, as an Extending First Lien Lender
By:   /s/ Ronald M. Grobeck
  Name: Ronald M. Grobeck
  Title:   Managing Director


Prospero CLO II BV, as an Extending First Lien Lender
By:   /s/ Ronald M. Grobeck
  Name: Ronald M. Grobeck
  Title:   Managing Director


Veritas CLO I, Ltd., as an Extending First Lien Lender
By:   /s/ Ronald M. Grobeck
  Name: Ronald M. Grobeck
  Title:   Managing Director


Veritas CLO II Ltd., as an Extending First Lien Lender
By:   /s/ Ronald M. Grobeck
  Name: Ronald M. Grobeck
  Title:   Managing Director


GULF STREAM-COMPASS CLO 2007-1 LTD
By:  

Gulf Stream Asset Management LLC

as Collateral Manager

as an Extending First Lien Lender
By:   /s/ Barry Love
  Name: Barry Love
  Title:   Chief Credit Officer


GULF STREAM-SEXTANT CLO 2007-I LTD
By:  

Gulf Stream Asset Management LLC

as Collateral Manager

as an Extending First Lien Lender
By:   /s/ Barry Love
  Name: Barry Love
  Title:   Chief Credit Officer


Aberdeen Loan Funding Ltd
By:  

Highland Capital Management, L.P.,

as Collateral Manager

By:  

Strand Advisors, Inc.,

Its General Partner

as an Extending First Lien Lender
By:   /s/ Jason Post
  Name: Jason Post
  Title:   Operations Director


Armstrong Loan Funding, LTD.
By:  

Highland Capital Management, L.P.,

as Collateral Manager

By:   Strand Advisors, Inc.,
  Its General Partner
as an Extending First Lien Lender
By:   /s/ Jason Post
  Name: Jason Post
  Title:   Operations Director


Highland Credit Opportunities CDO Ltd.
By:  

Highland Capital Management, L.P.,

as Collateral Manager

By:  

Strand Advisors, Inc.,

Its General Partner

as an Extending First Lien Lender
By:   /s/ Jason Post
  Name: Jason Post
  Title:   Operations Director


Highland Offshore Partners, L.P.
By:  

Highland Capital Management, L.P.,

as Collateral Manager

By:   Strand Advisors, Inc., Its General Partner
as an Extending First Lien Lender
By:   /s/ Jason Post
  Name: Jason Post
  Title:   Operations Director


Fidelity Advisor Series 1:

Fidelity Advisor High

Income Advantage Fund,

as an Extending First Lien Lender

By:   /s/ Jeffrey Christian
  Name: Jeffrey Christian
  Title:   Deputy Treasurer


Fidelity American High Yield Fund, For:

Fidelity Investments Canada, Limited, as Trustee of Fidelity American High Yield Fund,

as an Extending First Lien Lender

By:   /s/ Jeffrey Christian
  Name: Jeffrey Christian
  Title:   Deputy Treasurer


Fidelity Puritan Trust:

Fidelity Puritan Fund,

as an Extending First Lien Lender

By:   /s/ Jeffrey Christian
  Name: Jeffrey Christian
  Title:   Deputy Treasurer


Fidelity Canadian Asset Allocation Fund, For: Fidelity Investments Canada, Limited, as Trustee of Fidelity Canadian Asset Allocation Fund,

as an Extending First Lien Lender

By:   /s/ Jeffrey Christian
  Name: Jeffrey Christian
  Title:   Deputy Treasurer


Fidelity Canadian Balance Fund, For:

Fidelity Investments Canada, Limited, as Trustee of Fidelity Canadian Balanced Fund,

as an Extending First Lien Lender

By:   /s/ Jeffrey Christian
  Name: Jeffrey Christian
  Title:   Deputy Treasurer


IG Investment Management Ltd., as trustee for IG FI Canadian Allocation Fund,
By:   Pyramid Global Advisors LLC as Authorized Signatory, as an Extending First Lien Lender
By:   /s/ Lynn H. Farrand
  Name: Lynn H. Farrand
  Title:   Director


XELO VII LIMITED,
as an Extending First Lien Lender
By:   Babson Capital Management LLC as Sub-Advisor
By:   /s/ Thomas Q. McDonnell
  Name: Thomas Q. McDonnell
  Title:   Managing Director


OSPREY CDO 2006-1 LTD. , as an Extending First Lien Lender
By:   Babson Capital Management LLC as Collateral Manager
By:   /s/ Thomas Q. McDonnell
  Name: Thomas Q. McDonnell
  Title:   Managing Director


BILL & MELINDA GATES FOUNDATION TRUST,

as an Extending First Lien Lender

By:   Babson Capital Management LLC as Investment Adviser
By:   /s/ Thomas Q. McDonnell
  Name: Thomas Q. McDonnell
  Title:   Managing Director


SAPPHIRE VALLEY CDO I, LTD. , as an Extending First Lien Lender
By:   Babson Capital Management LLC as Collateral Manager
By:   /s/ Thomas Q. McDonnell
  Name: Thomas Q. McDonnell
  Title:   Managing Director


LOAN STRATEGIES FUNDING LLC, as an Extending First Lien Lender
By:  

Babson Capital Management LLC as Collateral

Manager

By:   /s/ Thomas Q. McDonnell
  Name: Thomas Q. McDonnell
  Title:   Managing Director


GMAM GROUP PENSION TRUST III, as an Extending First Lien Lender
By:  

Babson Capital Management LLC as Investment

Manager

By:   /s/ Thomas Q. McDonnell
  Name: Thomas Q. McDonnell
  Title:   Managing Director


JEFFERIES FINANCE CP FUNDING LLC , as an Extending First Lien Lender
By:   /s/ Kevin Stephens
  Name: Kevin Stephens
  Title:   Closing Manager


JFIN CLO 2007 LTD., as an Extending First Lien Lender
By:   Jefferies Finance LLC as Collateral Manager
By:   /s/ Kevin Stephens
  Name: Kevin Stephens
  Title:   Closing Manager


BABSON CREDIT STRATEGIES CLO, LTD. ,

as an Extending First Lien Lender

By:  

Babson Capital Management LLC

as Collateral Manager

By:   /s/ Thomas Q. McDonnell
  Name: Thomas Q. McDonnell
  Title:   Managing Director


BABSON LOAN OPPORTUNITY CLO, LTD. ,

as an Extending First Lien Lender

By:  

Babson Capital Management LLC

as Collateral Manager

By:   /s/ Thomas Q. McDonnell
  Name: Thomas Q. McDonnell
  Title:   Managing Director


BABSON MID-MARKET CLO LTD. 2007-II. ,

as an Extending First Lien Lender

By:   Babson Capital Management LLC
  as Collateral Manager
By:   /s/ Thomas Q. McDonnell
  Name:   Thomas Q. McDonnell
  Title:   Managing Director


BABSON CLO LTD. 2007-I , as an Extending First Lien Lender
By:   Babson Capital Management LLC
  as Collateral Manager
By:   /s/ Thomas Q. McDonnell
  Name:   Thomas Q. McDonnell
  Title:   Managing Director


BABSON CLO LTD. 2006-II , as an Extending First Lien Lender
By:   Babson Capital Management LLC
  as Collateral Manager
By:   /s/ Thomas Q. McDonnell
  Name:   Thomas Q. McDonnell
  Title:   Managing Director


BABSON CLO LTD. 2006-I , as an Extending First Lien Lender
By:   Babson Capital Management LLC
  as Collateral Manager
By:   /s/ Thomas Q. McDonnell
  Name:   Thomas Q. McDonnell
  Title:   Managing Director


BABSON CLO LTD. 2005-III , as an Extending First Lien Lender
By:   Babson Capital Management LLC
  as Collateral Manager
By:   /s/ Thomas Q. McDonnell
  Name:   Thomas Q. McDonnell
  Title:   Managing Director


BABSON CLO LTD. 2005-I , as an Extending First Lien Lender
By:   Babson Capital Management LLC
  as Collateral Manager
By:   /s/ Thomas Q. McDonnell
  Name:   Thomas Q. McDonnell
  Title:   Managing Director


BABSON CLO LTD. 2005-II , as an Extending First Lien Lender
By:   Babson Capital Management LLC
  as Collateral Manager
By:   /s/ Thomas Q. McDonnell
  Name:   Thomas Q. McDonnell
  Title:   Managing Director


KKR Financial CLO 2007-A, Ltd.,

as an Extending First Lien Lender

By:   /s/ Alexandra Ochev
  Name:   Alexandra Ochev
  Title:   Authorized Signatory


KKR Financial CLO 2007-A, Ltd.,

as an Extending First Lien Lender

By:   /s/ Alexandra Ochev
  Name:   Alexandra Ochev
  Title:   Authorized Signatory


KKR Financial CLO 2005-2, Ltd.,

 

as an Extending First Lien Lender

By:   /s/ Alexandra Ochev
  Name:   Alexandra Ochev
  Title:   Authorized Signatory


KKR Financial CLO 2005-2, Ltd.,
as an Extending First Lien Lender
By:   /s/ Alexandra Ochev
  Name:   Alexandra Ochev
  Title:   Authorized Signatory


KKR Financial CLO 2005-1, Ltd.,
as an Extending First Lien Lender
By:   /s/ Alexandra Ochev
  Name:   Alexandra Ochev
  Title:   Authorized Signatory


KKR Financial CLO 2005-1, Ltd.,
as an Extending First Lien Lender
By:   /s/ Alexandra Ochev
  Name:   Alexandra Ochev
  Title:   Authorized Signatory


KKR Financial CLO 2006-1, Ltd.,
as an Extending First Lien Lender
By:   /s/ Alexandra Ochev
  Name:   Alexandra Ochev
  Title:   Authorized Signatory


KKR Financial CLO 2006-1, Ltd.,
as an Extending First Lien Lender
By:   /s/ Alexandra Ochev
  Name:   Alexandra Ochev
  Title:   Authorized Signatory


Oregon Public Employees Retirement Fund,
as an Extending First Lien Lender
By:   /s/ Alexandra Ochev
  Name:   Alexandra Ochev
  Title:   Authorized Signatory


KKR FI Partners I, L.P.,
as an Extending First Lien Lender
By:   /s/ Alexandra Ochev
  Name:   Alexandra Ochev
  Title:   Authorized Signatory


KKR Debt Investors II (2006) (Ireland) L.P.,
as an Extending First Lien Lender
By:   /s/ Alexandra Ochev
  Name:   Alexandra Ochev
  Title:   Authorized Signatory


KKR Corporate Credit Partners, L.P.,
as an Extending First Lien Lender
By:   /s/ Alexandra Ochev
  Name:   Alexandra Ochev
  Title:   Authorized Signatory


Maryland State Retirement and Pension System,
as an Extending First Lien Lender
By:   /s/ Alexandra Ochev
  Name:   Alexandra Ochev
  Title:   Authorized Signatory


Western Asset Management Company as Agent and Investment Manager on behalf of John Hancock Fund II Floating Rate Income Trust, as an Extending First Lien Lender
By:   /s/ Kim Nguyen
  Name: Kim Nguyen
  Title:   Authorized Signatory


CITIGROUP FINANCIAL PRODUCTS Inc, as an Extending First Lien Lender
By:   /s/ Scott R. Evan
  Name: Scott R. Evan
  Title:   Authorized Signatory


Western Asset Management Company as Agent and Investment Manager on behalf of Western Asset Floating Rate High Income Fund LLC, as an Extending First Lien Lender
By:   /s/ Kim Nguyen
  Name: Kim Nguyen
  Title:   Authorized Signatory


Caspian Select Credit Master Fund, Ltd.
By:   Mariner Investment Group, as Investment Advisor,
as an Extending First Lien Lender
By:   /s/ David Corleto
  Name: David Corleto
  Title:   Principal, Mariner Investment Group,
              as Investment Manager


Mariner LDC
By:   Mariner Investment Group, as Investment Advisor,
as an Extending First Lien Lender
By:   /s/ David Corleto
  Name: David Corleto
  Title:   Principal, Mariner Investment Group,
              as Investment Manager


Caspian Capital Partners, L.P.
By:   Mariner Investment Group, as Investment Advisor,
as an Extending First Lien Lender
By:   /s/ David Corleto
  Name: David Corleto
  Title:   Principal, Mariner Investment Group,
              as Investment Manager


Race Point III CLO

By: Sankaty Advisors LLC, as Collateral Manager

By:   /s/ Andrew S. Viens
  Name: Andrew S. Viens
  Title:   Sr. Vice President of Operations


Race Point IV CLO, Ltd
By: Sankaty Advisors LLC, as Collateral Manager
By:   /s/ Andrew S. Viens
  Name: Andrew S. Viens
  Title:   Sr. Vice President of Operations


ACKNOWLEDGMENT AND CONFIRMATION

1. Reference is made to the Incremental Assumption Agreement, dated as of February 3, 2011(the “ Incremental Assumption Agreement ”), to the Credit Agreement, dated as of April 10, 2007 (as amended by the First Amendment, dated as of the date hereof, the “ Credit Agreement ”), among Domus Intermediate Holdings Corp. (“ Holdings ”), Realogy Corporation (the “ Borrower ”), the lenders from time to time party thereto (the “ Lenders ”), JPMorgan Chase Bank, N.A. (“ JPMorgan Chase Bank ”), as administrative agent (the “ Administrative Agent ”), and the other agents from time to time party thereto.

2. The Credit Agreement is being supplemented pursuant to the Incremental Assumption Agreement. Each of the parties hereto hereby agrees, with respect to each Loan Document to which it is a party:

(a) all of its obligations, liabilities and indebtedness under such Loan Document shall remain in full force and effect on a continuous basis after giving effect to the Incremental Assumption Agreement; and

(b) all of the Liens and security interests created and arising under such Loan Document remain in full force and effect on a continuous basis, and the perfected status and priority of each such Lien and security interest continues in full force and effect on a continuous basis, unimpaired, uninterrupted and undischarged, after giving effect to the Incremental Assumption Agreement, as collateral security for its obligations, liabilities and indebtedness under the Credit Agreement and under its guarantees in the Loan Documents.

3. THIS ACKNOWLEDGMENT AND CONFIRMATION SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

4. This Acknowledgment and Confirmation may be executed by one or more of the parties hereto on any number of separate counterparts (including by facsimile or email), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

[Remainder of page intentionally left blank.]

[Acknowledgement and Confirmation]


DOMUS INTERMEDIATE HOLDINGS CORP.
By:   /s/ Anthony E. Hull
  Name:   Anthony E. Hull
  Title:   Chief Financial Officer

[Acknowledgement and Confirmation]


REALOGY CORPORATION
By:   /s/ Anthony E. Hull
  Name:   Anthony E. Hull
  Title:   Chief Financial Officer

[Acknowledgement and Confirmation]


CARTUS CORPORATION

 

CDRE TM LLC

 

DOMUS INTERMEDIATE HOLDINGS CORP.

 

NRT INSURANCE AGENCY, INC.

 

REALOGY CORPORATION

 

REALOGY OPERATIONS LLC

 

REALOGY SERVICES GROUP LLC

 

REALOGY SERVICES VENTURE PARTNER LLC

 

SOTHEBY’S INTERNATIONAL REALTY LICENSEE LLC

 

WREM, INC.

By:   /s/ Anthony E. Hull
  Name:   Anthony E. Hull
  Title:   Chief Financial Officer

[Acknowledgement and Confirmation]


CARTUS ASSET RECOVERY CORPORATION

 

CARTUS PARTNER CORPORATION

 

J. W. RIKER – NORTHERN R.I., INC.

 

FEDSTATE STRATEGIC CONSULTING, INCORPORATED

 

LAKECREST TITLE, LLC

 

NRT PHILADELPHIA LLC

 

REFERRAL NETWORK LLC

 

THE CORCORAN GROUP EASTSIDE, INC.

By:   /s/ Anthony E. Hull
  Name:   Anthony E. Hull
  Title:   Executive Vice President & Treasurer

[Acknowledgement and Confirmation]


AMERICAN TITLE COMPANY OF HOUSTON

 

ATCOH HOLDING COMPANY

 

BURNET TITLE LLC

 

BURNET TITLE HOLDING LLC

 

BURROW ESCROW SERVICES, INC.

 

CORNERSTONE TITLE COMPANY

 

EQUITY TITLE COMPANY

 

EQUITY TITLE MESSENGER SERVICE HOLDING LLC

 

FIRST CALIFORNIA ESCROW CORPORATION

 

FRANCHISE SETTLEMENT SERVICES LLC

 

GUARDIAN HOLDING COMPANY

 

GUARDIAN TITLE AGENCY, LLC

 

GUARDIAN TITLE COMPANY

 

GULF SOUTH SETTLEMENT SERVICES, LLC

 

KEYSTONE CLOSING SERVICES LLC

 

MARKET STREET SETTLEMENT GROUP LLC

 

MID-ATLANTIC SETTLEMENT SERVICES LLC

 

NATIONAL COORDINATION ALLIANCE LLC

 

NRT SETTLEMENT SERVICES OF MISSOURI LLC

 

NRT SETTLEMENT SERVICES OF TEXAS LLC

 

PROCESSING SOLUTIONS LLC

 

SECURED LAND TRANSFERS LLC

 

ST. JOE TITLE SERVICES LLC

 

TAW HOLDING INC.

 

TEXAS AMERICAN TITLE COMPANY

 

TITLE RESOURCE GROUP AFFILIATES HOLDINGS LLC

By:   /s/ Thomas N. Rispoli
  Name:   Thomas N. Rispoli
  Title:   Chief Financial Officer

[Acknowledgement and Confirmation]


TITLE RESOURCE GROUP HOLDINGS LLC

 

TITLE RESOURCE GROUP LLC

 

TITLE RESOURCE GROUP SERVICES LLC

 

TITLE RESOURCES INCORPORATED

 

TRG SERVICES, ESCROW, INC.

 

TRG SETTLEMENT SERVICES, LLP

 

WAYDAN TITLE, INC.

 

WEST COAST ESCROW COMPANY

By:   /s/ Thomas N. Rispoli
  Name:   Thomas N. Rispoli
  Title:   Chief Financial Officer

[Acknowledgement and Confirmation]


BETTER HOMES AND GARDENS REAL ESTATE LLC

 

BETTER HOMES AND GARDENS REAL ESTATE LICENSEE LLC

 

CENTURY 21 REAL ESTATE LLC

 

CGRN, INC.

 

COLDWELL BANKER LLC

 

COLDWELL BANKER REAL ESTATE LLC

 

ERA FRANCHISE SYSTEMS LLC

 

GLOBAL CLIENT SOLUTIONS LLC

 

ONCOR INTERNATIONAL LLC

 

REALOGY FRANCHISE GROUP LLC

 

REALOGY GLOBAL SERVICES LLC

 

REALOGY LICENSING LLC

 

SOTHEBY’S INTERNATIONAL REALTY AFFILIATES LLC

 

WORLD REAL ESTATE MARKETING LLC

By:   /s/ Andrew G. Napurano
  Name:   Andrew G. Napurano
  Title:   Chief Financial Officer

[Acknowledgement and Confirmation]


FSA MEMBERSHIP SERVICES, LLC
By:   /s/ Marilyn J. Wasser
  Name:   Marilyn J. Wasser
  Title:   Executive Vice President

[Acknowledgement and Confirmation]


ALPHA REFERRAL NETWORK LLC

 

ASSOCIATED CLIENT REFERRAL LLC

 

BURGDORFF LLC

 

BURGDORFF REFERRAL ASSOCIATES LLC

 

BURNET REALTY LLC

 

CAREER DEVELOPMENT CENTER, LLC

 

COLDWELL BANKER COMMERCIAL PACIFIC PROPERTIES LLC

 

COLDWELL BANKER PACIFIC PROPERTIES LLC

 

COLDWELL BANKER REAL ESTATE SERVICES LLC

 

COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY

 

COLDWELL BANKER RESIDENTIAL BROKERAGE LLC

 

COLDWELL BANKER RESIDENTIAL REAL ESTATE LLC

 

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK

 

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK, INC.

 

COLORADO COMMERCIAL, LLC

 

HOME REFERRAL NETWORK LLC

 

JACK GAUGHEN LLC

 

NRT ARIZONA LLC

 

NRT ARIZONA COMMERCIAL LLC

 

NRT ARIZONA REFERRAL LLC

 

NRT COLORADO LLC

 

NRT COLUMBUS LLC

 

NRT COMMERCIAL LLC

By:   /s/ Kevin R. Greene
  Name:   Kevin R. Greene
  Title:   Chief Financial Officer

[Acknowledgement and Confirmation]


NRT COMMERCIAL UTAH LLC

 

NRT DEVELOPMENT ADVISORS LLC

 

NRT DEVONSHIRE LLC

 

NRT HAWAII REFERRAL, LLC

 

NRT LLC

 

NRT MID-ATLANTIC LLC

 

NRT MISSOURI LLC

 

NRT MISSOURI REFERRAL NETWORK LLC

 

NRT NEW ENGLAND LLC

 

NRT NEW YORK LLC

 

NRT NORTHFORK LLC

 

NRT PITTSBURGH LLC

 

NRT REFERRAL NETWORK LLC

 

NRT RELOCATION LLC

 

NRT REOEXPERTS LLC

 

NRT SUNSHINE INC.

 

NRT TEXAS LLC

 

NRT UTAH LLC

 

REAL ESTATE REFERRAL LLC

 

REAL ESTATE REFERRALS LLC

 

REAL ESTATE SERVICES LLC

 

REFERRAL ASSOCIATES OF NEW ENGLAND LLC

 

REFERRAL NETWORK, LLC

 

REFERRAL NETWORK PLUS, INC.

 

SOTHEBY’S INTERNATIONAL REALTY, INC.

 

SOTHEBY’S INTERNATIONAL REALTY REFERRAL COMPANY, LLC

 

THE SUNSHINE GROUP (FLORIDA) LTD. CORP.

 

THE SUNSHINE GROUP, LTD.

 

VALLEY OF CALIFORNIA, INC.

By:   /s/ Kevin R. Greene
  Name:   Kevin R. Greene
  Title:   Chief Financial Officer

[Acknowledgement and Confirmation]

Exhibit 10.9

 

 

 

COLLATERAL AGREEMENT

dated and effective as of

February 3, 2011

among

DOMUS INTERMEDIATE HOLDINGS CORP.,

as Guarantor

REALOGY CORPORATION,

each other Grantor

party hereto

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

as Collateral Agent

 

 

 


Table of Contents

 

     Page  
ARTICLE I   
Definitions   

SECTION 1.01.      Indenture

     5   

SECTION 1.02.      Other Defined Terms

     6   
ARTICLE II   
[RESERVED]   
ARTICLE III   
Pledge of Securities   

SECTION 3.01.      Pledge

     11   

SECTION 3.02.      Delivery of the Pledged Collateral

     12   

SECTION 3.03.      Representations, Warranties and Covenants

     13   

SECTION 3.04.      Registration in Nominee Name; Denominations

     15   

SECTION 3.05.      Voting Rights; Dividends and Interest, Etc .

     15   
ARTICLE IV   
Security Interests in Other Personal Property   

SECTION 4.01.      Security Interest

     18   

SECTION 4.02.     Representations and Warranties

     19   

SECTION 4.03.      Covenants

     22   

SECTION 4.04.      Other Actions

     24   

SECTION 4.05.      Covenants Regarding Patent, Trademark and Copyright Collateral

     25   

SECTION 4.06.      Insurance

     27   
ARTICLE V   
Remedies   

SECTION 5.01.      Remedies Upon Default

     28   

SECTION 5.02.      Application of Proceeds

     29   

SECTION 5.03.      Securities Act, Etc .

     30   
ARTICLE VI   
Indemnity, Subrogation and Subordination   

SECTION 6.01.      Indemnity

     31   

 

i


SECTION 6.02.      Contribution and Subrogation

     31   

SECTION 6.03.      Subordination; Subrogation

     31   
ARTICLE VII   
Miscellaneous   

SECTION 7.01.      Notices

     33   

SECTION 7.02.      [RESERVED]

     34   

SECTION 7.03.      Limitation By Law

     34   

SECTION 7.04.      Binding Effect; Several Agreement

     34   

SECTION 7.05.      Successors and Assigns

     34   

SECTION 7.06.      Collateral Agent’s Fees and Expenses; Indemnification

     35   

SECTION 7.07.      Collateral Agent Appointed Attorney-in-Fact

     35   

SECTION 7.08.      Governing Law

     36   

SECTION 7.09.      Waivers; Amendment

     36   

SECTION 7.10.      WAIVER OF JURY TRIAL

     36   

SECTION 7.11.      Severability

     37   

SECTION 7.12.      Counterparts

     37   

SECTION 7.13.      Headings

     37   

SECTION 7.14.      Jurisdiction; Consent to Service of Process

     37   

SECTION 7.15.      Termination or Release

     38   

SECTION 7.16.      Additional Subsidiaries

     38   

SECTION 7.17.      No Limitations, Etc.

     38   

SECTION 7.18.      Secured Party Authorizations and Indemnifications

     40   

SECTION 7.19.      Securitization Acknowledgements

     40   

SECTION 7.20.      Successor Collateral Agent

     43   
ARTICLE VIII   
The Collateral Agent   

SECTION 8.01.      The Collateral Agent

     43   
ARTICLE IX   
The Intercreditor Agreement   

SECTION 9.01.      The Intercreditor Agreement

     44   

 

ii


Schedules

Schedule I

  

Pledged Stock; Debt Securities

Schedule II

  

Intellectual Property

Schedule III

  

Commercial Tort Claims

Schedule IV

  

Filing Offices

Exhibits

Exhibit I

  

Form of Supplement to the Collateral Agreement

Exhibit II

  

Apple Ridge Securitization Documents

 

i


COLLATERAL AGREEMENT, dated and effective as of February 3, 2011 (this “ Agreement ”), among DOMUS INTERMEDIATE HOLDINGS CORP. (“ Intermediate Holdings ”), REALOGY CORPORATION (the “ Company ”), each Subsidiary Grantor identified herein and party hereto (together with Intermediate Holdings, the Company and any other entity that may become a party hereto as provided herein, the “ Grantors ”) and THE BANK OF NEW YORK MELLON TRUST COMPANY. N.A., as collateral agent (in such capacity, the “ Collateral Agent ”) for the Secured Parties (as defined below).

PRELIMINARY STATEMENT

Reference is made to the Indenture dated as of February 3, 2011 (as amended, restated, supplemented, waived or otherwise modified from time to time, the “ Indenture ”), among the Company, Intermediate Holdings, Domus Holding Corp., a Delaware corporation, the Subsidiaries (such term, and all other capitalized terms used herein, as defined and otherwise referenced pursuant to Section 1.01) of the Company party thereto as guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee (in such capacity, the “ Trustee ”), pursuant to which the Company has duly authorized the issue of 7.875% Senior Secured Notes Due 2019 (as further defined in the Indenture, the “ Notes ”).

The Holders have agreed to extend credit to the Company subject to the terms and conditions set forth in the Indenture. The obligations of the Holders to extend such credit are conditioned upon, among other things, the execution and delivery of this Agreement. The Grantors are affiliates of the Company, will derive substantial benefits from the extension of credit to the Company pursuant to the Indenture and the Notes and are willing to execute and deliver this Agreement in order to induce the Holders to extend such credit. The Grantors (other than the Company) have guaranteed the obligations of the Company under the Notes. Each Grantor is entering into this Agreement in order to induce the Holders to purchase the Notes and to secure obligations under the Note Documents.

The priority of the Liens and Security Interests created by this Agreement and the right of the Secured Parties to exercise rights and remedies under this Agreement or with respect to the Collateral are subject to the terms of the Intercreditor Agreements.

Now therefore, in consideration of the mutual covenants and agreements of the parties and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Indenture . (a) Capitalized terms used in this Agreement and not otherwise defined herein have the respective meanings assigned thereto in the Indenture. All terms defined in the New York UCC (as defined herein) and not defined in this Agreement have the meanings specified therein. The term “instrument” shall have the meaning specified in Article 9 of the New York UCC.


(b) The rules of construction specified in Section 1.04 of the Indenture also apply to this Agreement.

SECTION 1.02. Other Defined Terms . As used in this Agreement, the following terms have the meanings specified below:

Acceleration Event ” means after, or concurrently with, the occurrence of an Event of Default, the maturity of any of the Secured Obligations shall have been accelerated.

Account Debtor ” means any person who is or who may become obligated to any Grantor under, with respect to or on account of an Account, Chattel Paper, General Intangibles, Instruments or Investment Property.

Agreement ” has the meaning assigned to such term in the introductory paragraph of this Agreement.

Article 9 Collateral ” has the meaning assigned to such term in Section 4.01(a).

Issue Date ” means the date of the Indenture.

Collateral ” means the Article 9 Collateral and the Pledged Collateral.

Collateral Agent ” has the meaning assigned to such term in the introductory paragraph of this Agreement.

Collateral Documents ” has the meaning assigned to such term in the Indenture.

Company ” has the meaning assigned to such term in the introductory paragraph of this Agreement.

Company Obligations ” means (a) the due and punctual payment by the Company of (i) the unpaid principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Notes, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations of the Company to any of the Secured Parties under the Indenture and each of the other Note Documents, including obligations to pay fees, expenses and indemnification obligations, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) and (b) the due and punctual payment of all the obligations of each other Grantor under or pursuant to this Agreement and each of the other Note Documents.

Copyright License ” means any written agreement, now or hereafter in effect, granting any right to any Grantor under any Copyright now or hereafter owned by any

 

6


third party, and all rights of any Grantor under any such agreement (including, without limitation, any such rights that such Grantor has the right to license).

Copyrights ” means all of the following now owned or hereafter acquired by any Grantor: (a) all copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise; (b) all registrations and applications for registration of any such Copyright in the United States or any other country, including registrations, supplemental registrations and pending applications for registration in the United States Copyright Office and the right to obtain all renewals thereof, including those listed on Schedule II ; (c) all claims for, and rights to sue for, past or future infringements of any of the foregoing; and (d) all income, royalties, damages and payments now or hereafter due and payable with respect to any of the foregoing, including damages and payments for past or future infringement thereof.

Excluded Property ” means (1) any vehicle covered by a certificate of title or ownership, (2) any cash, deposit accounts and securities accounts, (3) (i) Equity Interests representing more than 65% of the issued and outstanding voting Equity Interests in any “first- tier” Foreign Subsidiary directly owned by Intermediate Holdings, the Company or any Subsidiary Grantor, (ii) Equity Interests representing more than 65% of the issued and outstanding voting Equity Interests in any “first-tier” Qualified CFC Holding Company directly owned by Intermediate Holdings, the Company or any Subsidiary Grantor, (iii) any issued and outstanding Equity Interest in any Foreign Subsidiary that is not a “first-tier” Foreign Subsidiary, (iv) any issued and outstanding Equity Interests in any Qualified CFC Holding Company that is not a “first-tier” Qualified CFC Holding Company and (v) any issued and outstanding Equity Interests in Title Resource Group Settlement Services, LLC (f/k/a APEX Real Estate Information Services Alabama, L.L.C.), Prime Commercial, Inc. and Realty Stars, Ltd., the Equity Interests of which are not pledged for the benefit of the First Priority Lien Obligations or the Second Priority Lien Obligations, (4) to the extent applicable law requires that any Subsidiary of Intermediate Holdings, the Company or any Subsidiary Grantor issues directors’ qualifying shares, such shares or nominee or other similar shares, (5) any Securitization Assets, (6) any Equity Interests in any insurance Subsidiary, (7) any Letter-of-Credit Rights to the extent Intermediate Holdings, the Company or any Subsidiary Grantor is required by applicable law to apply the proceeds of a drawing of such Letter of Credit for a specified purpose, (8) Intermediate Holdings, the Company or any Subsidiary Grantor’s right, title or interest in any license, contract or agreement to which Intermediate Holdings, the Company or such Subsidiary Grantor is a party or any of its right, title or interest thereunder to the extent, but only to the extent, that such a grant would, under the terms of such license, contract or agreement, result in a breach of the terms of, or constitute a default under, or result in the abandonment, invalidation or unenforceability of, any license, contract or agreement to which Intermediate Holdings, the Company or a Subsidiary Grantor is a party (other than to the extent that any such term would be rendered ineffective pursuant to certain provisions of the New York UCC or any other applicable law (including, without limitation, Title 11 of the United States Code) or principles of equity); provided, that immediately upon the ineffectiveness, lapse or termination of any such provision, the Collateral shall include, and Intermediate Holdings, the Company or such Subsidiary Grantor, as applicable, shall be deemed to

 

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have granted a security interest in, all such rights and interests as if such provision had never been in effect, (9) any Equity Interests acquired after the Issue Date (other than Equity Interests in the Company or, in the case of any person which is a Subsidiary, Equity Interests in such person issued or acquired after such person became a Subsidiary) in accordance with the terms of the Indenture if, and to the extent that, and for so long as (A) doing so would violate applicable law or a contractual obligation binding on such Equity Interests and (B) with respect to contractual obligations, such obligation existed at the time of the acquisition thereof and was not created or made binding on such Equity Interests in contemplation of or in connection with the acquisition of such Subsidiary, (10) any equipment owned by Intermediate Holdings, the Company or any Subsidiary Grantor that is subject to a purchase money lien or a Capitalized Lease Obligation if the contract or other agreement in which such Lien is granted (or the documentation providing for such Capitalized Lease Obligation) prohibits or requires the consent of any person other than Intermediate Holdings, the Company or any Subsidiary Grantor as a condition to the creation of any other security interest on such equipment, (11) any real property that is not Material Real Property and all leasehold interests in real property, (12) any assets acquired after the Issue Date, to the extent that, and for so long as, the grant of a security interest in such assets would violate an enforceable contractual obligation binding on such assets that existed at the time of the acquisition thereof and was not created or made binding on such assets in contemplation or in connection with the acquisition of such assets, and (13) any cash granted or otherwise pledged to secure reimbursement and other obligations with respect to letters of credit and similar instruments constituting First Priority Lien Obligations, which cash does not secure any of the other First Priority Lien Obligations, any Pari Passu Secured Indebtedness or any Junior Lien Collateral Indebtedness.

Federal Securities Laws ” has the meaning assigned to such term in Section 4.03.

First Priority Documents ” means the “First Lien Senior Priority Documents” as defined in the New Intercreditor Agreement.

General Intangibles ” means all “General Intangibles” as defined in the New York UCC, including all choses in action and causes of action and all other intangible personal property of any Grantor of every kind and nature (other than Accounts) now owned or hereafter acquired by any Grantor, including corporate or other business records, indemnification claims, contract rights (including rights under IP Agreements, leases, whether entered into as lessor or lessee, Swap Agreements and other agreements), Intellectual Property, goodwill, registrations, franchises, tax refund claims and any guarantee, claim, security interest or other security held by or granted to any Grantor to secure payment by an Account Debtor of any of the Accounts.

Grantor ” has the meaning assigned to such term in the introductory paragraph of this Agreement.

Guarantor Obligations ” means with respect to any Guarantor, all obligations and liabilities of such Guarantor which may arise under or in connection with this

 

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Agreement or any other Note Document (including, without limitation, its obligations and liabilities under Article 10 or Article 11 of the Indenture), in each case whether on account of guarantee obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Collateral Agent or the Trustee or to the Holders of the Notes that are required to be paid by such Guarantor pursuant to the terms of this Agreement or any other Note Document).

Guarantors ” means the collective reference to each Grantor other than the Company.

Holder ” means any Person which holds one or more Notes from time to time.

Intellectual Property ” means all intellectual property of every kind and nature now owned or hereafter acquired by any Grantor, including, inventions, designs, Patents, Copyrights, Trademarks, Patent Licenses, Copyright Licenses, Trademark Licenses, trade secrets, domain names, confidential or proprietary technical and business information, know-how, show-how or other data or information and all related documentation.

Intellectual Property Security Agreement ” means a security agreement in the form hereof or a short form hereof, in each case, which form shall be reasonably acceptable to the Collateral Agent.

IP Agreements ” means all Copyright Licenses, Patent Licenses, Trademark Licenses, and all other agreements, permits, consents, orders and franchises relating to the license, development, use or disclosure of any Intellectual Property to which a Grantor, now or hereafter, is a party or a beneficiary, including, without limitation, the agreements set forth on Schedule II hereto.

Material Adverse Effect ” means a material adverse effect on the business, property, operations or condition of the Company and its Subsidiaries, taken as a whole, or the validity or enforceability of any of the material Note Documents or the rights and remedies of the Collateral Agent, the Trustee and the Holders thereunder.

New York UCC ” means the Uniform Commercial Code as from time to time in effect in the State of New York.

Note Documents ” means the Indenture, the Notes and the Collateral Documents.

Patent License ” means any written agreement, now or hereafter in effect, granting to any Grantor any right to make, use or sell any invention covered by a Patent, now or hereafter owned by any third party and all rights of any Grantor under any such agreement (including, without limitation, any such rights that such Grantor has the right to license).

Patents ” means all of the following now owned or hereafter acquired by any Grantor: (a) all letters patent of the United States or the equivalent thereof in any other country or jurisdiction, including those listed on Schedule II , and all applications for letters patent of the United States or the equivalent thereof in any other country or

 

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jurisdiction, including those listed on Schedule II , (b) all provisionals, reissues, extensions, continuations, divisions, continuations-in-part, reexaminations or revisions thereof, and the inventions disclosed or claimed therein, including the right to make, use, import and/or sell the inventions disclosed or claimed therein, (c) all claims for, and rights to sue for, past or future infringements of any of the foregoing and (d) all income, royalties, damages and payments now or hereafter due and payable with respect to any of the foregoing, including damages and payments for past or future infringement thereof.

Perfection Certificate ” means the Perfection Certificate delivered by the Company to the Collateral Agent, on or prior to the Issue Date.

Permitted Liens ” means any Lien permitted by Section 4.12 of the Indenture.

Pledged Collateral ” has the meaning assigned to such term in Section 3.01.

Pledged Debt ” has the meaning assigned to such term in Section 3.01.

Pledged Debt Securities ” has the meaning assigned to such term in Section 3.01.

Pledged Securities ” means any promissory notes, stock certificates or other certificated securities now or hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral.

Pledged Stock ” has the meaning assigned to such term in Section 3.01.

Secured Obligations ” means (a) in the case of the Company, the Company Obligations and (b) in the case of each Guarantor, its Guarantor Obligations.

Secured Parties ” means (a) the Holders of the Notes, (b) the Collateral Agent and the Trustee, (c) the beneficiaries of each indemnification obligation undertaken by any Grantor under any Note Document and (d) the successors and permitted assigns of each of the foregoing.

Securitization Assets ” means rights to receive payments and funds under relocation contracts and related contracts, homes held for resale, receivables relating to mortgage payments, equity payments and mortgage payoffs, other related receivables, beneficial interests in such assets and assets relating thereto and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving receivables and similar assets, made subject to a Permitted Securitization Financing, in each case related to the relocation services business.

Security Interest ” has the meaning assigned to such term in Section 4.01(a).

Subsidiary Grantor ” means (a) each Domestic Subsidiary of the Company party hereto on the Issue Date and (b) each additional Subsidiary that becomes a Grantor pursuant to Section 4.15 of the Indenture.

 

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Supplement ” has the meaning assigned to such term in Section 7.16.

Trademark License ” means any written agreement, now or hereafter in effect, granting to any Grantor any right to use any Trademark now or hereafter owned by any third party and all rights of any Grantor under any such agreement (including, without limitation, any such rights that such Grantor has the right to license).

Trademarks ” means all of the following now owned or hereafter acquired by any Grantor: (a) all trademarks, service marks, corporate names, company names, business names, fictitious business names, domain names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations thereof (if any), and all registration and recording applications filed in connection therewith, including registrations and registration applications in the United States Patent and Trademark Office or any similar offices in any State of the United States or any other country or any political subdivision thereof (except for “intent-to-use” applications for trademark or service mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of Lanham Act has been filed, such exception to exist solely to the extent and for the duration, if any, that the pledge under Section 3.01 of an “intent-to-use” application prior to such filing would violate the Lanham Act), and all renewals thereof, including those listed on Schedule II , (b) all goodwill associated therewith or symbolized thereby, (c) all claims for, and rights to sue for, past or future infringements of any of the foregoing and (d) all income, royalties, damages and payments now or hereafter due and payable with respect to any of the foregoing, including damages and payments for past or future infringement thereof.

Wholly-Owned Foreign Subsidiary ” of any person shall mean a Foreign Subsidiary of such person that is a Wholly Owned Subsidiary.

ARTICLE II

[RESERVED]

ARTICLE III

Pledge of Securities

SECTION 3.01. Pledge . Subject to the last paragraph of Section 4.01(a), as security for the payment or performance, as the case may be, in full of its Secured Obligations, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and permitted assigns, for the ratable benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and permitted assigns, for the ratable benefit of the Secured Parties, a security interest in all of such Grantor’s right, title and interest in, to and under (i) the Equity Interests directly owned by it (including those listed on Schedule I ) and any other Equity Interests

 

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obtained in the future by such Grantor and any certificates representing all such Equity Interests (the “ Pledged Stock ”); provided that the Pledged Stock shall not include any Excluded Property; (ii) (A) the debt obligations listed opposite the name of such Grantor on Schedule I , (B) any debt obligations in the future issued to such Grantor having, in the case of each instance of debt securities, an aggregate principal amount in excess of $5.0 million, and (C) the certificates, promissory notes and any other instruments, if any, evidencing such debt obligations (the “ Pledged Debt Securities ” and, together with the property described in clauses (ii)(A) and (B) above, the “ Pledged Debt ”); (iii) subject to Section 3.05 hereof, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other proceeds received in respect of the Pledged Stock and the Pledged Debt; (iv) subject to Section 3.05 hereof, all rights and privileges of such Grantor with respect to the Pledged Stock, Pledged Debt and other property referred to in clause (iii) above; and (v) all proceeds of any of the foregoing (the Pledged Stock, Pledged Debt and other property referred to in clauses (iii) through (v) above being collectively referred to as the “ Pledged Collateral ”). The Collateral Agent agrees to execute an amendment to this Section 3.01 (if necessary) to exclude from the Pledged Stock any Equity Interest which is Excluded Property.

TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its successors and permitted assigns, for the benefit of the Secured Parties, forever; subject , however , to the terms, covenants and conditions hereinafter set forth.

SECTION 3.02. Delivery of the Pledged Collateral . (a) Each Grantor agrees promptly to deliver or cause to be delivered to the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent), for the benefit of the Secured Parties, any and all Pledged Securities to the extent such Pledged Securities (i) are Equity Interests in the Company or in Subsidiaries or (ii) in the case of promissory notes or other instruments evidencing Indebtedness, are required to be delivered pursuant to paragraph (b) of this Section 3.02. If any Pledged Stock that is uncertificated on the date hereof shall hereinafter become certificated, or if any Grantor shall at any time hold or acquire any certificated securities included in the Pledged Collateral, the applicable Grantor shall promptly cause the certificate or certificates representing such Pledged Stock to be delivered to the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent), for the benefit of the Secured Parties together with accompanying stock powers or other documentation required by Section 3.02(c). None of the Grantors shall permit any third party to “control” (for purposes of Section 8-106 of the New York UCC (or any analogous provision of the Uniform Commercial Code in effect in the jurisdiction whose law applies)) any uncertificated securities that constitute Pledged Collateral other than the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent).

(b) To the extent any Indebtedness for borrowed money constitutes Pledged Collateral (other than (i) intercompany current liabilities in connection with the cash management operations of Holdings and its Subsidiaries or (ii) to the extent that a pledge of such promissory note or instrument would violate applicable law) owed to any Grantor is evidenced

 

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by a promissory note or an instrument, such Grantor shall cause such promissory note, if evidencing Indebtedness in excess of $5.0 million, to be pledged and delivered to the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent), for the benefit of the Secured Parties, pursuant to the terms hereof.

(c) Upon delivery to the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent), (i) any Pledged Securities required to be delivered pursuant to the foregoing paragraphs (a) and (b) of this Section 3.02 shall be accompanied by stock powers or note powers, as applicable, duly executed in blank or other instruments of transfer reasonably satisfactory to the First Priority Agent or the Collateral Agent, as applicable, and by such other instruments and documents as the First Priority Agent or the Collateral Agent, as applicable, may reasonably request and (ii) all other property comprising part of the Pledged Collateral delivered pursuant to the terms of this Agreement shall be accompanied to the extent necessary to perfect the security interest in or allow realization on the Pledged Collateral by proper instruments of assignment duly executed by the applicable Grantor and such other instruments or documents as the Collateral Agent may reasonably request. Each delivery of Pledged Securities shall be accompanied by a schedule describing the securities, which schedule shall be attached hereto as Schedule I (or a supplement to Schedule I , as applicable) and made a part hereof; provided that failure to attach any such schedule hereto shall not affect the validity of such pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.

SECTION 3.03. Representations, Warranties and Covenants . The Grantors jointly and severally represent, warrant and covenant to and with the Collateral Agent, for the benefit of the Secured Parties, that as of the Issue Date:

(a) Schedule I correctly sets forth the percentage of the issued and outstanding units of each class of the Equity Interests of the issuer thereof represented by the Pledged Stock and includes all Equity Interests, debt securities and promissory notes or instruments evidencing Indebtedness required to be (i) pledged pursuant to this Agreement and the Indenture, or (ii) delivered pursuant to Section 3.02;

(b) the Pledged Stock and Pledged Debt Securities (solely with respect to Pledged Debt Securities issued by a person that is not a subsidiary of Holdings or an Affiliate of any such subsidiary, to the best of each Grantor’s knowledge) have been duly and validly authorized and issued by the issuers thereof and (i) in the case of Pledged Stock, are fully paid and nonassessable and (ii) in the case of Pledged Debt Securities (solely with respect to Pledged Debt Securities issued by a person that is not a subsidiary of Holdings or an Affiliate of any such subsidiary, to the best of each Grantor’s knowledge) are legal, valid and binding obligations of the issuers thereof, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding at law or in equity) and an implied covenant of good faith and fair dealing;

 

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(c) except for the security interests granted hereunder, each Grantor (i) is and, subject to any transfers made in compliance with the Indenture, will continue to be the direct owner, beneficially and of record, of the Pledged Securities indicated on Schedule I as owned by such Grantor, (ii) holds the same free and clear of all Liens, other than Permitted Liens, (iii) will make no assignment, pledge, hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Pledged Collateral, other than pursuant to a transaction permitted by the Indenture and other than Permitted Liens and (iv) subject to the rights of such Grantor under the Note Documents to dispose of Pledged Collateral, will use commercially reasonable efforts to defend its title or interest hereto or therein against any and all Liens (other than Permitted Liens), however arising, of all persons;

(d) other than as set forth in the Indenture or the schedules thereto, and except for restrictions and limitations imposed by the Note Documents or securities laws generally, or otherwise permitted to exist pursuant to the terms of the Indenture, the Pledged Stock (other than partnership interests) is and will continue to be freely transferable and assignable, and none of the Pledged Stock is or will be subject to any option, right of first refusal, shareholders agreement, charter or by-law provisions or contractual restriction of any nature that might prohibit, impair, delay or otherwise affect the pledge of such Pledged Stock hereunder, the sale or disposition thereof pursuant hereto or the exercise by the Collateral Agent of rights and remedies hereunder;

(e) each Grantor has the power and authority to pledge the Pledged Collateral pledged by it hereunder in the manner hereby done or contemplated;

(f) other than as set forth in the Indenture or the schedules thereto, no consent or approval of any Governmental Authority, any securities exchange or any other person was or is necessary to the validity of the pledge effected hereby (or the transfer of the Pledged Securities upon a foreclosure thereof (other than compliance with any securities law applicable to the transfer of securities)), in each case other than such as have been obtained and are in full force and effect;

(g) by virtue of the execution and delivery by the Grantors of this Agreement, when any Pledged Securities (including Pledged Stock of any Domestic Subsidiary or any Qualified CFC Holding Company) are delivered to the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent), for the benefit of the Secured Parties, in accordance with this Agreement and a financing statement covering such Pledged Securities is filed in the appropriate filing office, the Collateral Agent will obtain, for the benefit of the Secured Parties, a legal, valid and perfected lien upon and security interest in such Pledged Securities under the New York UCC, subject only to Permitted Liens permitted under the Indenture, as security for the payment and performance of the Secured Obligations; and

(h) each Grantor that is an issuer of the Pledged Collateral confirms that it has received notice of the security interest granted hereunder and consents to such security interest and, upon the occurrence and during the continuation of an Event of Default and

 

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at any time following the First Priority Lien Obligations Payment Date, agrees to transfer record ownership of the securities issued by it in connection with any request by the Collateral Agent.

SECTION 3.04. Registration in Nominee Name; Denominations . The First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent), on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in the name of the applicable Grantor, endorsed or assigned in blank or in favor of the First Priority Agent or the Collateral Agent, as applicable, or, if an Event of Default shall have occurred and be continuing, in its own name as pledgee or the name of its nominee (as pledgee or as sub-agent). Each Grantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Securities registered in the name of such Grantor. If an Event of Default shall have occurred and be continuing, the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent) shall have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement. Each Grantor shall use its commercially reasonable efforts to cause any Grantor that is not a party to this Agreement to comply with a request by the First Priority Agent or the Collateral Agent, as applicable, pursuant to this Section 3.04, to exchange certificates representing Pledged Securities of such Grantor for certificates of smaller or larger denominations.

SECTION 3.05. Voting Rights; Dividends and Interest, Etc . Unless and until an Event of Default shall have occurred and be continuing and the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent) shall have given notice to the relevant Grantors of the First Priority Agent’s or the Collateral Agent’s intention, as applicable, to exercise its rights hereunder or under the First Priority Documents:

(i) Each Grantor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Collateral or any part thereof for any purpose consistent with the terms of this Agreement, the Indenture and the other Note Documents; provided that, except as permitted under the Indenture, such rights and powers shall not be exercised in any manner that could materially and adversely affect the rights inuring to a holder of any Pledged Collateral, the rights and remedies of any of the Collateral Agent or the other Secured Parties under this Agreement, the Indenture or any other Note Document or the ability of the Secured Parties to exercise the same.

(ii) The Collateral Agent shall, at such Grantor’s sole expense and upon receipt of a written request, promptly execute and deliver to each Grantor, or cause to be executed and delivered to such Grantor, all such proxies, powers of attorney and other instruments as such Grantor may reasonably request for the purpose of enabling such Grantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to subparagraph (i) above.

 

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(iii) Each Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Collateral to the extent and only to the extent that such dividends, interest, principal and other distributions are permitted by, and otherwise paid or distributed in accordance with, the terms and conditions of the Indenture, the other Note Documents and applicable laws; provided , that (A) any noncash dividends, interest, principal or other distributions, payments or other consideration in respect thereof, including any rights to receive the same to the extent not so distributed or paid, that would constitute Pledged Securities to the extent such Grantor has the rights to receive such Pledged Securities if they were declared, distributed and paid on the date of this Agreement, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any Pledged Securities, received in exchange for Pledged Securities or any part thereof, or in redemption thereof, as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise or (B) any non-cash dividends and other distributions paid or payable in respect of any Pledged Securities that would constitute Pledged Securities to the extent such Grantor has the rights to receive such Pledged Securities if they were declared, distributed and paid on the date of this Agreement, in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid in surplus, shall be and become part of the Pledged Collateral, and, if received by any Grantor, shall not be commingled by such Grantor with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the benefit of the Collateral Agent, for the benefit of the Secured Parties, and shall be forthwith delivered to the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent), for the benefit of the Secured Parties, in the same form as so received (endorsed in a manner reasonably satisfactory to the First Priority Agent or the Collateral Agent, as applicable). This clause (iii) shall not apply to dividends between or among the Company, the Grantors and the Subsidiaries only of property which is subject to a perfected security interest under this Agreement; provided that the Company notifies the Collateral Agent in writing, specifically referring to this Section 3.06, at the time of such dividend and takes any actions the Collateral Agent specifies to ensure the continuance of its perfected security interest in such property under this Agreement.

(b)Upon the occurrence and during the continuance of an Event of Default and after notice by the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent) to the Company of the intention of the First Priority Agent or the Collateral Agent, as applicable, to exercise its rights hereunder or under the First Priority Documents, as applicable, all rights of any Grantor to receive dividends, interest, principal or other distributions with respect to Pledged Securities that such Grantor is authorized to receive pursuant to paragraph (a)(iii) of this Section 3.05 shall cease, and all such rights shall thereupon become vested, for the benefit of the Secured Parties, in the First Priority Agent or the Collateral Agent, as applicable, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions; provided , however , that prior to the occurrence of an Acceleration Event, any Grantor may continue to exercise dividend and distribution rights solely to the extent permitted under clause (12) and clause (13) (other than clause (b) thereof) of Section 4.07(b) of the

 

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Indenture and solely to the extent that such amounts are required by Holdings for the stated purposes thereof. All dividends, interest, principal or other distributions received by any Grantor contrary to the provisions of this Section 3.05 shall not be commingled by such Grantor with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the benefit of the Collateral Agent, for the benefit of the Secured Parties, and shall be forthwith delivered to the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent), for the benefit of the Secured Parties, in the same form as so received (endorsed in a manner reasonably satisfactory to the First Priority Agent or the Collateral Agent, as applicable). Any and all money and other property paid over to or received by the First Priority Agent or the Collateral Agent, as applicable, pursuant to the provisions of this paragraph (b) shall be retained by the First Priority Agent or the Collateral Agent, as applicable, in an account to be established by the First Priority Agent or the Collateral Agent, as applicable, upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 5.02 hereof. After all Events of Default have been cured or waived and a Responsible Officer has delivered to the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent) a certificate to that effect, the First Priority Agent or the Collateral Agent, as applicable, shall promptly repay to each Grantor (without interest) all dividends, interest, principal or other distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section 3.05 and that remain in such account.

(c) Upon the occurrence and during the continuance of an Event of Default and after notice by the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent) to the Company of the intention of the First Priority Agent or the Collateral Agent, as applicable, to exercise its rights hereunder or under the First Priority Documents, all rights of any Grantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 3.05 with respect to Pledged Securities, and the obligations of the First Priority Agent or the Collateral Agent, as applicable, under paragraph (a)(ii) of this Section 3.05, shall cease, and all such rights shall thereupon become vested in the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent), for the benefit of the Secured Parties, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers; provided that the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Grantors to exercise such rights. After all Events of Default have been cured or waived and a Responsible Officer has delivered to the Collateral Agent a certificate to that effect, each Grantor shall have the right to exercise the voting and/or consensual rights and powers that such Grantor would otherwise be entitled to exercise pursuant to the terms of paragraph (a)(i) above and the obligations of the Collateral Agent under paragraph (a)(ii) shall be in effect.

 

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ARTICLE IV

Security Interests in Other Personal Property

SECTION 4.01. Security Interest . (a) As security for the payment or performance when due (whether at the stated maturity, by acceleration or otherwise), as the case may be, in full of its Secured Obligations, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and permitted assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and permitted assigns, for the benefit of the Secured Parties, a security interest (the “ Security Interest ”) in all right, title and interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “ Article 9 Collateral ”):

(i) all Accounts;

(ii) all Chattel Paper;

(iii) all Deposit Accounts;

(iv) all Documents;

(v) all Equipment;

(vi) all General Intangibles;

(vii) all Instruments;

(viii) all Inventory and all other Goods not otherwise described above;

(ix) all Investment Property;

(x) all Commercial Tort Claims with respect to the matters described on Schedule III ;

(xi) all other personal property not otherwise described above (except for property specifically excluded from any defined term used in any of the foregoing clauses);

(xii) all books and records pertaining to the Article 9 Collateral; and

(xiii) to the extent not otherwise included, all proceeds, Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees given by any person with respect to any of the foregoing;

provided , however , that this Agreement shall not constitute a grant of a security interest in, and the term Article 9 Collateral shall not include, any Excluded Property. The Collateral Agent agrees to execute an amendment to this Section 4.01(a) (if necessary) to exclude from the Article

 

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9 Collateral any Excluded Property. Notwithstanding anything to the contrary in this Agreement or in the Indenture, no property shall be excluded from the definition of Pledged Collateral or Article 9 Collateral if such property constitutes Collateral (as defined in the Credit Agreement) for obligations of a Grantor under the Credit Agreement and/or any Loan Document (as defined in the Credit Agreement).

(b) Each Grantor hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file or cause to be filed in any relevant jurisdiction any initial financing statements (including fixture filings) with respect to the Article 9 Collateral or any part thereof and amendments thereto that contain the information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement or amendment, including (i) whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor, (ii) in the case of a financing statement filed as a fixture filing, a sufficient description of the real property to which such Article 9 Collateral relates and (iii) a description of collateral that describes such property in any other manner as the Collateral Agent may reasonably determine is necessary or advisable to ensure the perfection of the security interest in the Article 9 Collateral granted under this Agreement, including describing such property as “all assets” or “all property”. Each Grantor agrees to provide such information to the Collateral Agent promptly upon request.

The Collateral Agent is further authorized to file or cause to be filed with the United States Patent and Trademark Office or United States Copyright Office such documents as may be reasonably necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by each Grantor, without the signature of such Grantor, and naming such Grantor or the Grantors as debtors and the Collateral Agent as secured party.

For the avoidance of doubt, the Collateral Agent shall not be responsible for the perfection of any Security Interest or for the filing, form, content or renewal of any UCC financing statement, fixture filings, Mortgages, deeds of trust and such other documents or instruments.

(c) The Security Interest is granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Article 9 Collateral.

(d) Notwithstanding anything to the contrary in this Agreement or in the Indenture, no Grantor shall be required to enter into any deposit account control agreement or securities account control agreement with respect to any cash, deposit account or securities account.

SECTION 4.02. Representations and Warranties. The Grantors jointly and severally represent and warrant to the Collateral Agent and the Secured Parties that, as of the Issue Date:

(a) Each Grantor has good and valid rights in and title to the Article 9 Collateral with respect to which it has purported to grant a Security Interest hereunder and has full

 

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power and authority to grant to the Collateral Agent the Security Interest in such Article 9 Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other person other than any consent or approval that has been obtained and is in full force and effect or has otherwise been disclosed herein or in the Indenture.

(b) The Perfection Certificate has been duly prepared, completed and executed and the information set forth therein, including the exact legal name of each Grantor, is correct and complete, in all material respects, as of the Issue Date. The Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations containing a description of the Article 9 Collateral that have been prepared based upon the information provided to the Collateral Agent in the Perfection Certificate for filing in each governmental, municipal or other office specified in Schedule IV constitute all the filings, recordings and registrations (other than filings required to be made in the United States Patent and Trademark Office and the United States Copyright Office in order to perfect the Security Interest in Article 9 Collateral consisting of United States issued patents and patent applications, United States registered Trademarks and United States registered Copyrights) that are necessary to publish notice of and protect the validity of and to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Article 9 Collateral in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof), and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction, except as provided under applicable law with respect to the filing of continuation statements or amendments. Each Grantor represents and warrants that a fully executed Intellectual Property Security Agreement containing a description of all Article 9 Collateral including all material Intellectual Property with respect to United States issued patents (and Patents for which United States applications are pending), United States registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered Copyrights has been delivered to the Collateral Agent for recording with the United States Patent and Trademark Office and the United States Copyright Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as applicable, and reasonably requested by the Collateral Agent, to protect the validity of and to establish a legal, valid and perfected security interest in favor of the Collateral Agent, for the benefit of the Secured Parties, in respect of all Article 9 Collateral consisting of such material Intellectual Property in which a security interest may be perfected by recording with the United States Patent and Trademark Office and the United States Copyright Office, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary (other than such actions as are necessary to perfect the Security Interest with respect to any Article 9 Collateral consisting of registrations or applications for Patents, Trademarks and Copyrights acquired or obtained after the date hereof).

(c) The Security Interest constitutes (i) a legal and valid security interest in all the Article 9 Collateral securing the payment and performance of the Secured Obligations, (ii) subject to the filings described in Section 4.02(b), a perfected security

 

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interest in all Article 9 Collateral in which a security interest may be perfected by filing, recording or registering a financing statement or analogous document in the United States (or any political subdivision thereof) pursuant to the Uniform Commercial Code or other applicable law in such jurisdictions and (iii) subject to the filings described in Section 4.02(b), a security interest that shall be perfected in all Article 9 Collateral in which a security interest may be perfected upon the receipt and recording of the Intellectual Property Security Agreement with the United States Patent and Trademark Office and the United States Copyright Office upon the making of such filings with such office, in each case, as applicable, with respect to material Intellectual Property Collateral. The Security Interest is and shall be prior to any other Lien on any of the Article 9 Collateral other than Permitted Liens.

(d) The Article 9 Collateral is owned by the Grantors free and clear of any Lien, other than Permitted Liens. None of the Grantors has filed or consented to the filing of (i) any financing statement or analogous document under the Uniform Commercial Code or any other applicable laws covering any Article 9 Collateral, (ii) any agreement in which any Grantor grants any interest in any Article 9 Collateral or any security agreement or similar instrument covering any Article 9 Collateral with the United States Patent and Trademark Office or the United States Copyright Office or (iii) any agreement in which any Grantor grants any interest in any Article 9 Collateral or any security agreement or similar instrument covering any Article 9 Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Permitted Liens.

(e) None of the Grantors holds any Commercial Tort Claim individually in excess of $5.0 million as of the Issue Date except as indicated on the Perfection Certificate.

(f) As to itself and its Article 9 Collateral consisting of Intellectual Property (the “ Intellectual Property Collateral ”):

(i) The Intellectual Property Collateral set forth on Schedule II includes all of the material registrations and material applications for Patents, Trademarks and Copyrights owned or exclusively licensed by and all material IP Agreements (other than Trademark licenses granted by a Grantor to a franchisee or master franchisor in the ordinary course of business) binding upon such Grantor as of the date hereof. The Intellectual Property Collateral set forth on Schedule II includes all of the material registrations and material applications for Patents, Trademarks and Copyrights owned or exclusively licensed by the Company and its subsidiaries.

(ii) The Intellectual Property Collateral is subsisting and has not been adjudged invalid or unenforceable in whole or part, and, to such Grantor’s knowledge, is valid and enforceable, except as would not reasonably be expected to have a Material Adverse Effect. Such Grantor has no knowledge of any uses of any item of Intellectual Property Collateral that would be expected to lead to such item becoming invalid or unenforceable, except as would not reasonably be expected to have a Material Adverse Effect.

 

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(iii) Such Grantor has made or performed all commercially reasonable acts, including without limitation filings, recordings and payment of all required fees and taxes, required to maintain and protect its interest in the Intellectual Property Collateral that is reasonably necessary for the operation of its business in full force and effect in the United States and such Grantor has used proper statutory notice in connection with its use of each Patent, Trademark and Copyright in the Intellectual Property Collateral, except to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect.

(iv) With respect to each IP Agreement, the absence, termination or violation of which would reasonably be expected to have a Material Adverse Effect: (A) such Grantor has not received any notice of termination or cancellation under such IP Agreement; (B) such Grantor has not received any notice of a breach or default under such IP Agreement, which breach or default has not been cured or waived; and (C) neither such Grantor nor any other party to such IP Agreement is in breach or default thereof in any material respect, and no event has occurred that, with notice or lapse of time or both, would constitute such a breach or default or permit termination, modification or acceleration under such IP Agreement.

(v) Except as would not reasonably be expected to have a Material Adverse Effect, no Grantor or Intellectual Property Collateral is subject to any outstanding consent, settlement, decree, order, injunction, judgment or ruling restricting the use of any Intellectual Property Collateral or that would impair the validity or enforceability of such Intellectual Property Collateral.

SECTION 4.03. Covenants . (a) The Company agrees promptly to notify the Collateral Agent in writing of any change (i) in the corporate or organization name of any Grantor, (ii) in the identity or type of organization or corporate structure of any Grantor, (iii) in the Federal Taxpayer Identification Number or organizational identification number of any Grantor or (iv) in the jurisdiction of organization of any Grantor. The Company agrees promptly to provide the Collateral Agent with certified organizational documents reflecting any of the changes described in the immediately preceding sentence. The Company agrees not to effect or permit any change referred to in the first sentence of this paragraph (a) unless all filings have been made, or will have been made within any applicable statutory period, under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected second priority security interest in all the Article 9 Collateral in which a security interest may be perfected by filing, for the benefit of the Secured Parties. The Company agrees promptly to notify the Collateral Agent if any material portion of the Article 9 Collateral owned or held by any Grantor is damaged or destroyed.

(b) Subject to the rights of such Grantor under the Note Documents to dispose of Collateral, each Grantor shall, at its own expense, use commercially reasonable efforts to defend title to the Article 9 Collateral against all persons and to defend the Security Interest of the Collateral Agent, for the benefit of the Secured Parties, in the Article 9 Collateral and the priority thereof against any Lien that is not a Permitted Lien.

 

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(c) Each Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Collateral Agent may from time to time reasonably request to better assure, preserve, protect, defend and perfect the Security Interest and the rights and remedies created hereby, including, without limitation, (i) the payment of any fees and taxes required in connection with the execution and delivery of this Agreement and the granting of the Security Interest, and (ii) the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith, all in accordance with the terms hereof and of Article 14 of the Indenture. If any Indebtedness payable under or in connection with any of the Article 9 Collateral that is in excess of $5.0 million shall be or become evidenced by any promissory note or other instrument, such note or instrument shall be promptly pledged and delivered to the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent), for the benefit of the Secured Parties, duly endorsed in a manner reasonably satisfactory to the First Priority Agent or the Collateral Agent, as applicable. The Collateral Agent agrees to execute an amendment to this Section 4.03(c) (if necessary) to exclude from the requirements of this clause any asset which is Excluded Property.

Without limiting the generality of the foregoing, each Grantor hereby authorizes the Collateral Agent, with prompt notice thereof to the Grantors, to supplement this Agreement by supplementing Schedule II or adding additional schedules hereto to specifically identify any asset or item that may constitute material Copyrights, Patents, Trademarks, Copyright Licenses, Patent Licenses or Trademark Licenses; provided that any Grantor shall have the right, exercisable within 30 days after the Company has been notified by the Collateral Agent of the specific identification of such Article 9 Collateral, to advise the Collateral Agent in writing of any inaccuracy of the representations and warranties made by such Grantor hereunder with respect to such Article 9 Collateral. Each Grantor agrees that it will use its commercially reasonable efforts to take such action as shall be necessary in order that all representations and warranties hereunder shall be true and correct with respect to such Article 9 Collateral within 30 days after the date it has been notified by the Collateral Agent of the specific identification of such Article 9 Collateral.

(d) After the occurrence of an Event of Default and during the continuance thereof, the Collateral Agent shall have the right to verify under reasonable procedures the validity, amount, quality, quantity, value, condition and status of, or any other matter relating to, the Article 9 Collateral, including, in the case of Accounts or Article 9 Collateral in the possession of any third person, by contacting Account Debtors or the third person possessing such Article 9 Collateral for the purpose of making such a verification. The Collateral Agent shall have the right to share any information it gains from such inspection or verification with any Secured Party.

(e) At its option, the Collateral Agent may discharge past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9 Collateral and not a Permitted Lien, and may pay for the maintenance and preservation of the Article 9 Collateral to the extent any Grantor fails to do so as required by the Indenture or this Agreement, and each Grantor jointly and severally agrees to reimburse the Collateral Agent on demand for any reasonable payment made or any reasonable expense incurred by the Collateral Agent pursuant to the foregoing authorization; provided , however , that nothing in this

 

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Section 4.03(e) shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect to taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Note Documents.

(f) Each Grantor (rather than the Collateral Agent or any Secured Party) shall remain liable for the observance and performance of all the conditions and obligations to be observed and performed by it under each contract, agreement or instrument relating to the Article 9 Collateral and each Grantor jointly and severally agrees to indemnify and hold harmless the Collateral Agent and the Secured Parties from and against any and all liability for such performance.

(g) None of the Grantors shall make or permit to be made an assignment, pledge or hypothecation of the Article 9 Collateral or shall grant any other Lien in respect of the Article 9 Collateral, except as permitted by the Indenture. None of the Grantors shall make or permit to be made any transfer of the Article 9 Collateral and each Grantor shall remain at all times in possession or otherwise in control of the Article 9 Collateral owned by it, except as permitted by the Indenture.

(h) Subject to the Intercreditor Agreements, each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Article 9 Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto. In the event that any Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium in whole or part relating thereto, the Collateral Agent may (but shall in no event be required to), without waiving or releasing any obligation or liability of the Grantors hereunder or any Event of Default, in its sole discretion, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Collateral Agent reasonably deems advisable. All sums disbursed by the Collateral Agent in connection with this Section 4.03(h), including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Grantors to the Collateral Agent and shall be additional Secured Obligations secured hereby.

SECTION 4.04. Other Actions . In order to further ensure the attachment, perfection and priority of, and the ability of the Collateral Agent to enforce, for the benefit of the Secured Parties, the Collateral Agent’s security interest in the Article 9 Collateral, each Grantor agrees, in each case at such Grantor’s own expense, to take the following actions with respect to the following Article 9 Collateral:

(a) Instruments and Tangible Chattel Paper . If any Grantor shall at any time hold or acquire any Instruments (other than checks received and processed in the ordinary course of business) or tangible Chattel Paper evidencing an amount in excess of $5.0 million, such Grantor shall forthwith endorse, assign and deliver the same to the First

 

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Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent) for the benefit of the Secured Parties, accompanied by such instruments of transfer or assignment duly executed in blank as the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent) may from time to time reasonably request.

(b) Commercial Tort Claims . If any Grantor shall at any time hold or acquire a Commercial Tort Claim in an amount reasonably estimated to exceed $5.0 million, such Grantor shall promptly notify the Collateral Agent thereof in a writing signed by such Grantor, including a summary description of such claim, and grant to the Collateral Agent in writing a security interest therein and in the proceeds thereof, all under the terms and provisions of this Agreement, with such writing to be in form and substance reasonably satisfactory to the Collateral Agent.

SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral . (a) Except as permitted under the Indenture, each Grantor agrees that it will not knowingly do any act or omit to do any act (and will exercise commercially reasonable efforts to prevent its licensees or sublicensees from doing any act or omitting to do any act) whereby any Patent that is material to the normal conduct of such Grantor’s business may become prematurely invalidated, abandoned, lapsed or dedicated to the public, and agrees that it shall take commercially reasonable steps with respect to any material products covered by any such Patent as necessary and sufficient to establish and preserve such Grantor’s rights under applicable patent laws.

(b) Each Grantor will, and will use its commercially reasonable efforts to cause its licensees or its sublicensees to, for each Trademark material to the normal conduct of such Grantor’s business, (i) maintain such Trademark in full force free from any adjudication of abandonment or invalidity for non-use, (ii) maintain the quality of products and services offered under such Trademark, (iii) consistent with its prior practice, display such Trademark with notice of federal or foreign registration or claim of trademark or service mark as permitted under applicable law and (iv) not knowingly use or knowingly permit its licensees’ or sublicensees’ use of such Trademark in violation of any third-party rights.

(c) Each Grantor will, and will use its commercially reasonable efforts to cause its licensees or its sublicensees to, for each work covered by a Copyright material to the normal conduct of such Grantor’s business that it publishes, displays and distributes, and, consistent with its prior practice, use copyright notice as permitted under applicable copyright laws.

(d) Each Grantor shall notify the Collateral Agent promptly if it knows that any Patent, Trademark or Copyright material to the normal conduct of such Grantor’s business has permanently become abandoned, lapsed or dedicated to the public, or of any materially adverse determination, excluding non-material office actions and similar determinations or developments in the United States Patent and Trademark Office, United States Copyright Office, any court or any similar office of any country, regarding such Grantor’s ownership of any such Patent, Trademark or Copyright or its right to register or to maintain the same.

 

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(e) Each Grantor, either itself or through any agent, employee, licensee or designee, shall (i) inform the Collateral Agent on a quarterly basis of each registration or application made by itself, or through any agent, employee, licensee or designee at such Grantor’s request, for any Patent or Trademark with the United States Patent and Trademark Office or, on a monthly basis, of each registration made by itself, or through any agent, employee, licensee or designee at such Grantor’s request, for any Copyright with the United States Copyright Office, respectively, or any comparable office or agency in any other country filed during the preceding period, (ii) promptly execute and deliver any and all agreements, instruments, documents and papers necessary or as the Collateral Agent may otherwise reasonably request to evidence the Collateral Agent’s security interest in such U.S. Patent, Trademark or Copyright and the perfection thereof, and (iii) upon the Collateral Agent’s request, as directed in writing by the Holders of a majority in aggregate principal amount of the then outstanding Notes, promptly execute and deliver any and all agreements, instruments, documents and papers necessary or as the Collateral Agent may otherwise reasonably request to evidence the Collateral Agent’s security interest in such non-U.S. Patent, Trademark or Copyright and the perfection thereof.

(f) Each Grantor shall exercise its reasonable business judgment consistent with the practice in any proceeding before the United States Patent and Trademark Office, the United States Copyright Office or any comparable office or agency in any other country with respect to maintaining and pursuing each application relating to any Patent, Trademark and/or Copyright (and obtaining the relevant grant or registration) material to the normal conduct of such Grantor’s business and to maintain (i) each issued Patent and (ii) the registrations of each Trademark and each Copyright that is material to the normal conduct of such Grantor’s business, including, when applicable and necessary in such Grantor’s reasonable business judgment, timely filings of applications for renewal, affidavits of use, affidavits of incontestability and payment of maintenance fees, and, if any Grantor believes necessary in its reasonable business judgment, to initiate opposition, interference and cancellation proceedings against third parties.

(g) In the event that any Grantor knows or has reason to know that any Article 9 Collateral consisting of a Patent, Trademark or Copyright material to the normal conduct of its business has been or is about to be materially infringed, misappropriated or diluted by a third party, such Grantor shall promptly notify the Collateral Agent (other than infringements, misappropriations or dilutions by franchisees or former franchisees unless and until such franchisee or former franchisee challenges the validity of any such Patent, Trademark or Copyright) and shall, if such Grantor deems it necessary in its reasonable business judgment, take such actions as are reasonably appropriate under the circumstances, which may include suing and recovering damages.

(h) The Company agrees that it will, and will cause each of its Subsidiaries to, assign any material (i) registrations and applications for Trademarks (together with the goodwill of the business symbolized thereby), (ii) issued Patents and applications therefor, and (iii) registrations and applications for Copyrights to a Grantor, in each case, on or before the Issue Date. The Company shall promptly record such assignments with the United States Patent and Trademark Office, United States Copyright Office, and any other similar office or agency in any other jurisdiction, as applicable, within five days after execution of such assignments and shall

 

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promptly provide the Collateral Agent with copies of such assignments and, if available, confirmation of recordation thereof.

SECTION 4.06. Insurance . (a) Maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by similarly situated companies engaged in the same or similar businesses operating in the same or similar locations and cause the Collateral Agent to be listed as loss payee on property and casualty policies, and as an additional insured on liability policies; provided that (i) workers’ compensation insurance or similar coverage may be effected with respect to its operations in any particular state or other jurisdiction through an insurance fund operated by such state or jurisdiction and (ii) such insurance may contain self-insurance retention and deductible levels consistent with normal industry practice.

(b) With respect to any real property on which there is a mortgage granted for the benefit of the Holders (“Mortgaged Properties”), if at any time the area in which the relevant premises are located is designated a “flood hazard area” in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or any successor agency), obtain flood insurance in such reasonable total amount as the Collateral Agent may from time to time reasonably require, and otherwise comply with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973, as it may be amended from time to time.

(c) In connection with the covenants set forth in this Section 4.06, it is understood and agreed that:

(i) none of the Collateral Agent, the Holders, the other Secured Parties and their respective agents or employees shall be liable for any loss or damage insured by the insurance policies required to be maintained under this Section 4.06, it being understood that (A) the Grantors shall look solely to their insurance companies or any other parties other than the aforesaid parties for the recovery of such loss or damage and (B) such insurance companies shall have no rights of subrogation against the Collateral Agent, the Holders, the other Secured Parties or their agents or employees. If, however, the insurance policies, as a matter of the internal policy of such insurer, do not provide waiver of subrogation rights against such parties, as required above, then the Borrower, on behalf of itself and behalf of each of its Subsidiaries, hereby agrees, to the extent permitted by law, to waive, and further agrees to cause each of their Subsidiaries to waive, its right of recovery, if any, against the Collateral Agent, the Holders, the other Secured Parties and their agents and employees; and

(ii) the designation of any form, type or amount of insurance coverage by the Collateral Agent under this Section 4.06 shall in no event be deemed a representation, warranty or advice by the Collateral Agent, the Holders or the other Secured Parties that such insurance is adequate for the purposes of the business of the Borrower and the Subsidiaries or the protection of their properties.

 

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ARTICLE V

Remedies

SECTION 5.01. Remedies Upon Default . Upon the occurrence and during the continuance of an Event of Default, each Grantor agrees to deliver each item of Collateral to the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent) on demand, and it is agreed that the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent) shall have the right to take any of or all the following actions at the same or different times: (a) with respect to any Article 9 Collateral consisting of Intellectual Property, on demand, to cause the Security Interest to become an assignment, transfer and conveyance of any of or all such Article 9 Collateral by the applicable Grantors to the First Priority Agent or the Collateral Agent, as applicable, or to license or sublicense, whether general, special or otherwise, and whether on an exclusive or a nonexclusive basis, any such Article 9 Collateral throughout the world on such terms and conditions and in such manner as the First Priority Agent or the Collateral Agent, as applicable, shall determine (other than in violation of any then-existing licensing arrangements to the extent that waivers thereunder cannot be obtained with the use of commercially reasonable efforts, which each Grantor hereby agrees to use) and (b) with or without legal process and with or without prior notice or demand for performance, to take possession of the Article 9 Collateral and without liability for trespass to the applicable Grantor to enter any premises where the Article 9 Collateral may be located for the purpose of taking possession of or removing the Article 9 Collateral and, generally, to exercise any and all rights afforded to a secured party with respect to the Secured Obligations under the applicable Uniform Commercial Code or other applicable law or in equity. Without limiting the generality of the foregoing, each Grantor agrees that the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent) shall have the right, subject to the mandatory requirements of applicable law, to sell or otherwise dispose of all or any part of the Collateral securing the Secured Obligations at a public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery as the First Priority Agent or the Collateral Agent, as applicable, shall deem appropriate. The First Priority Agent or the Collateral Agent, as applicable, shall be authorized in connection with any sale of a security (if it deems it advisable to do so) pursuant to the foregoing to restrict the prospective bidders or purchasers to persons who represent and agree that they are purchasing such security for their own account, for investment, and not with a view to the distribution or sale thereof. Upon consummation of any such sale of Collateral pursuant to this Section 5.01 the First Priority Agent or the Collateral Agent, as applicable, shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on the part of any Grantor, and each Grantor hereby waives and releases (to the extent permitted by law) all rights of redemption, stay, valuation and appraisal that such Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.

To the extent any notice is required by applicable law, the First Priority Agent or the Collateral Agent, as applicable, shall give the applicable Grantors 10 Business Days’ written notice (which each Grantor agrees is reasonable notice within the meaning of Section 9-611 of

 

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the New York UCC or its equivalent in other jurisdictions) of the intention of the First Priority Agent or the Collateral Agent, as applicable, to make any sale of Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the First Priority Agent or the Collateral Agent, as applicable, may fix and state in the notice (if any) of such sale. At any such sale, the Collateral, or the portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the First Priority Agent or the Collateral Agent, as applicable, may (in its sole and absolute discretion) determine. The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The First Priority Agent or the Collateral Agent, as applicable, may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In the case of any sale of all or any part of the Collateral made on credit or for future delivery, the Collateral so sold may be retained by the First Priority Agent or the Collateral Agent, as applicable, until the sale price is paid by the purchaser or purchasers thereof, but the First Priority Agent or the Collateral Agent, as applicable, shall not incur any liability in the event that any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in the case of any such failure, such Collateral may be sold again upon notice given in accordance with provisions above. At any public (or, to the extent permitted by law, private) sale made pursuant to this Section 5.01, any Secured Party may bid for or purchase for cash, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all such rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property in accordance with Section 5.02 hereof without further accountability to any Grantor therefor. For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the First Priority Agent or the Collateral Agent, as applicable, shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the First Priority Agent or the Collateral Agent, as applicable, shall have entered into such an agreement all Events of Default shall have been remedied and the Secured Obligations paid in full. As an alternative to exercising the power of sale herein conferred upon it, the First Priority Agent or the Collateral Agent, as applicable, may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the provisions of this Section 5.01 shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions.

SECTION 5.02. Application of Proceeds . (a) Subject to the provisions of the Intercreditor Agreements, the Collateral Agent shall promptly apply the proceeds, moneys or balances of any collection or sale of Collateral, including any such Collateral consisting of cash, as follows:

 

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FIRST, to the payment of all costs and expenses incurred by the Collateral Agent and the Trustee in connection with such collection or sale or otherwise in connection with this Agreement, any other Note Document or any of the Secured Obligations secured by such Collateral, including without limitation all court costs and the fees and expenses of its agents and legal counsel, the repayment of all advances made by the Collateral Agent or the Trustee hereunder or under any other Note Document on behalf of any Grantor and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Note Document, and all other fees, indemnities and other amounts owing or reimbursable to the Collateral Agent under any Note Document in its capacity as such;

SECOND, to the payment in full of the other Secured Obligations secured by such Collateral (the amounts so applied to be distributed among the Secured Parties pro rata in accordance with the respective amounts of such Secured Obligations owed to them on the date of any such distribution); and

THIRD, to the applicable Grantors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct.

The Collateral Agent shall, subject to the provisions of the Intercreditor Agreements, have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of Collateral by the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent) (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the purchase money by the First Priority Agent or the Collateral Agent, as applicable, or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the First Priority Agent or the Collateral Agent, as applicable, or such officer or be answerable in any way for the misapplication thereof.

SECTION 5.03. Securities Act, Etc . In view of the position of the Grantors in relation to the Pledged Collateral, or because of other current or future circumstances, a question may arise under the Securities Act of 1933, as now or hereafter in effect, or any similar federal statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being called the “ Federal Securities Laws ”) with respect to any disposition of the Pledged Collateral permitted hereunder. Each Grantor understands that compliance with the Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Pledged Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Pledged Collateral could dispose of the same. Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Pledged Collateral under applicable Blue Sky or other state securities laws or similar laws analogous in purpose or effect. Each Grantor acknowledges and agrees that in light of such restrictions and limitations, the Collateral Agent, in its sole and absolute discretion, (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Pledged Collateral or part thereof shall have been filed under the Federal

 

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Securities Laws or, to the extent applicable, Blue Sky or other state securities laws and (b) may approach and negotiate with a single potential purchaser to effect such sale. Each Grantor acknowledges and agrees that any such sale might result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions. In the event of any such sale, the Collateral Agent shall incur no responsibility or liability for selling all or any part of the Pledged Collateral at a price that the Collateral Agent, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale were deferred until after registration as aforesaid or if more than a single purchaser were approached. The provisions of this Section 5.03 will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Collateral Agent sells.

ARTICLE VI

Indemnity, Subrogation and Subordination

SECTION 6.01. Indemnity. In addition to all such rights of indemnity and subrogation as the Grantors may have under applicable law (but subject to Section 6.03 hereof), the Company agrees that (a) in the event a payment shall be made by any Subsidiary Grantor under the Note Documents in respect of any Guarantor Obligation of the Company, the Company shall indemnify such Subsidiary Grantor for the full amount of such payment and such Subsidiary Grantor shall be subrogated to the rights of the person to whom such payment shall have been made to the extent of such payment and (b) in the event any assets of any Subsidiary Grantor shall be sold pursuant to this Agreement or any other Collateral Document to satisfy in whole or in part an obligation owed to any Secured Party by the Company, the Company shall indemnify such Subsidiary Grantor in an amount equal to the greater of the book value or the fair market value of the assets so sold.

SECTION 6.02. Contribution and Subrogation. Each Subsidiary Grantor (a “ Contributing Party ”) agrees (subject to Section 6.03 hereof) that, in the event a payment shall be made by any other Subsidiary Grantor hereunder in respect of any Guarantor Obligation, or assets of any other Subsidiary Grantor shall be sold pursuant to any Collateral Document to satisfy any Secured Obligation owed to any Secured Party and such other Subsidiary Grantor (the “ Claiming Party ”) shall not have been fully indemnified by the Company as provided in Section 6.01 hereof, the Contributing Party shall indemnify the Claiming Party in an amount equal to the amount of such payment or the greater of the book value or the fair market value of such assets, as applicable, in each case multiplied by a fraction of which the numerator shall be the net worth of such Contributing Party on the date hereof and the denominator shall be the aggregate net worth of all the Contributing Parties on the date hereof (or, in the case of any Subsidiary Grantor becoming a party hereto pursuant to Section 7.16 hereof, the date of the supplement hereto executed and delivered by such Subsidiary Grantor). Any Contributing Party making any payment to a Claiming Party pursuant to this Section 6.02 shall be subrogated to the rights of such Claiming Party to the extent of such payment.

SECTION 6.03. Subordination; Subrogation. (a) Subject to the limitations set forth in Section 10.02 and Section 11.02 of the Indenture, to the extent permitted by law and to

 

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the extent to do so would not constitute unlawful financial assistance, each Grantor hereby subordinates any and all debts, liabilities and other obligations owed to such Grantor by each other Grantor (the “ Subordinated Obligations ”) to the Secured Obligations (other than contingent or unliquidated obligations or liabilities) owed by it to the extent and in the manner hereinafter set forth in this Section 6.03:

(i) Prohibited Payments, Etc . Each Grantor may receive payments from any other Grantor on account of the Subordinated Obligations. After the occurrence and during the continuance of any Event of Default, upon the Collateral Agent’s request, as directed in writing by the Holders of a majority in aggregate principal amount of the then outstanding Notes, no Grantor shall demand, accept or take any action to collect any payment on account of the Subordinated Obligations until the Secured Obligations (other than contingent or unliquidated obligations or liabilities) have been paid in full in cash.

(ii) Prior Payment of Secured Obligations . In any proceeding under the U.S. Bankruptcy Code or any other U.S. federal, U.S. state or non-U.S. bankruptcy, insolvency, receivership or similar law in any jurisdiction relating to any other Grantor, each Grantor agrees that the Secured Parties shall be entitled to receive payment in full in cash of all Secured Obligations (including all interest and expenses accruing after the commencement of a proceeding under any U.S. Bankruptcy Code or any other U.S. federal, state bankruptcy, insolvency, receivership or similar law in any jurisdiction, whether or not constituting an allowed claim in such proceeding (“ Post-Petition Interest ”)) (other than contingent or unliquidated obligations or liabilities) before such Grantor receives payment of any Subordinated Obligations.

(iii) Turn-Over . After the occurrence and during the continuance of any Event of Default, each Grantor shall, upon the Collateral Agent’s request, as directed in writing by the Holders of a majority in aggregate principal amount of the then outstanding Notes, collect, enforce and receive payments on account of the Subordinated Obligations as trustee for (or, in any jurisdiction whose law does not include the concept of trusts, for the account of) the Secured Parties and deliver such payments to the First Priority Agent or the Collateral Agent, as applicable, on account of the Secured Obligations (including all Post-Petition Interest), together with any necessary endorsements or other instruments of transfer, but without reducing or affecting in any manner the liability of such Grantor under the other provisions of this Agreement.

(iv) Collateral Agent Authorization . Subject to the Intercreditor Agreements and after the occurrence and during the continuance of any Event of Default, the Collateral Agent is authorized and empowered (but without any obligation to so do), in its discretion, (i) in the name of each Grantor, to collect and enforce, and to submit claims in respect of, the Subordinated Obligations and to apply any amounts received thereon to the Secured Obligations (including any and all Post-Petition Interest), and (ii) to require each Grantor (A) to collect and enforce, and to submit claims in respect of, the Subordinated Obligations and (B) to pay any amounts received on such obligations to the Collateral Agent for application to the Secured Obligations (including any and all Post-Petition Interest).

 

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(b) Subject to the limitations set forth in Section 10.02 and Section 11.02 of the Indenture, each Grantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against the Company, any other Grantor or any other insider guarantor that arise from the existence, payment, performance or enforcement of such Grantor’s obligations under or in respect of this Agreement or any other Note Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any Secured Party against the Company, any other Grantor or any other insider guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from the Company, any other Grantor or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Secured Obligations (other than contingent or unliquidated obligations or liabilities) and all other amounts payable under this Agreement shall have been paid in full in cash, and each Grantor agrees that it will not be entitled to bring any action, claim, suit or other proceeding in respect of any right it may have in respect of any payment on its Guarantee or other obligation hereunder until such time. If any amount shall be paid to any Grantor in violation of the immediately preceding sentence at any time prior to the payment in full in cash of the Secured Obligations (other than contingent or unliquidated obligations or liabilities) and all other amounts payable under this Agreement, such amount shall be received and held in trust for the benefit of the Secured Parties, shall be segregated from other property and funds of such Grantor and shall forthwith be paid or delivered to the First Priority Agent (or, except as provided in the Intercreditor Agreements, following the First Priority Lien Obligations Payment Date, the Collateral Agent) in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Secured Obligations and all other amounts payable under this Agreement, whether matured or unmatured, in accordance with the terms of the Note Documents, or to be held as Collateral for any Secured Obligations or other amounts payable under such guarantee thereafter arising. If (i) any Grantor shall make payment to any Secured Party of all or any part of the Secured Obligations, and (ii) all of the Secured Obligations (other than contingent or unliquidated obligations or liabilities) and all other amounts payable under this Agreement shall have been paid in full in cash, the Collateral Agent will, at such Grantor’s request and expense, execute and deliver to such Grantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Grantor of an interest in the Secured Obligations resulting from such payment made by such Grantor pursuant to this Agreement.

ARTICLE VII

Miscellaneous

SECTION 7.01. Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 15.01 of the Indenture. All communications and notices hereunder to any Grantor shall be given to it in care of the Company, with such notice to be given as provided in Section 15.01 of the Indenture.

 

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The Collateral Agent agrees to accept and act upon instructions or directions pursuant to this Agreement sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods. If the party elects to give the Collateral Agent e-mail or facsimile instructions (or instructions by a similar electronic method) and the Collateral Agent in its discretion elects to act upon such instructions, the Collateral Agent’s understanding of such instructions shall be deemed controlling. The Collateral Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the its reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Collateral Agent, including without limitation the risk of the Collateral Agent acting on unauthorized instructions, and the risk or interception and misuse by third parties.

SECTION 7.02. [RESERVED].

SECTION 7.03. Limitation By Law. All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Agreement are intended to be subject to all applicable mandatory provisions of law that may be controlling and to be limited to the extent necessary so that they shall not render this Agreement invalid, unenforceable, in whole or in part, or not entitled to be recorded, registered or filed under the provisions of any applicable law.

SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall become effective as to any party to this Agreement when a counterpart hereof executed on behalf of such party shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon such party and the Collateral Agent and their respective permitted successors and assigns, and shall inure to the benefit of such party, the Collateral Agent and the other Secured Parties and their respective permitted successors and assigns, except that no party shall have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except as contemplated or permitted by this Agreement or the Indenture. This Agreement shall be construed as a separate agreement with respect to each party and may be amended, modified, supplemented, waived or released with respect to any party without the approval of any other party and without affecting the obligations of any other party hereunder.

SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Grantor or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective permitted successors and assigns; provided that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Collateral Agent (unless permitted under the Indenture).

 

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SECTION 7.06. Collateral Agent’s Fees and Expenses; Indemnification. (a) The parties hereto agree that the Collateral Agent shall be entitled to reimbursement of its expenses incurred hereunder as provided in Section 7.07 of the Indenture.

(b) Without limitation of its indemnification obligations under the other Note Documents, each Grantor jointly and severally agrees to indemnify the Collateral Agent against, and hold harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable counsel fees, charges and disbursements (except the allocated cost of in-house counsel), incurred by or asserted against Collateral Agent arising out of, in connection with, or as a result of (i) the execution, delivery or performance of this Agreement or any other Note Document to which such Grantor is a party or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto and thereto of their respective obligations thereunder or the consummation of the transactions contemplated hereby or (ii) any claim, litigation, investigation or proceeding relating to any of the foregoing, or to the Collateral, whether or not the Collateral Agent is a party thereto; provided that such indemnity shall not be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of the Collateral Agent.

(c) Any such amounts payable as provided hereunder shall be additional Note Obligations secured hereby and by the other Collateral Documents. The provisions of this Section 7.06 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Note Document, the consummation of the transactions contemplated hereby, the repayment of any of the Secured Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Note Document, or any investigation made by or on behalf of the Collateral Agent or any other Secured Party. All amounts due under this Section 7.06 shall be payable on written demand therefor accompanied by reasonable documentation with respect to any reimbursement, indemnification or other amount requested.

SECTION 7.07. Collateral Agent Appointed Attorney-in-Fact. Subject to the Intercreditor Agreements, each Grantor hereby appoints the Collateral Agent the attorney-in-fact of such Grantor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof, which appointment is irrevocable and coupled with an interest. The Collateral Agent shall have the right, upon the occurrence and during the continuance of an Event of Default, with full power of substitution either in the Collateral Agent’s name or in the name of such Grantor, (a) to receive, endorse, assign or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof, (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral; (c) to ask for, demand, sue for, collect, receive and give acquittance for any and all moneys due or to become due under and by virtue of any Collateral; (d) to sign the name of any Grantor on any invoice or bill of lading relating to any of the Collateral; (e) to send verifications of Accounts to any Account Debtor; (f) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral; (g) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral; and (h) to use,

 

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sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement (in accordance with its terms), as fully and completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes; provided , that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct.

SECTION 7.08. Governing Law . THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

SECTION 7.09. Waivers; Amendment. (a) No failure or delay by the Collateral Agent, the Trustee or any Holder of the Notes in exercising any right, power or remedy hereunder or under any other Note Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy, or any abandonment or discontinuance of steps to enforce such a right, power or remedy, preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The rights, powers and remedies of the Collateral Agent, the Trustee and the Holders of the Notes hereunder and under the other Note Documents are cumulative and are not exclusive of any rights, powers or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Grantor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 7.09, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the issuance of the Notes shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Collateral Agent, the Trustee or any Holder of the Notes may have had notice or knowledge of such Default or Event of Default at the time. No notice or demand on any Grantor in any case shall entitle any Grantor to any other or further notice or demand in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Grantor or Grantors with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Article 9 of the Indenture.

SECTION 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH

 

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THIS AGREEMENT OR ANY OTHER NOTE DOCUMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.10.

SECTION 7.11. Severability. In the event any one or more of the provisions contained in this Agreement or in any other Note Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 7.12. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract, and shall become effective as provided in Section 7.04 hereof. Delivery of an executed counterpart to this Agreement by facsimile or electronic transmission shall be as effective as delivery of a manually signed original.

SECTION 7.13. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

SECTION 7.14. Jurisdiction; Consent to Service of Process. (a) Each party to this Agreement hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Note Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Collateral Agent, the Trustee or any Holder of the Notes may otherwise have to bring any action or proceeding relating to this Agreement or any other Note Document against any Grantor, or its properties, in the courts of any jurisdiction.

(b) Each party to this Agreement hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Note Document in any New York State or federal court. Each of the

 

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parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

SECTION 7.15. Termination or Release. (a) This Agreement, the pledges made herein, the Security Interest and all other security interests granted hereby shall terminate with respect to all Secured Obligations when all the outstanding Secured Obligations (other than contingent or unliquidated obligations or liabilities) have been paid in full in cash or immediately available funds.

(b) A Grantor shall automatically be released from its obligations hereunder and the Security Interest in the Collateral of such Grantor shall be automatically released upon the consummation of any transaction permitted by the Indenture as a result of which such Grantor ceases to be a Subsidiary of the Company or otherwise ceases to be a Grantor.

(c) The Security Interest in any Collateral shall be released to the extent provided in Section 14.07 of the Indenture or Section 4.2 of the New Intercreditor Agreement.

(d) In connection with any termination or release pursuant to paragraph (a), (b) or (c) of this Section 7.15, the Collateral Agent shall execute and deliver to any Grantor, at such Grantor’s expense all documents that such Grantor shall reasonably request to evidence such termination or release and will duly assign and transfer to such Grantor such of the Pledged Collateral so released that may be in the possession of the Collateral Agent that has not theretofore been sold or otherwise applied or released pursuant to this Agreement (subject, however, to the obligations of the Collateral Agent under the Intercreditor Agreements). Any execution and delivery of documents pursuant to this Section 7.15 shall be without recourse to or warranty by the Collateral Agent.

SECTION 7.16. Additional Subsidiaries. Upon execution and delivery by the Collateral Agent and any Subsidiary that is required to become a party hereto by Section 4.15 of the Indenture of an instrument in the form of Exhibit I hereto (with such additions to such form as the Collateral Agent and the Company may reasonably agree in the case of any such Subsidiary) (a “ Supplement ”), such entity shall become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The execution and delivery of any such instrument shall not require the consent of any other party to this Agreement. The rights and obligations of each party to this Agreement shall remain in full force and effect notwithstanding the addition of any new party to this Agreement.

SECTION 7.17. No Limitations, Etc. (a) Except for termination of a Grantor’s obligations hereunder as expressly provided for in Section 7.15 or, with respect to any Subsidiary Grantor that becomes a party hereto pursuant to Section 7.16 or otherwise, in any Supplement to this Agreement, the obligations of each Grantor hereunder and grant of security interests by such Grantor shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of, and all rights of the Collateral Agent hereunder, the Security Interest in the Article 9 Collateral, the security interest in the Pledged Collateral and all obligations of each Grantor hereunder shall be absolute and unconditional irrespective of, the invalidity, illegality or

 

38


unenforceability of the Secured Obligations (including with respect to any guarantee under the Indenture) or otherwise (other than defense of payment or performance). Without limiting the generality of the foregoing, all rights of the Collateral Agent hereunder, the Security Interest in the Article 9 Collateral, the security interest in the Pledged Collateral and all obligations of each Grantor hereunder, to the fullest extent permitted by applicable law, shall not be discharged or impaired or otherwise affected by, and shall be absolute and unconditional irrespective of, and each Grantor hereby waives any defense to the enforcement hereof by reason of:

(i) the failure of the Collateral Agent or any other Secured Party to assert any claim or demand or to exercise or enforce any right or remedy under the provisions of any Note Document or otherwise;

(ii) any rescission, waiver, amendment or modification of, increase in the Secured Obligations with respect to, or any release from any of the terms or provisions of, any Note Document or any other agreement, including with respect to any Grantor under this Agreement;

(iii) the failure to perfect any security interest in, or the exchange, substitution, release or any impairment of, any security held by the Collateral Agent or any other Secured Party for the Secured Obligations, including with respect to any Grantor under this Agreement;

(iv) any default, failure or delay, willful or otherwise, in the performance of the Secured Obligations, including with respect to any Grantor under this Agreement;

(v) any other act or omission that may or might in any manner or to any extent vary the risk of the Company or any Grantor or otherwise operate as a discharge of the Company or any Grantor as a matter of law or equity (other than the payment in full in cash or immediately available funds of all the Secured Obligations);

(vi) any illegality, lack of validity or enforceability of any Secured Obligation, including with respect to any Grantor under this Agreement;

(vii) any change in the corporate existence, structure or ownership of any Grantor, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting a Grantor or its assets or any resulting release or discharge of any Secured Obligation, including with respect to any Grantor under the Indenture;

(viii) the existence of any claim, set-off or other rights that the Grantor may have at any time against any other Grantor, the Collateral Agent, the Trustee or any other corporation or person, whether in connection herewith or any unrelated transactions, provided that nothing herein will prevent the assertion of any such claim by separate suit or compulsory counterclaim;

(ix) any action permitted or authorized hereunder; or

(x) any other circumstance (including without limitation, any statute of limitations) or any existence of or reliance on any representation by the Collateral Agent

 

39


or the Trustee that might otherwise constitute a defense to, or a legal or equitable discharge of, the Company or the Grantor or any other guarantor or surety.

Each Grantor expressly authorizes the Secured Parties to take and hold security for the payment and performance of the Secured Obligations, to exchange, waive or release any or all such security (with or without consideration), to enforce or apply such security and direct the order and manner of any sale thereof in their sole discretion or to release or substitute any one or more other guarantors or obligors upon or in respect of the Secured Obligations, all without affecting the obligations of any Grantor hereunder.

(b) To the fullest extent permitted by applicable law, each Grantor waives any defense based on or arising out of any defense of any other Grantor or the unenforceability of the Secured Obligations, including with respect to any Guarantor under the Indenture, or any part thereof from any cause, or the cessation from any cause of the liability of any other Grantor, other than the payment in full in cash or immediately available funds of all the Secured Obligations (other than contingent or unliquidated obligations or liabilities). The Collateral Agent and the other Secured Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Secured Obligations, make any other accommodation with any other Grantor or exercise any other right or remedy available to them against any other Grantor, without affecting or impairing in any way the liability of any Grantor hereunder except to the extent the Secured Obligations (other than contingent or unliquidated obligations or liabilities) have been paid in full in cash or immediately available funds. To the fullest extent permitted by applicable law, each Grantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Grantor against any other Grantor, as the case may be, or any security.

SECTION 7.18. Secured Party Authorizations and Indemnifications. By acceptance of the benefits of this Agreement and any other Collateral Documents, each Secured Party other than the Collateral Agent (whether or not a signatory hereto) shall be deemed irrevocably, to the maximum extent permitted by law, (a) to consent to the appointment of the Collateral Agent as its agent hereunder and under such other Collateral Documents, (b) to confirm that the Collateral Agent shall have the authority to act as the exclusive agent of such Secured Party for the enforcement of any provisions of this Agreement and such other Collateral Documents against any Grantor, the exercise of remedies hereunder or thereunder and the giving or withholding of any consent or approval hereunder or thereunder relating to any Collateral or any Grantor’s obligations with respect thereto, (c) to agree that it shall not take any action to enforce any provisions of this Agreement or any other Collateral Document against any Grantor, to exercise any remedy hereunder or thereunder or to give any consents or approvals hereunder or thereunder except as expressly provided in this Agreement or any other Collateral Document and (d) to agree to be bound by the terms of this Agreement and any other Collateral Documents.

SECTION 7.19. Securitization Acknowledgements. For purposes of this Section 7.19, capitalized terms used herein and not otherwise defined in this Agreement shall have the meanings assigned to such terms in the Transfer and Servicing Agreement, dated April 25, 2000 (the “ Transfer and Servicing Agreement ”), among Apple Ridge Services Corporation

 

40


(“ ARSC ”), Cartus Corporation (“ Cartus ”), Cartus Financial Corporation (“ CFC ”), Apple Ridge Funding LLC (“ ARF ”) and The Bank of New York (the “ Apple Ridge Trustee ”), or, if not defined therein, as assigned to such terms in the “ Purchase Agreement ”, “ Receivables Purchase Agreement ” or “ Indenture ” referred to therein, in each case as each such agreement has been amended by (I) that certain Amendment, Agreement and Consent, dated December 20, 2004, (II) that certain Second Omnibus Amendment, dated January 31, 2005, (III) that certain Amendment, Agreement and Consent, dated January 30, 2006, (IV) that certain Third Omnibus Amendment, Agreement and Consent, dated May 12, 2006, (V) that certain Fourth Omnibus Amendment, dated November 29, 2006, (VI) that certain Fifth Omnibus Amendment, dated April 10, 2007 and (VII) that certain Sixth Omnibus Amendment, dated June 6, 2007. Conformed copies of the Transfer and Servicing Agreement, the Purchase Agreement, the Receivables Purchase Agreement and the Indenture are collectively attached to this Agreement as Exhibit II. Subsequent references in this Section 7.19(a) to ARSC, Cartus and CFC below shall mean and be references to such corporations as they currently exist but shall also include references to any limited liability companies which succeed to the assets and liabilities of such companies in connection with a conversion of any such corporation into a limited liability company. The Collateral Agent acknowledges and agrees, and each Secured Party by its holding a Note and/or its acceptance of the benefits of this Agreement acknowledges and agrees, as follows, solely in its capacity as a Secured Party:

(i) Each Secured Party hereby acknowledges that (A) CFC is a limited purpose corporation whose primary activities are restricted in its certificate of incorporation to purchasing Cartus Purchased Assets (originally referred to as CMSC Purchased Assets) from Cartus pursuant to the Purchase Agreement, making Equity Payments, Equity Loans, Mortgage Payoffs and Mortgage Payments to or on behalf of employees or otherwise purchasing Homes in connection with the Pool Relocation Management Agreements, funding such activities through the sale of CFC Receivables (originally referred to as CMF Receivables) to ARSC, and such other activities as it deems necessary or appropriate in connection therewith, (B) ARSC is a limited purpose corporation whose primary activities are restricted in its certificate of incorporation to purchasing from CFC all CFC Receivables acquired by CFC from Cartus or otherwise originated by CFC, funding such acquisitions through the sale of the CFC Receivables to ARF and such other activities as it deems necessary or appropriate to carry out such activities, and (C) ARF is a limited purpose limited liability company whose activities are limited in its limited liability company agreement to purchasing the Pool Receivables from ARSC, funding such acquisitions through the issuance of notes issued pursuant to the Indenture referred to in the Transfer and Servicing Agreement (the “ Apple Ridge Notes ”), pledging such Pool Receivables to the Apple Ridge Trustee and such other activities as it deems necessary or appropriate to carry out such activities.

(ii) Each Secured Party hereby acknowledges and agrees that (A) the foregoing transfers are intended to be true and absolute sales as a result of which Cartus has no right, title and interest in and to any of the Cartus Purchased Assets, any Homes acquired by CFC in connection therewith or any CFC Receivables, including any Related Property relating thereto, any proceeds thereof or earnings thereon (collectively, the “ Pool Assets ”), (B) none of CFC, ARSC or ARF is a Grantor, (C) such Secured Party is not a creditor of, and has no recourse to, CFC, ARSC or ARF pursuant to the Indenture or any

 

41


other Note Document, and (D) such Secured Party has no lien on or claim, contractual or otherwise, arising under the Indenture or any other Note Document to the Pool Assets (whether now existing or hereafter acquired and whether tangible or intangible); provided that nothing herein shall limit any rights the Secured Parties may have to any proceeds or earnings which are transferred from time to time to Cartus by CFC, ARSC or ARF.

(iii) No Secured Party will institute against or join any other person in instituting against CFC, ARSC or ARF any insolvency proceeding, or solicit, join in soliciting, cooperate with or encourage any motion in support of, any insolvency proceeding involving CFC, ARSC or ARF until one year and one day after the payment in full of all Apple Ridge Notes; provided that the foregoing shall not limit the right of any Secured Party to file any claim in or otherwise take any action (not inconsistent with the provisions of this Section 7.19(a)) permitted or required by applicable law with respect to any insolvency proceeding instituted against CFC, ARSC or ARF by any other person.

(iv) Without limiting the foregoing, in the event of any voluntary or involuntary bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any Federal or state bankruptcy or similar law involving Cartus, CFC, ARSC, ARF or any other Affiliates of Cartus as debtor, or otherwise, the Secured Parties agree that if, notwithstanding the intent of the parties, Cartus is found to have a property interest in the Pool Assets, then, in such event, CFC and its assigns, including the Apple Ridge Trustee, shall have a first and prior claim to the Pool Assets, and any claim or rights the Secured Parties may have to the Pool Assets, contractual or otherwise, shall be subject to the prior claims of the Apple Ridge Trustee and the holders of the Apple Ridge Notes until all amounts owing under the Apple Ridge Indenture shall have been paid in full, and the Secured Parties agree, upon written request thereof, to turn over to the Apple Ridge Trustee any amounts received contrary to the provisions of this clause (iv).

(v) In taking a pledge of the Equity Interests of CFC, each Secured Party acknowledges that it has no right, title or interest in or to any assets of CFC, ARSC or ARF other than its rights to receive, as assignee of Cartus, any dividends or other distributions properly declared and paid or made in respect of the Equity Interests of CFC. Each Secured Party further agrees that it will not (A) until after the payment in full of all Apple Ridge Notes, exercise any rights it may have under this Agreement (x) to foreclose on the Equity Interests of CFC or (y) to exercise any voting rights with respect to the Equity Interests of CFC, including any rights to nominate, elect or remove the independent members of the board of directors or managers of CFC or rights to amend the organizational documents of CFC, or (B) until one year and one day after the date on which all Apple Ridge Notes have been paid in full, exercise any voting rights it may have to institute a voluntary bankruptcy proceeding on behalf of CFC.

(vi) Each Secured Party hereby covenants and agrees that it will not agree to any amendment, supplement or other modification of this Section 7.19(a) without the prior written consent of the Apple Ridge Trustee. Each Secured Party further agrees that the provisions of this Section 7.19(a) are made for the benefit of, and may be relied upon and enforced by, the Apple Ridge Trustee and that the Apple Ridge Trustee shall be a third party beneficiary of this Section 7.19(a).

 

42


SECTION 7.20. Successor Collateral Agent. The Collateral Agent may resign as collateral agent hereunder by giving not less than 30 days’ prior written notice to the Trustee and the Holders of the Notes. If the Collateral Agent shall resign as collateral agent under this Agreement, then either (a) a successor collateral agent shall be appointed pursuant to the Indenture, or (b) if a successor collateral agent shall not have been so appointed and approved within the 30 day period following the Collateral Agent’s notice to the Trustee and the Holders of the Notes of its resignation, then the Collateral Agent may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor collateral agent that shall serve as collateral agent until such time as a successor collateral agent is appointed pursuant to the Indenture. Upon its appointment, such successor collateral agent shall succeed to the rights, powers and duties as collateral agent, and the term “Collateral Agent” under this Agreement and “Collateral Agent” under this Agreement and any other Collateral Document shall mean such successor, effective upon its appointment, and the former collateral agent’s rights, powers and duties as collateral agent shall be terminated without any other or further act or deed on the part of such former collateral agent or any of the parties to this Agreement.

ARTICLE VIII

The Collateral Agent

SECTION 8.01. The Collateral Agent. The Bank of New York Mellon Trust Company, N.A. has been appointed Collateral Agent for the Secured Parties pursuant to the Indenture. It is expressly understood and agreed that any authority conferred upon the Collateral Agent hereunder is subject to the terms of the delegation of authority made by the Secured Parties to the Collateral Agent pursuant to the Indenture, and that the Collateral Agent has agreed to act (and any successor collateral agent shall act) as such hereunder only on the express conditions contained in the Indenture and the other Note Documents. Any successor collateral agent appointed pursuant to the Indenture shall be entitled to all the rights, interests and benefits of the Collateral Agent hereunder. The Collateral Agent’s sole duty, other than the obligations under the Intercreditor Agreement, with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Collateral Agent deals with similar property for its own account, subject to the terms of the Intercreditor Agreement. Beyond such duty, the Collateral Agent shall have no duty as to any Collateral in its possession or control or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Collateral Agent shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral.

In addition, the rights, privileges, protections, immunities and benefits given to the Trustee and the Collateral Agent under the Indenture, including, without limitation, the right to be indemnified, are incorporated herein as if set forth herein in full and shall be extended to, and shall be enforceable by, the Collateral Agent hereunder and under the other Collateral

 

43


Documents, and by each agent, custodian and other Person employed to act hereunder or thereunder.

Without limiting the foregoing, in no event shall the Collateral Agent be responsible or liable for any failure or delay in the performance of its obligations hereunder or under any other Collateral Document arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Collateral Agent shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances

ARTICLE IX

The Intercreditor Agreement

SECTION 9.01. The Intercreditor Agreement. Notwithstanding any provision to the contrary, the liens and security interests granted to the Collateral Agent pursuant to this Agreement, and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreements. In the event of any conflict between the terms of the Intercreditor Agreements and this Agreement, the terms of the Intercreditor Agreement shall govern.

[Signature Page Follows]

 

44


IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

 

DOMUS INTERMEDIATE HOLDINGS CORP.,
  By:   /s/ Anthony E. Hull
    Name: Anthony E. Hull
    Title: Chief Financial Officer

 

[Signature Page to the Collateral Agreement]


REALOGY CORPORATION,
  By:   /s/ Anthony E. Hull
    Name: Anthony E. Hull
    Title: Chief Financial Officer

 

[Signature Page to the Collateral Agreement]


CARTUS CORPORATION

 

CDRE TM LLC

 

DOMUS INTERMEDIATE HOLDINGS CORP.

 

NRT INSURANCE AGENCY, INC.

 

REALOGY CORPORATION

 

REALOGY OPERATIONS LLC

 

REALOGY SERVICES GROUP LLC

 

REALOGY SERVICES VENTURE PARTNER LLC

 

SOTHEBY’S INTERNATIONAL REALTY LICENSEE LLC

 

WREM, INC.

  By:   /s/ Anthony E. Hull
    Name: Anthony E. Hull
    Title: Chief Financial Officer

 

[Signature Page to the Collateral Agreement]


CARTUS ASSET RECOVERY CORPORATION

 

CARTUS PARTNER CORPORATION

 

J. W. RIKER – NORTHERN R.I., INC.

 

FEDSTATE STRATEGIC CONSULTING, INCORPORATED

 

LAKECREST TITLE, LLC

 

NRT PHILADELPHIA LLC

 

REFERRAL NETWORK LLC

 

THE CORCORAN GROUP EASTSIDE, INC.

  By:   /s/ Anthony E. Hull
    Name: Anthony E. Hull
    Title: Executive Vice President & Treasurer

 

[Signature Page to the Collateral Agreement]


AMERICAN TITLE COMPANY OF HOUSTON

 

ATCOH HOLDING COMPANY

 

BURNET TITLE LLC

 

BURNET TITLE HOLDING LLC

 

BURROW ESCROW SERVICES, INC.

 

CORNERSTONE TITLE COMPANY

 

EQUITY TITLE COMPANY

 

EQUITY TITLE MESSENGER SERVICE HOLDING LLC

 

FIRST CALIFORNIA ESCROW CORPORATION

 

FRANCHISE SETTLEMENT SERVICES LLC

 

GUARDIAN HOLDING COMPANY

 

GUARDIAN TITLE AGENCY, LLC

 

GUARDIAN TITLE COMPANY

 

GULF SOUTH SETTLEMENT SERVICES, LLC

 

KEYSTONE CLOSING SERVICES LLC

 

MARKET STREET SETTLEMENT GROUP LLC

 

MID-ATLANTIC SETTLEMENT SERVICES LLC

 

NATIONAL COORDINATION ALLIANCE LLC

 

NRT SETTLEMENT SERVICES OF MISSOURI LLC

 

NRT SETTLEMENT SERVICES OF TEXAS LLC

 

PROCESSING SOLUTIONS LLC

 

SECURED LAND TRANSFERS LLC

 

ST. JOE TITLE SERVICES LLC

 

TAW HOLDING INC.

 

TEXAS AMERICAN TITLE COMPANY

 

TITLE RESOURCE GROUP AFFILIATES HOLDINGS LLC

  By:   /s/ Thomas N. Rispoli
    Name: Thomas N. Rispoli
    Title: Chief Financial Officer

 

[Signature Page to the Collateral Agreement]


TITLE RESOURCE GROUP HOLDINGS LLC

 

TITLE RESOURCE GROUP LLC

 

TITLE RESOURCE GROUP SERVICES LLC

 

TITLE RESOURCES INCORPORATED

 

TRG SERVICES, ESCROW, INC.

 

TRG SETTLEMENT SERVICES, LLP

 

WAYDAN TITLE, INC.

 

WEST COAST ESCROW COMPANY

  By:   /s/ Thomas N. Rispoli
    Name: Thomas N. Rispoli
    Title: Chief Financial Officer

 

[Signature Page to the Collateral Agreement]


BETTER HOMES AND GARDENS REAL ESTATE LLC

 

BETTER HOMES AND GARDENS REAL ESTATE LICENSEE LLC

 

CENTURY 21 REAL ESTATE LLC

 

CGRN, INC.

 

COLDWELL BANKER LLC

 

COLDWELL BANKER REAL ESTATE LLC

 

ERA FRANCHISE SYSTEMS LLC

 

GLOBAL CLIENT SOLUTIONS LLC

 

ONCOR INTERNATIONAL LLC

 

REALOGY FRANCHISE GROUP LLC

 

REALOGY GLOBAL SERVICES LLC

 

REALOGY LICENSING LLC

 

SOTHEBY’S INTERNATIONAL REALTY AFFILIATES LLC

 

WORLD REAL ESTATE MARKETING LLC

  By:   /s/ Andrew G. Napurano
    Name: Andrew G. Napurano
    Title: Chief Financial Officer

 

[Signature Page to the Collateral Agreement]


FSA MEMBERSHIP SERVICES, LLC
  By:   /s/ Marilyn J. Wasser
    Name: Marilyn J. Wasser
    Title: Executive Vice President

 

[Signature Page to the Collateral Agreement]


ALPHA REFERRAL NETWORK LLC

 

ASSOCIATED CLIENT REFERRAL LLC

 

BURGDORFF LLC

 

BURGDORFF REFERRAL ASSOCIATES LLC

 

BURNET REALTY LLC

 

CAREER DEVELOPMENT CENTER, LLC

 

COLDWELL BANKER COMMERCIAL PACIFIC PROPERTIES LLC

 

COLDWELL BANKER PACIFIC PROPERTIES LLC

 

COLDWELL BANKER REAL ESTATE SERVICES LLC

 

COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY

 

COLDWELL BANKER RESIDENTIAL BROKERAGE LLC

 

COLDWELL BANKER RESIDENTIAL REAL ESTATE LLC

 

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK

 

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK, INC.

 

COLORADO COMMERCIAL, LLC

 

HOME REFERRAL NETWORK LLC

 

JACK GAUGHEN LLC

 

NRT ARIZONA LLC

 

NRT ARIZONA COMMERCIAL LLC

 

NRT ARIZONA REFERRAL LLC

 

NRT COLORADO LLC

 

NRT COLUMBUS LLC

 

NRT COMMERCIAL LLC

  By:   /s/ Kevin R. Greene
    Name: Kevin R. Greene
    Title: Chief Financial Officer

 

[Signature Page to the Collateral Agreement]


NRT COMMERCIAL UTAH LLC

 

NRT DEVELOPMENT ADVISORS LLC

 

NRT DEVONSHIRE LLC

 

NRT HAWAII REFERRAL, LLC

 

NRT LLC

 

NRT MID-ATLANTIC LLC

 

NRT MISSOURI LLC

 

NRT MISSOURI REFERRAL NETWORK LLC

 

NRT NEW ENGLAND LLC

 

NRT NEW YORK LLC

 

NRT NORTHFORK LLC

 

NRT PITTSBURGH LLC

 

NRT REFERRAL NETWORK LLC

 

NRT RELOCATION LLC

 

NRT REOEXPERTS LLC

 

NRT SUNSHINE INC.

 

NRT TEXAS LLC

 

NRT UTAH LLC

 

REAL ESTATE REFERRAL LLC

 

REAL ESTATE REFERRALS LLC

 

REAL ESTATE SERVICES LLC

 

REFERRAL ASSOCIATES OF NEW ENGLAND LLC

 

REFERRAL NETWORK, LLC

 

REFERRAL NETWORK PLUS, INC.

 

SOTHEBY’S INTERNATIONAL REALTY, INC.

 

SOTHEBY’S INTERNATIONAL REALTY REFERRAL COMPANY, LLC

 

THE SUNSHINE GROUP (FLORIDA) LTD. CORP.

 

THE SUNSHINE GROUP, LTD.

 

VALLEY OF CALIFORNIA, INC.

  By:   /s/ Kevin R. Greene
    Name: Kevin R. Greene
    Title: Chief Financial Officer

 

[Signature Page to the Collateral Agreement]


THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Collateral Agent,
  By:   /s/ Justin Huff
    Name: Justin Huff
    Title: Senior Associate

 

[Signature Page to the Collateral Agreement]


Schedule I to the

Collateral Agreement

EQUITY INTERESTS

 

Issuer

   Issued and
Outstanding
Equity Interests
 

Type of Equity Interest

  

Owner and Percentage of Equity Interest

  

Certificate
Number

Alpha Referral Network LLC    100%   Common Stock    Coldwell Banker Residential Referral Network – 100%    Uncertificated
American Title Company of Houston    1,000   Common Stock    ATCOH Holding Company – 100%    3
Associated Client Referral LLC    100%   Membership Units    NRT Mid-Atlantic LLC – 100%    Uncertificated
ATCOH Holding Company    160   Common Stock    Texas American Title Company – 100%    16
Better Homes and Gardens Real Estate Licensee LLC    100%   Membership Units    Realogy Services Group LLC – 100%    Uncertificated
Better Homes and Gardens Real Estate LLC    100%   Membership Units    Realogy Services Group LLC    Uncertificated
Burgdorff LLC    100%   Membership Units    NRT LLC    Uncertificated
Burgdorff Referral Associates LLC    100%   Membership Units    NRT LLC    Uncertificated
Burnet Realty LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
Burnet Title Holding LLC    10,000   Membership Interests    Title Resource Group LLC – 100%    8
Burnet Title LLC    100%   Membership Units    Title Resource Group LLC – 100%    Uncertificated
Burrow Escrow Services, Inc.    1,000   Common Stock    Title Resource Group LLC – 100%    3 (no stock pledge)
Career Development Center, LLC    100   Common Stock    NRT Arizona LLC – 100%    2
Cartus Asset Recovery Corporation    1000   Common Stock    Cartus Corporation – 100%    2


Issuer

   Issued and
Outstanding
Equity Interests
 

Type of Equity Interest

  

Owner and Percentage of Equity Interest

  

Certificate
Number

Cartus Corporation    850   Common Stock    Realogy Services Group LLC – 100%    5
Cartus Corporation (Canada)    65   Common Stock    Cartus Corporation – 65%    C-1
Cartus Financial Corporation    1,000   Common Stock    Cartus Corporation – 100%    3
Cartus Holdings Limited    4,875,000   Ordinary Shares    Cartus Corporation – 65%    6
Cartus Partner Corporation    100   Common Stock    Cartus Corporation – 100%    2
Cartus Relocation Corporation    1,000   Common Stock    Cartus Corporation – 100%    2
CDRE TM LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
Century 21 Real Estate LLC    1,000   Membership Units    Realogy Services Group LLC – 100%    9
CGRN, Inc.    100   Common Stock    Realogy Services Group LLC – 100%    4
Coldwell Banker Commercial Pacific Properties LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
Coldwell Banker LLC    100%   Membership Units    Realogy Services Group LLC – 100%    Uncertificated
Coldwell Banker Pacific Properties LLC    100%   Membership Units    Coldwell Banker Real Estate Services LLC    100%
Coldwell Banker Real Estate LLC    100%   Membership Units    Coldwell Banker LLC – 100%    Uncertificated
Coldwell Banker Real Estate Services LLC    100%   Membership Units    Coldwell Banker Residential Real Estate LLC – 100%    Uncertificated
Coldwell Banker Residential Brokerage Company    1,000   Common Stock    Coldwell Banker Residential Brokerage LLC – 100%    9
Coldwell Banker Residential Brokerage LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
Coldwell Banker Residential Real Estate LLC    100%   Membership Units    Coldwell Banker Residential Brokerage LLC – 100 %    Uncertificated

 

I-2


Issuer

   Issued and
Outstanding
Equity Interests
 

Type of Equity Interest

  

Owner and Percentage of Equity Interest

  

Certificate
Number

Coldwell Banker Residential Referral Network    1,000   Common Stock    Coldwell Banker Residential Brokerage LLC – 100%    5
Coldwell Banker Residential Referral Network, Inc.    100   Common Stock    NRT Pittsburgh LLC – 100%    25
Colorado Commercial, LLC    100%   Membership Interests    NRT Colorado LLC – 100%    Uncertificated
Cornerstone Title Company    100   Common Stock    Title Resource Group Holdings LLC – 100%    4
Equity Title Company    6,000   Common Stock    Title Resource Group LLC – 100%    52
Equity Title Messenger Service Holding LLC    100%   Membership Units    Title Resource Group LLC – 100%    Uncertificated
ERA Franchise Systems LLC    100%   Membership Units    Realogy Services Group LLC – 100%    Uncertificated
FedState Strategic Consulting, Incorporated    100   Common Stock    Realogy Operations LLC – 100%    4
First California Escrow Corporation    100   Common Stock    Title Resource Group Affiliates Holdings LLC – 100%    2
Franchise Settlement Services LLC    100%   Membership Units    Title Resource Group LLC – 100%    Uncertificated
FSA Membership Services, LLC    100   Membership Units    Realogy Services Group LLC – 100%    1
Global Client Solutions LLC    100%   Membership Units    Realogy Franchise Group LLC – 100%    Uncertificated
Guardian Holding Company    100   Common Stock    Title Resource Group LLC – 100%    3
Guardian Title Agency, LLC    100   Membership Units    Title Resource Group LLC – 100%    5
Guardian Title Company    7,000   Common Stock    Title Resource Group LLC – 100%    7
Gulf South Settlement Services, LLC    100   Membership Units    Title Resource Group Affiliates Holdings LLC – 100%    1
Home Referral Network LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated

 

I-3


Issuer

   Issued and
Outstanding
Equity Interests
 

Type of Equity Interest

  

Owner and Percentage of Equity Interest

  

Certificate
Number

J. W. Riker – Northern R. I., Inc.    600   Common Stock    NRT LLC – 100%    2
Jack Gaughen LLC    100%   Membership Units    NRT Mid-Atlantic LLC – 100%    Uncertificated
Keystone Closing Services LLC    50   Membership Units    Title Resource Group LLC – 100%    4
Lakecrest Title LLC    100%   Membership Units    Cartus Corporation – 100%    Uncertificated
Market Street Settlement Group LLC    100%   Membership Units    Title Resource Group Holdings LLC – 100%    Uncertificated
Mid-Atlantic Settlement Services LLC    350   Membership Interests    Title Resource Group LLC – 100%    1
National Coordination Alliance LLC    100%   Membership Units    Title Resource Group LLC – 100%    Uncertificated
NRT Arizona Commercial LLC    100%   Membership Units    NRT Arizona LLC – 100%    Uncertificated
NRT Arizona LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
NRT Arizona Referral LLC    100%   Membership Units    NRT Arizona LLC – 100%    Uncertificated
NRT Colorado LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
NRT Columbus LLC    100%   Membership Units    Coldwell Banker Residential Real Estate LLC – 100%    Uncertificated
NRT Commercial LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
NRT Commercial Utah LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
NRT Development Advisors LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
NRT Devonshire LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
NRT Hawaii Referral, LLC    100   Membership Units    NRT LLC – 100%    1
NRT Insurance Agency, Inc.    1,000   Common Stock    NRT LLC – 100%    3
NRT LLC    100%   Membership Units    Realogy Services Group LLC – 100%    Uncertificated
NRT Mid-Atlantic LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated

 

I-4


Issuer

   Issued and
Outstanding
Equity Interests
 

Type of Equity Interest

  

Owner and Percentage of Equity Interest

  

Certificate
Number

NRT Missouri LLC    100%   Membership Units    Coldwell Banker Residential Brokerage LLC – 100%    Uncertificated
NRT Missouri Referral Network LLC    100%   Membership Units    Coldwell Banker Residential Referral Network – 100%    Uncertificated
NRT New England LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
NRT New York LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
NRT Northfork LLC    100%   Membership Units    NRT New York LLC – 100%    Uncertificated
NRT Philadelphia LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
NRT Pittsburgh LLC    100%   Membership Units    Coldwell Banker Residential Real Estate LLC – 100%    Uncertificated
NRT Referral Network LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
NRT Relocation LLC    100   Membership Units    Realogy Operations LLC – 100%    2
NRT REOExperts LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
NRT Settlement Services of Missouri LLC    100%   Membership Units    Title Resource Group LLC    Uncertificated
NRT Settlement Services of Texas LLC    100%   Membership Units    Title Resource Group LLC – 100%    Uncertificated
NRT Sunshine Inc.    100   Common Stock    NRT LLC – 100%    1
NRT Texas LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
NRT Utah LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated
ONCOR International LLC    100   Membership Units    Realogy Franchise Group LLC – 100% [f/k/a Realogy Franchise Group, Inc.]    2
Pacific Property Referrals, Inc.    1,000   Common Stock    Coldwell Banker Real Estate Services LLC    3
Processing Solutions LLC    100%   Membership Units    Title Resource Group LLC – 100%    Uncertificated
Real Estate Referral LLC    100%   Membership Units    NRT New England LLC – 100%    Uncertificated
Real Estate Referrals LLC    100%   Membership Units    NRT Mid-Atlantic LLC – 100%    Uncertificated
Real Estate Services LLC    100%   Membership Units    NRT LLC – 100%    Uncertificated

 

I-5


Issuer

   Issued and
Outstanding
Equity Interests
 

Type of Equity Interest

  

Owner and Percentage of Equity Interest

  

Certificate
Number

Realogy Blue Devil Holdco LLC    65   Membership Units    Coldwell Banker Real Estate LLC [f/k/a Coldwell Banker Real Estate Corporation] – 65%    1
Realogy Cavalier Holdco, LLC    65   Membership Units    Cartus Corporation – 65%    2
Realogy Corporation    100   Common Stock    Domus Intermediate Holdings Corp. – 100%    2
Realogy Franchise Group LLC    100%   Membership Units    Realogy Services Group LLC – 100%    Uncertificated
Realogy Global Services LLC    100%   Membership Units    Realogy Services Group LLC – 100%    Uncertificated
Realogy Licensing LLC    100%   Membership Units    Realogy Services Group LLC – 100%    Uncertificated
Realogy Operations LLC    100%   Membership Units    Realogy Services Group LLC – 100%    Uncertificated
Realogy Services Group LLC    100   Membership Units    Realogy Corporation – 100%    2
Realogy Services Venture Partner LLC    100%   Common Stock    Realogy Services Group LLC – 100%    Uncertificated
Realty Stars, Ltd.    100   Common Stock    Coldwell Banker Residential Real Estate LLC – 100%    3
Referral Associates of New England LLC    100%   Membership Units    NRT New England LLC – 100%    Uncertificated
Referral Network LLC    100   Common Stock    Coldwell Banker Residential Referral Network – 100%    26
Referral Network Plus, Inc.    1000   Common Stock    Coldwell Banker Residential Brokerage Company – 100%    2
Referral Network, LLC    100%   Membership Interests    NRT Colorado LLC – 100%    Uncertificated
Secured Land Transfers LLC    100%   Membership Interests    Title Resource Group LLC – 100%    Uncertificated
Sotheby’s International Realty Affiliates LLC    100%   Membership Units    Realogy Services Group LLC – 100%    Uncertificated
Sotheby’s International Realty Licensee LLC    100%   Membership Units    Realogy Services Group LLC – 100%    Uncertificated
Sotheby’s International Realty Limited    65   Ordinary Shares    Sotheby’s International Realty, Inc. – 65%    1

 

I-6


Issuer

   Issued and
Outstanding
Equity Interests
 

Type of Equity Interest

  

Owner and Percentage of Equity Interest

  

Certificate
Number

Sotheby’s International Realty Referral Company, LLC    100   Membership Units    Sotheby’s International Realty, Inc. – 100%    1
Sotheby’s International Realty, Inc.    8,333   Common Stock    NRT LLC – 100%    6
St. Joe Title Services LLC    100%   Membership Interests    Title Resource Group LLC – 100%    Uncertificated
TAW Holding Inc.    750   Common Stock    ATCOH Holding Company – 100%    12
Texas American Title Company    450   Common Stock    Title Resource Group LLC – 100%    13
The Corcoran Group Eastside, Inc.    100   Common Stock    NRT New York LLC – 100%    5
The Sunshine Group (Florida) Ltd. Corp.    1,000   Common Stock    NRT Sunshine, Inc. – 100%    6
The Sunshine Group, Ltd.    1,000   Common Stock    NRT Sunshine Inc. – 100%    3
Title Resource Group Affiliates Holdings LLC    100%   Membership Units    Title Resource Group Holdings LLC – 100%    Uncertificated
Title Resource Group Holdings LLC    100%   Membership Units    Title Resource Group LLC – 100%    Uncertificated
Title Resource Group LLC    100%   Membership Units    Realogy Services Group LLC – 100%    Uncertificated
Title Resource Group Services LLC    100%   Membership Units    St. Joe Title Services LLC – 100%    Uncertificated
Title Resources Incorporated    1,500   Common Stock    TAW Holding Inc. – 100%    1
TRG Services, Escrow, Inc.    100   Common Stock    Realogy Services Group LLC – 100%    1 (Surrendered to California Regulatory Authority)
TRG Settlement Services, LLP    1

99

  Partnership Interest   

Title Resource Group LLC – 1%

Title Resource Group Services LLC – 99%

  

4

5

 

I-7


Issuer

   Issued and
Outstanding
Equity Interests
 

Type of Equity Interest

  

Owner and Percentage of Equity Interest

  

Certificate
Number

Valley of California, Inc.    1,000   Common Stock    Coldwell Banker Residential Brokerage LLC – 100%    5
Waydan Title, Inc.    1,000   Common Stock    ATCOH Holding Company – 100%    7
West Coast Escrow Company    20,000   Common Stock    NRT LLC – 100% [f/k/a NRT Incorporated]    9 (no stock pledge)
World Real Estate Marketing LLC    100%   Membership Units    Century 21 Real Estate LLC    Uncertificated
WREM, Inc.    100%   Common Stock    World Real Estate Marketing LLC – 100%    1

PLEDGED DEBT SECURITIES

Pledged Global Intercompany Note, dated May 7, 2009

 

I-8


Schedule II to the

Collateral Agreement

INTELLECTUAL PROPERTY OWNED BY GRANTORS

PATENTS AND PATENT APPLICATIONS

US Patent Applications

 

Owner Name

  

Type of
Patent

  

Patent Title

   Application No.
Realogy Operations LLC    Utility    Methods and Arrangements For Facilitating The Processing of Real Estate Information    10/167,132
Cartus Corporation    Utility    System and Method of Selecting Freight Forwarding Companies    10/819,813
Coldwell Banker Real Estate LLC    Utility    System and Method for Searching Real Estate Listings Using Imagery    61/392,351

 

II-1


TRADEMARKS AND TRADEMARK APPLICATIONS

Realogy Services Group LLC

Trademark Applications and Registrations

 

Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

HOMEBASE POWERED BY REALOGY    United States    Realogy Services Group LLC    77581813    3723479
HOUSE IN A GLOBE DESIGN    United States    Realogy Services Group LLC    85101133   
HOUSE IN A GLOBE DESIGN    United States    Realogy Services Group LLC    85101145   
HOUSE IN A GLOBE DESIGN    United States    Realogy Services Group LLC    85101152   
HOUSE IN A GLOBE DESIGN    United States    Realogy Services Group LLC    85101156   
HOUSE IN A GLOBE DESIGN    United States    Realogy Services Group LLC    85101159   
OpenHouse.com & Design    United States    Realogy Services Group LLC    77216470    3493594
REALOGY    United States    Realogy Services Group LLC    78810039    3277830
REALOGY    United States    Realogy Services Group LLC    78810051    3277831
REALOGY    United States    Realogy Services Group LLC    78810057    3584743
REALOGY    United States    Realogy Services Group LLC    78810142    3593139
REALOGY (Stylized)    United States    Realogy Services Group LLC    78818186    3277877
REALOGY (Stylized)    United States    Realogy Services Group LLC    78818197    3277878
REALOGY (Stylized)    United States    Realogy Services Group LLC    78818200    3584749
REALOGY (Stylized)    United States    Realogy Services Group LLC    78818203    3581754
REALOGY: THE BUSINESS OF REAL ESTATE    United States    Realogy Services Group LLC    78842038    3277954
REALOGY: THE BUSINESS OF REAL ESTATE    United States    Realogy Services Group LLC    78842043    3581762
REALOGY: THE BUSINESS OF REAL ESTATE    United States    Realogy Services Group LLC    78842046    3581763
REALOGY: THE BUSINESS OF REAL ESTATE    United States    Realogy Services Group LLC    78849192    3277967

Better Homes and Gardens Real Estate Licensee LLC

Trademark Applications and Registrations

 

Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

GREENLIGHT PROGRAM    United States    Better Homes and Gardens Real Estate Licensee LLC    77822354    3792595
HOME SELECTION ASSISTANT    United States    Better Homes and Gardens Real Estate Licensee LLC    77914332   
BROKERMAP    United States    Better Homes and Gardens Real Estate Licensee LLC    77924620   

 

II-2


Cartus Corporation

Trademark Applications and Registrations

 

Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

CARTUS    Australia    Cartus Corporation    1097159    1097159
CARTUS AND GLOBE DESIGN    Australia    Cartus Corporation    1099707    1099707

CARTUS AND GLOBE DESIGN

(in color)

   Australia    Cartus Corporation    1100296    1100296
CARTUS RESOURCES    Australia    Cartus Corporation    1097160    1097160
GLOBE DESIGN    Australia    Cartus Corporation    1099706    1099706
GLOBE DESIGN (in color)    Australia    Cartus Corporation    1100295    1100295
CARTUS    Canada    Cartus Corporation    1288571    735956
CARTUS AND GLOBE DESIGN    Canada    Cartus Corporation    1290421    735755
GLOBALNET    Canada    Cartus Corporation    798683    577034
GLOBE DESIGN    Canada    Cartus Corporation    1290423    735769
GLOBE DESIGN (in color)    Canada    Cartus Corporation    1290424    735757
Line & Dot Design**    Canada    Cendant Mobility Services Corp    847387    499069
PRIMACY    Canada    Primacy Relocation LLC*    1248514    658012
PRIMACY RELOCATION    Canada    Primacy Relocation LLC*    1248517    673455
SHORTEN THE DISTANCE    Canada    Primacy Relocation LLC*    1248516    662164
CARTUS    China (People’s Republic)    Cartus Corporation    5159090   
CARTUS    China (People’s Republic)    Cartus Corporation    5158802    5158802
CARTUS    China (People’s Republic)    Cartus Corporation    5158803    5158803
CARTUS    China (People’s Republic)    Cartus Corporation    5158804    5158804
CARTUS AND GLOBE DESIGN    China (People’s Republic)    Cartus Corporation    5168322   
CARTUS AND GLOBE DESIGN    China (People’s Republic)    Cartus Corporation    5168323    5168323
CARTUS AND GLOBE DESIGN    China (People’s Republic)    Cartus Corporation    5168324    5168324
CARTUS AND GLOBE DESIGN    China (People’s Republic)    Cartus Corporation    5168325    5168325
GLOBE DESIGN    China (People’s Republic)    Cartus Corporation    5168334    5168334
GLOBE DESIGN    China (People’s Republic)    Cartus Corporation    5168335    5168335
GLOBE DESIGN    China (People’s Republic)    Cartus Corporation    5168316    5168316

 

II-3


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

GLOBE DESIGN    China (People’s Republic)    Cartus Corporation    5168317    5168317
GLOBE DESIGN (in color)    China (People’s Republic)    Cartus Corporation    5168318    5168318
GLOBE DESIGN (in color)    China (People’s Republic)    Cartus Corporation    5168319    5168319
GLOBE DESIGN (in color)    China (People’s Republic)    Cartus Corporation    5168320    5168320
GLOBE DESIGN (in color)    China (People’s Republic)    Cartus Corporation    5168321    5168321
ONLY RELOCATION. ONLY PRIMACY    China (People’s Republic)    Primacy Relocation LLC*    6202280    6202280
ONLY RELOCATION. ONLY PRIMACY    China (People’s Republic)    Primacy Relocation LLC*    6202279    6202279
PRIMACY PU BAI SI in Chinese Characters    China (People’s Republic)    Primacy Relocation LLC*    7182483   
PRIMACY PU BAI SI in Chinese Characters    China (People’s Republic)    Primacy Relocation LLC*    7182482   
PRIMACY PU BAI SI in Chinese Characters    China (People’s Republic)    Primacy Relocation LLC*    7843180   
PRIMACY RELOCATION    China (People’s Republic)    Primacy Relocation LLC*    6202321    6202321
PRIMACY RELOCATION    China (People’s Republic)    Primacy Relocation LLC*    6202322    6202322
PRIMACY RELOCATION (Stylized)    China (People’s Republic)    Primacy Relocation LLC*    6202323    6202323
PRIMACY RELOCATION (Stylized)    China (People’s Republic)    Primacy Relocation LLC*    6202324    6202324
PU BAI SI (Chinese Characters)    China (People’s Republic)    Primacy Relocation LLC*    7186714   
PU BAI SI (Chinese Characters)    China (People’s Republic)    Primacy Relocation LLC*    7186713    7186713
PU BAI SI in Chinese Characters    China (People’s Republic)    Primacy Relocation LLC*    7843180   
SHORTEN THE DISTANCE    China (People’s Republic)    Primacy Relocation LLC*    6202329    6202329
SHORTEN THE DISTANCE    China (People’s Republic)    Primacy Relocation LLC*    6202330   
SUNBURST LOGO    China (People’s Republic)    Primacy Relocation LLC*    6202325    6202325
SUNBURST LOGO    China (People’s Republic)    Primacy Relocation LLC*    6202326    6202326
THE PRIMACY DIFFERENCE    China (People’s Republic)    Primacy Relocation LLC*    6202327    6202327
THE PRIMACY DIFFERENCE    China (People’s Republic)    Primacy Relocation LLC*    6202328    6202328
CARTUS    European Community    Cartus Corporation    4892832    4892832
CARTUS AND GLOBE DESIGN    European Community    Cartus Corporation    4924023    4924023
GLOBALNET    European Community    Cartus Corporation    126607    126607
GLOBE DESIGN    European Community    Cartus Corporation    4924031    4924031

 

II-4


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

GLOBE DESIGN (in color)    European Community    Cartus Corporation    4924049    4924049
PRIMACY RELOCATION    European Community    Primacy Relocation LLC*    3803475    3803475
SHORTEN THE DISTANCE    European Community    Primacy Relocation LLC*    3803921    3803921
CARTUS    Hong Kong    Cartus Corporation    300575721    300575721

CARTUS AND GLOBE DESIGN

(in series)

   Hong Kong    Cartus Corporation    300583588    300583588
CARTUS RESOURCES    Hong Kong    Cartus Corporation    300575730    300575730
GLOBE DESIGN (in series)    Hong Kong    Cartus Corporation    300583597    300583597
ONLY RELOCATION. ONLY PRIMACY    Hong Kong    Primacy Relocation LLC*    300933921    300933921
PRIMACY & DEVICE    Hong Kong    Primacy Relocation LLC*    300933930    300933930
SUNBURST LOGO    Hong Kong    Primacy Relocation LLC*    300932959    300932959
THE PRIMACY DIFFERENCE    Hong Kong    Primacy Relocation LLC*    300933903    300933903
CARTUS    India    Cartus Corporation    1960888   
CARTUS    India    Cartus Corporation    1960889   
CARTUS    India    Cartus Corporation    1960890   
CARTUS    India    Cartus Corporation    1960891   
CARTUS AND GLOBE DESIGN    India    Cartus Corporation    1960896   
CARTUS AND GLOBE DESIGN    India    Cartus Corporation    1960897   
CARTUS AND GLOBE DESIGN    India    Cartus Corporation    1960898   
CARTUS AND GLOBE DESIGN    India    Cartus Corporation    1960899   
GLOBE DESIGN    India    Cartus Corporation    1960895   
GLOBE DESIGN    India    Cartus Corporation    1960894   
GLOBE DESIGN    India    Cartus Corporation    1960893   
GLOBE DESIGN    India    Cartus Corporation    1960892   
PRIMACY & Sunburst Logo (Series of 3)    India    Primacy Relocation LLC*    1677337   
SUNBURST LOGO (series of 3)    India    Primacy Relocation LLC*    1677336   
CARTUS AND GLOBE DESIGN    Mexico    Cartus Corporation    842198    992079
CARTUS    Singapore    Cartus Corporation    T0602094F    T0602094F
CARTUS    Singapore    Cartus Corporation    T0602095D    T0602095D
CARTUS    Singapore    Cartus Corporation    T0602096B    T0602096B
CARTUS    Singapore    Cartus Corporation    T0602097J    T0602097J

CARTUS AND GLOBE DESIGN

(in series)

   Singapore    Cartus Corporation    T0603007J    T0603007J

CARTUS AND GLOBE DESIGN

(in series)

   Singapore    Cartus Corporation    T0603008I    T0603008I

CARTUS AND GLOBE DESIGN

(in series)

   Singapore    Cartus Corporation    T0603009G    T0603009G

 

II-5


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

CARTUS AND GLOBE DESIGN

(in series)

   Singapore    Cartus Corporation    T0603011I    T0603011I
CARTUS RESOURCES    Singapore    Cartus Corporation    T0602099G    T0602099G
CARTUS RESOURCES    Singapore    Cartus Corporation    T0602100D    T0602100D
CARTUS RESOURCES    Singapore    Cartus Corporation    T0602101B    T0602101B
GLOBE DESIGN (in series)    Singapore    Cartus Corporation    T0603003H    T0603003H
GLOBE DESIGN (in series)    Singapore    Cartus Corporation    T0603004F    T0603004F
GLOBE DESIGN (in series)    Singapore    Cartus Corporation    T0603005D    T0603005D
GLOBE DESIGN (in series)    Singapore    Cartus Corporation    T0603006B    T0603006B
Line & Dot Design**    Singapore    Cendant Mobility Services Corp    T0215464F    T0215464F
ONLY RELOCATION. ONLY PRIMACY (Series of 3)    Singapore    Primacy Relocation LLC*    T07/12892I    T07/12892I
ONLY RELOCATION. ONLY PRIMACY (Series of 3)    Singapore    Primacy Relocation LLC*    T07/12893G    T07/12893G
PRIMACY & Sunburst Logo (Series of 4)    Singapore    Primacy Relocation LLC*    T07/12878C    T07/12878C
PRIMACY & Sunburst Logo (Series of 4)    Singapore    Primacy Relocation LLC*    T07/12879A    T07/12879A
PRIMACY RELOCATION & Sunburst Logo (Series of 4)    Singapore    Primacy Relocation LLC*    T07/12883Z    T07/12883Z
PRIMACY RELOCATION & Sunburst Logo (Series of 4)    Singapore    Primacy Relocation LLC*    T07/12884H    T07/12884H
PRIMACY RELOCATION Stylized (Series of 4)    Singapore    Primacy Relocation LLC*    T07/12887B    T07/12887B
SHORTEN THE DISTANCE (Series of 4)    Singapore    Primacy Relocation LLC*    T07/12898H    T07/12898H
SHORTEN THE DISTANCE (Series of 4)    Singapore    Primacy Relocation LLC*    T07/12900C    T07/128900C
SUNBURST LOGO (series of 3)    Singapore    Primacy Relocation LLC*    T07/12869D    T07/12869D
SUNBURST LOGO (series of 3)    Singapore    Primacy Relocation LLC*    T07/12870H    T07/12870H
THE PRIMACY DIFFERENCE (Series of 2)    Singapore    Primacy Relocation LLC*    T07/12895C    T07/12895C
THE PRIMACY DIFFERENCE (Series of 2)    Singapore    Primacy Relocation LLC*    T07/12896A    T07/12896A
CARTUS    Switzerland    Cartus Corporation    54569/2010   
CARTUS AND GLOBE DESIGN    Switzerland    Cartus Corporation    54212/2010   

CARTUS AND GLOBE DESIGN

(in color)

   Switzerland    Cartus Corporation    54213/2010   
GLOBE DESIGN    Switzerland    Cartus Corporation    54216/2010   
GLOBE DESIGN (in color)    Switzerland    Cartus Corporation    54214/2010   
CARTUS    United Kingdom    Cartus Corporation    2412844    2412844

CARTUS AND GLOBE DESIGN

(in series)

   United Kingdom    Cartus Corporation    2414215    2414215
CARTUS RESOURCES    United Kingdom    Cartus Corporation    2412845    2412845

 

II-6


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

GLOBE DESIGN (in series)    United Kingdom    Cartus Corporation    2414216    2414216
HOME AND MOVE FROM CARTUS & Gate Design    United Kingdom    Cartus Corporation    2419497    2419497
WE MOVE THE PEOPLE WHO MOVE THE WORLD    United Kingdom    Cartus Corporation    2137549    2137549
CARTUS    United States    Cartus Corporation    78808792    3370574
CARTUS AND GLOBE DESIGN    United States    Cartus Corporation    78817923    3314369
CARTUS AND GLOBE DESIGN    United States    Cartus Corporation    78818045    3314372
CARTUS AND GLOBE DESIGN    United States    Cartus Corporation    78818064    3321204
CARTUS AND GLOBE DESIGN    United States    Cartus Corporation    78818082    3383108
EASYTOUR    United States    Cartus Corporation    78659865    3331185
GLOBALNET    United States    Cartus Corporation    75153284    2198869
GLOBE DESIGN    United States    Cartus Corporation    78817943    3314370
GLOBE DESIGN    United States    Cartus Corporation    78818047    3314373
GLOBE DESIGN    United States    Cartus Corporation    78818069    3321205
GLOBE DESIGN    United States    Cartus Corporation    78818087    3379520
GLOBE DESIGN (in color)    United States    Cartus Corporation    78817954    3314371
GLOBE DESIGN (in color)    United States    Cartus Corporation    78818055    3314374
GLOBE DESIGN (in color)    United States    Cartus Corporation    78818077    3321206
GLOBE DESIGN (in color)    United States    Cartus Corporation    78818090    3379521
HOME AND MOVE    United States    Cartus Corporation    78817256    3372957
HOME AND MOVE & Design    United States    Cartus Corporation    78817258    3372958
MEMBERMOVE    United States    Cartus Corporation    73748964    1554062
MILES FROM HOME    United States    Cartus Corporation    77790815    3792478
MILITARY RELOCATION MANAGEMENT Design    United States    Cartus Corporation    78044960    2757428
MOVEPLUS    United States    Cartus Corporation    85073868   
ONLY RELOCATION. ONLY PRIMACY    United States    Cartus Corporation    78577432    3060300
PRIMACY HOME LOANS & DEVICE    United States    Cartus Corporation    77457745    3579179
PRIMACY RELOCATION & DEVICE    United States    Cartus Corporation    75622523    2326003
PRIMACY RELOCATION (Stylized)    United States    Cartus Corporation    75622524    2345012
SHORTEN THE DISTANCE    United States    Cartus Corporation    76434346    2766508
SUNBURST LOGO    United States    Cartus Corporation    75622522    2316479
THE PRIMACY DIFFERENCE    United States    Cartus Corporation    76434348    2755619
WE MOVE THE PEOPLE WHO MOVE THE WORLD    United States    Cartus Corporation    75304946    2455642

 

II-7


* Primacy Relocation LLC was merged into Cartus Corporation as of December 31, 2010, and Cartus Corporation now owns all of Primacy’s marks. Recordal of that merger will be filed in due course.
** Cartus Corporation has determined that it is not using the designated marks, therefore it did not incur the costs to record the change of name against them – exceptions were made if recordal did not incur additional expense. They will be allowed to lapse without renewal.

CDRE TM LLC

Trademark Applications and Registrations

 

Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

A DIFFERENT KIND OF REAL ESTATE COMPANY    United States    CDRE TM LLC    75789598    2635982
CAPE COD STYLE    United States    CDRE TM LLC    76410655    2971401
CAPE COD STYLE    United States    CDRE TM LLC    76410657    2736246
CORCORAN    United States    CDRE TM LLC    75688924    2533288
CORCORAN    United States    CDRE TM LLC    77251976    3417729
CORCORAN WEXLER    United States    CDRE TM LLC    76315555    2576142
CORNERSTONES OF LIFE PROGRAM & Design    United States    CDRE TM LLC    77119473    3421531
CS and Interlocking Circles Design    United States    CDRE TM LLC    77287785    3418149
FS & Design    United States    CDRE TM LLC    73330013    1228982
FS FRED SANDS REALTORS & Design    United States    CDRE TM LLC    73330014    1228983
GREENWICHSTYLE    United States    CDRE TM LLC    77619262    3639386
IT’S ABOUT LIFE    United States    CDRE TM LLC    78280153    2973564
LEADING AGENTS, LEADING THE WAY    United States    CDRE TM LLC    77022828    3423467
LEAVE IT TO THE EXPERTS    United States    CDRE TM LLC    85201698   
LITCHFIELDCOUNTYSTYLE    United States    CDRE TM LLC    77619263    3639387
LIVE WHO YOU ARE    United States    CDRE TM LLC    78713347    3178618
LOCALINK    United States    CDRE TM LLC    78525869    3110476
MORE BROKER PER SQ FT    United States    CDRE TM LLC    77612078    3635209
NEWYORKCITYSTYLE    United States    CDRE TM LLC    77819231    3858479
OUR TOWN    United States    CDRE TM LLC    78449628    3094142
PREFERRED MOVES    United States    CDRE TM LLC    78871795    3398527
THE CORCORAN GROUP    United States    CDRE TM LLC    75689238    2366134
THE SUNSHINE GROUP LTD    United States    CDRE TM LLC    76408231    2768873
WESTCHESTERSTYLE    United States    CDRE TM LLC    77619264   
WWW.CORCORAN.COM    United States    CDRE TM LLC    75732288    2499454

CGRN Inc.

Trademark Applications and Registrations

 

II-8


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

CGRN    United States    CGRN Inc.    75540186    2466103
Stick Man Design    United States    CGRN Inc.    75673268    2332340

Sotheby’s International Realty Licensee LLC

Trademark Applications and Registrations

 

Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

RESIDE    European Community    Sotheby’s International Realty Licensee LLC    009324302   
ARTFULLY UNITING EXTRAORDINARY HOMES WITH EXTRAORDINARY LIVES    United States    Sotheby’s International Realty Licensee LLC    85028407   
DBL REALTORS - EXCEPTIONAL HOMES    United States    Sotheby’s International Realty Licensee LLC    76364261    2892353
DBL REALTORS DELIVERING MORE (Stylized)    United States    Sotheby’s International Realty Licensee LLC    76298683    2892287
FOR THE ONGOING COLLECTION OF LIFE    United States    Sotheby’s International Realty Licensee LLC    78490698    3069400
RESIDE    United States    Sotheby’s International Realty Licensee LLC    77089845    3415244

Title Resource Group LLC

Trademark Applications and Registrations

 

Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

CENSTAR    United States    Title Resource Group LLC    78439772    3213898
Circle Logo (TRG)    United States    Title Resource Group LLC    78869716    3293882
Circle Logo (TRG)    United States    Title Resource Group LLC    78869726    3279724
COUNT ON OUR EXCELLENCE    United States    Title Resource Group LLC    78783827    3532528
DON’T SETTLE FOR COMPLICATED, SETTLE FOR CONVENIENCE    United States    Title Resource Group LLC    78484489    3262070
GATEWAY SETTLEMENT SERVICES & Design    United States    Title Resource Group LLC    78768106    3224478
IN HOUSE    United States    Title Resource Group LLC    78626295    3607601
L LANDWAY SETTLEMENT SERVICES & Design    United States    Title Resource Group LLC    78815007    3219806
LAKECREST RELOCATION SERVICES    United States    Title Resource Group LLC    85172501   
LAKECREST RELOCATION SERVICES & Design    United States    Title Resource Group LLC    85172504   

 

II-9


MAKING HOUSES INTO HOMES    United States    Title Resource Group LLC    78466961    3288623
MARDAN SETTLEMENT SERVICES & Design    United States    Title Resource Group LLC    78814998    3282646
SHORT TRAC    United States    Title Resource Group LLC    85090682   
SHORT TRAC & House Design    United States    Title Resource Group LLC    85090690   
SHORT TRAC House Design    United States    Title Resource Group LLC    85090665   
SINGLE SOLUTION    United States    Title Resource Group LLC    77548999    3597988
SOUTHERN EQUITY SERVICES & Design    United States    Title Resource Group LLC    78815000    3219805

Century 21 Real Estate LLC

Trademark Applications and Registrations

 

Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21    Century 21 Real Estate LLC    African Union Territories (OAPI)    3200601329    54333
CENTURY 21    Century 21 Real Estate LLC    African Union Territories (OAPI)    3200601330    54334
CENTURY 21 & New House Design    Century 21 Real Estate LLC    African Union Territories (OAPI)    54335    54335
CENTURY 21 & New House Design    Century 21 Real Estate LLC    African Union Territories (OAPI)    54336    54336
CENTURY 21    Century 21 Real Estate LLC    Albania    AL/T/2007/475    11869
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Albania    AL/T/2007/476    11880
CENTURY 21    Century 21 Real Estate LLC    Algeria    052378    72968
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Algeria    052379    72969
CENTURY 21    Century 21 Real Estate LLC    Angola    17686   
CENTURY 21    Century 21 Real Estate LLC    Angola    17687   
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Angola    17688   
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Angola    17689   
CENTURY 21    Century 21 Real Estate LLC    Anguilla       2706
CENTURY 21    Century 21 Real Estate LLC    Anguilla       4386
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Anguilla       4387
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Anguilla       4388
CENTURY 21    Century 21 Real Estate LLC    Antigua and Barbuda    99232064    7004
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Antigua and Barbuda    99232065    7005
CENTURY 21    Century 21 Real Estate LLC    Argentina    1789489    1939876
CENTURY 21    Century 21 Real Estate LLC    Argentina    1789490    1939877
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Argentina    1793605    1940048

 

II-10


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21 & New House Design    Century 21 Real Estate LLC    Argentina    1793606    1940040
SIGLO 21    Century 21 Real Estate LLC    Argentina    3005173   
CENTURY 21    Century 21 Real Estate LLC    Aruba    89051914    14483
CENTURION    Century 21 Real Estate LLC    Australia    559492    559492
CENTURY 21    Century 21 Real Estate LLC    Australia    326586    326586
CENTURY 21    Century 21 Real Estate LLC    Australia    491233    491233
CENTURY 21    Century 21 Real Estate LLC    Australia    491234    491234

CENTURY 21 & New House &

Sign Design (Series of 2)

   Century 21 Real Estate LLC    Australia    554728    554728
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Australia    542303    542303
CENTURY 21 & Old House & Sign Design    Century 21 Real Estate LLC    Australia    428138    428138
CENTURY 21 & Sign & Post Design (Series of 2)    Century 21 Real Estate LLC    Australia    554730    554730
THE WORLD IS SOLD ON CENTURY 21    Century 21 Real Estate LLC    Australia    1050167    1050167
CENTURY 21    Century 21 Real Estate LLC    Austria    AM 2269/75    81547
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Austria    AM 5860/90    136271
CENTURY 21    Century 21 Real Estate LLC    Azerbaijan    20060373    20070412
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Azerbaijan    20060374    20070411
CENTURY 21    Century 21 Real Estate LLC    Bahamas    8282    8282
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Bahamas    14542    14542
CENTURY 21    Century 21 Real Estate LLC    Bahrain    422/89    12537
CENTURY 21    Century 21 Real Estate LLC    Bahrain    423/89    706
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Bahrain    387/91    884
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Bahrain    424/89    12538
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Bahrain    425/89    707
CENTURY 21    Century 21 Real Estate LLC    Bangladesh    122234   
CENTURY 21    Century 21 Real Estate LLC    Bangladesh    122235   
CENTURY 21 & New Pitched Roof House Design    Century 21 Real Estate LLC    Bangladesh    122232   
CENTURY 21 & New Pitched Roof House Design    Century 21 Real Estate LLC    Bangladesh    122236   
CENTURY 21    Century 21 Real Estate LLC    Barbados       81/534
CENTURY 21    Century 21 Real Estate LLC    Barbados       81/490
CENTURY 21    Century 21 Real Estate LLC    Barbados       81/6593
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Barbados       81/6249
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Barbados       81/6594

 

II-11


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21    Century 21 Real Estate LLC    Belize    1724.03    1724.03
CENTURY 21    Century 21 Real Estate LLC    Belize    6234    6234
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Belize    1725.03    1725.03
SIGLO 21    Century 21 Real Estate LLC    Belize    1723.03    1723.03
CENTURION    Century 21 Real Estate LLC    Benelux    766104    497239
CENTURY 21    Century 21 Real Estate LLC    Benelux    34606    335022
CENTURY 21    Century 21 Real Estate LLC    Benelux    691728    151437
CENTURY 21    Century 21 Real Estate LLC    Benelux    834723    556946
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Benelux    755505    487878
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Benelux    834724    556947
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Benelux    774593    508016
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    Benelux    774594    508017
EEUW 21    Century 21 Real Estate LLC    Benelux    739532    475269
SIECLE 21    Century 21 Real Estate LLC    Benelux    739533    475270
CENTURY 21    Century 21 Real Estate LLC    Bermuda    7935    7935
CENTURY 21    Century 21 Real Estate LLC    Bermuda    42240    42240
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Bermuda    21330    21330
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Bermuda    42241    42241
CENTURY 21    Century 21 Real Estate LLC    Bolivia    146214    73319
CENTURY 21    Century 21 Real Estate LLC    Bolivia    146214    73320
CENTURY 21    Century 21 Real Estate LLC    Bolivia    146214    73321
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Bolivia    146214    73318
SIGLO 21    Century 21 Real Estate LLC    Bolivia    2541921    75829
CENTURY 21    Century 21 Real Estate LLC    Bosnia and Herzegovina    BAZ069892A    BAZ069892
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Bosnia and Herzegovina    BAZ069891A    BAZ069891
CENTURY 21    Century 21 Real Estate LLC    Brazil    10882/79    7201044
CENTURY 21    Century 21 Real Estate LLC    Brazil    26404/75    7061021
CENTURY 21    Century 21 Real Estate LLC    Brazil    817906088    817906088
CENTURY 21    Century 21 Real Estate LLC    Brazil    817906096    817906096
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Brazil    815817355    815817355
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Brazil    815818670    815818670
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Brazil    817906100    817906100
SECULO 21    Coldwell Banker LLC    Brazil    820707775    820707775
SECULO 21    Century 21 Real Estate LLC    Brazil    820829749    820829749
CENTURY 21    Century 21 Real Estate Corp    Brunei Darussalam    35586    35586

 

II-12


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21 & New House Design    Century 21 Real Estate Corp    Brunei Darussalam    35588    35588
CENTURY 21    Century 21 Real Estate LLC    Bulgaria    12207    18876
CENTURY 21    Century 21 Real Estate LLC    Bulgaria    12208    1675
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Bulgaria    67145    52033
AD/PAC    Century 21 Real Estate LLC    Canada    476194    286901
CENTURY 21    Century 21 Real Estate LLC    Canada    417509    233529
CENTURY 21    Century 21 Real Estate LLC    Canada    587710    368747
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Canada    673854    401397
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Canada    673857    397606
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Canada    673859    397607
CENTURY 21 & Old Design    Century 21 Real Estate LLC    Canada    587712    368748
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Canada    673855    400535
CENTURY 21 & Sign & Post Design (Color)    Century 21 Real Estate LLC    Canada    673856    400536
CENTURY 21 CONNECTIONS GUICHET UNIQUE VALUER AJOUTEE & Design    Century 21 Real Estate LLC    Canada    1080726    595238
CENTURY 21 CONNECTIONS REAL CONVENIENCE REAL VALUE & Design    Century 21 Real Estate LLC    Canada    1027978    587032
CENTURY 21 Sign & Post Design (Gold & Black)    Century 21 Real Estate LLC    Canada    673852    397605
CENTURY 21 Sign & Post Design (Gold & Brown)    Century 21 Real Estate LLC    Canada    424313    260388
CENTURY 21 SignPost Design (Gold)    Century 21 Real Estate LLC    Canada    1179262    605650
CREATE 21    Century 21 Real Estate LLC    Canada    1234772    699134
NORTH AMERICA’S NUMBER 1 TOP SELLER, CENTURY 21    Century 21 Real Estate LLC    Canada    462978    274562
SHOWCASE 21    Century 21 Real Estate LLC    Canada    1345086    712903
THE REAL ESTATE INVESTMENT JOURNAL    Century 21 Real Estate LLC    Canada    476195    292131
VIP    Century 21 Real Estate LLC    Canada    476192    276212
CENTURY 21    Century 21 Real Estate LLC    Cape Verde      
CENTURY 21    Century 21 Real Estate LLC    Cape Verde      
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Cape Verde      
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Cape Verde      
CENTURY 21    Century 21 Real Estate LLC    Cayman Islands       1062225
CENTURY 21    Century 21 Real Estate LLC    Cayman Islands       1274764

 

II-13


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21    Century 21 Real Estate LLC    Cayman Islands       1274765
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Cayman Islands       1453969
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Cayman Islands       1459099
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    Cayman Islands       1459101
CENTURY 21    Century 21 Real Estate LLC    Chile    299472    760388
CENTURY 21    Century 21 Real Estate LLC    Chile    299473    604353
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Chile    272613    611278
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Chile    272614    611277
century21.cl    Century 21 Real Estate LLC    Chile      
siglo21inmobiliaria.cl    Century 21 Real Estate LLC    Chile      
CENTURY 21    Century 21 Real Estate LLC    China (People’s Republic)    8924591    523152
CENTURY 21    Century 21 Real Estate LLC    China (People’s Republic)    93094145    777124
CENTURY 21 & New House Design    Century 21 Real Estate LLC    China (People’s Republic)       3065318
CENTURY 21 & New House Design    Century 21 Real Estate LLC    China (People’s Republic)       3065316
CENTURY 21 & New House Design    Century 21 Real Estate LLC    China (People’s Republic)    90053105    577417
CENTURY 21 & New House Design    Century 21 Real Estate LLC    China (People’s Republic)    93094136    777122
CENTURY 21 & New House Design (with Chinese)    Century 21 Real Estate LLC    China (People’s Republic)    2000055326    1672792
CENTURY 21 & New House Design (with Chinese)    Century 21 Real Estate LLC    China (People’s Republic)    2000055327    1647735
CENTURY 21 & New House Design (with Chinese)    Century 21 Real Estate LLC    China (People’s Republic)    2000085135    1655868
CENTURY 21 & New House Design (with Chinese)    Century 21 Real Estate LLC    China (People’s Republic)    2000085849    1699741
CENTURY 21 & New House Design (with Chinese)    Century 21 Real Estate LLC    China (People’s Republic)    2000085850    1651932
CENTURY 21 & New Pitched Roof House Design    Century 21 Real Estate LLC    China (People’s Republic)    6950881    6950881
CENTURY 21 & New Pitched Roof House Design    Century 21 Real Estate LLC    China (People’s Republic)    6950882   
CENTURY 21 (in Chinese)    Century 21 Real Estate LLC    China (People’s Republic)       3501579
CENTURY 21 (Stylized) with COMMERCIAL in Chinese Characters    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 (Stylized) with COMMERCIAL in Chinese Characters    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 (Stylized) with COMMERCIAL in Chinese Characters    Century 21 Real Estate LLC    China (People’s Republic)      

 

II-14


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21 (Stylized) with COMMERCIAL in Chinese Characters    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 (Stylized) with COMMERCIAL in Chinese Characters    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 COMMERCIAL    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 COMMERCIAL    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 COMMERCIAL    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 COMMERCIAL    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 COMMERCIAL    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 COMMERCIAL (Stylized)    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 COMMERCIAL (Stylized)    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 COMMERCIAL (Stylized)    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 COMMERCIAL (Stylized)    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 COMMERCIAL (Stylized)    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 COMMERCIAL in Chinese Characters    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 COMMERCIAL in Chinese Characters    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 COMMERCIAL in Chinese Characters    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 COMMERCIAL in Chinese Characters    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 21 COMMERCIAL in Chinese Characters    Century 21 Real Estate LLC    China (People’s Republic)      
CENTURY 22    Century 21 Real Estate LLC    China (People’s Republic)    3894723   
CENTURY 22    Century 21 Real Estate LLC    China (People’s Republic)    3894724   
CENTURY 22    Century 21 Real Estate LLC    China (People’s Republic)    3894725    3894725
CENTURY 21    Century 21 Real Estate LLC    Colombia    306032    141915
CENTURY 21    Century 21 Real Estate LLC    Colombia    306033    141916
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Colombia    97069262    211360
CENTURY 21 & Old Design    Century 21 Real Estate LLC    Colombia    306054    141917

 

II-15


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21 & Old Design    Century 21 Real Estate LLC    Colombia    306055    141918
SIGLO 21    Century 21 Real Estate LLC    Colombia    98022229    214489
CENTURY 21    Century 21 Real Estate LLC    Costa Rica    72248    72248
CENTURY 21    Century 21 Real Estate LLC    Costa Rica    72530    72530
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Costa Rica    77838    77838
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Costa Rica    78188    78188
SIGLO 21    Century 21 Real Estate LLC    Costa Rica    111092    111092
CENTURY 21    Century 21 Real Estate LLC    Croatia    Z20060597A    Z20060597
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Croatia    Z20060598A    Z20060598
CENTURY 21    Century 21 Real Estate LLC    Cyprus, Republic of    30846    30846
CENTURY 21    Century 21 Real Estate LLC    Cyprus, Republic of    33210    33210
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Cyprus, Republic of    30847    30847
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Cyprus, Republic of    33209    33209
CENTURY 21    Century 21 Real Estate LLC    Czech Republic    170452    170452
21 ARHUNDREDE    Century 21 Real Estate LLC    Denmark    00080    08796
CENTURY 21    Century 21 Real Estate LLC    Denmark    04211    00100
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Denmark    08959    07414
CENTURY 21    Century 21 Real Estate LLC    Dominica    1/89    1/89
CENTURY 21    Century 21 Real Estate LLC    Dominican Republic    41404    41404
CENTURY 21    Century 21 Real Estate LLC    Dominican Republic    41405    41405
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Dominican Republic    34822    34822
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Dominican Republic    60133    60133
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Dominican Republic    60153    60153
CENTURY 21    Century 21 Real Estate LLC    Ecuador    61730    5592
CENTURY 21    Century 21 Real Estate LLC    Ecuador    61731    5593
CENTURY 21    Century 21 Real Estate LLC    Ecuador    61732    5916
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Ecuador    57790    5591
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Ecuador    57791    5986
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Ecuador    57792    5987
SIGLO 21    Century 21 Real Estate LLC    Ecuador    86.879    4846-10
CENTURY 21    Century 21 Real Estate LLC    Egypt    74584    74584
CENTURY 21    Century 21 Real Estate LLC    Egypt    249810   
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Egypt    78959    78959
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Egypt    78960    78960

 

II-16


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21    Century 21 Real Estate Corp    El Salvador       112 book 6
CENTURY 21    Century 21 Real Estate LLC    El Salvador    1596-98    58 book 95
CENTURY 21 & New House Design    Century 21 Real Estate Corp    El Salvador       18 book 10
CENTURY 21 & New House Design    Century 21 Real Estate LLC    El Salvador       10 book 23
SIGLO 21    Century 21 Real Estate LLC    El Salvador    E-1599-98    146 book 93
CENTURY 21    Century 21 Real Estate LLC    Estonia    2226    7566
21 ARHUNDREDE    Century 21 Real Estate LLC    European Community    146746    146746
21OS AIUN    Century 21 Real Estate LLC    European Community    146589    146589
AD/PAC    Century 21 Real Estate LLC    European Community    146787    146787
ARHUNDRADE 21    Century 21 Real Estate LLC    European Community    146415    146415
CENTURION    Century 21 Real Estate LLC    European Community    146316    146316
CENTURY 21    Century 21 Real Estate LLC    European Community    146068    146068
CENTURY 21 & New House Design    Century 21 Real Estate LLC    European Community    146357    146357
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    European Community    146258    146258
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    European Community    146191    146191
CENTURY 21 2 & 1    Century 21 Real Estate LLC    European Community    146761    146761
CENTURY 21 COMMERCIAL    Century 21 Real Estate LLC    European Community    009601121   
CENTURY 21 COMMERCIAL (Stylized)    Century 21 Real Estate LLC    European Community    009601238   
CENTURY 21 GESTION    Century 21 Real Estate LLC    European Community    146332    146332
KIOSQUE 21    Century 21 Real Estate LLC    European Community    146233    146233
SECOLO 21    Century 21 Real Estate LLC    European Community    146555    146555
SECULO 21    Century 21 Real Estate LLC    European Community    146522    146522
SEKEL 21    Century 21 Real Estate LLC    European Community    146472    146472
SIECLE 21    Century 21 Real Estate LLC    European Community    146720    146720
SIGLO 21    Century 21 Real Estate LLC    European Community    146449    146449
VIP    Century 21 Real Estate LLC    European Community    146142    146142
VOISISATA 21    Century 21 Real Estate LLC    European Community    146373    146373
CENTURY 21    Century 21 Real Estate Corp    Fiji    20423    20423
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Fiji    160/06   
CENTURY 21 & Old Design    Century 21 Real Estate Corp    Fiji    20424    20424
CENTURY 21    Century 21 Real Estate LLC    Finland    3976/75    72169
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Finland    4832/90    117908
VUOSISATA 21    Century 21 Real Estate LLC    Finland    5820/89    124952
CENTURION    Century 21 Real Estate LLC    France    300135    1682705
CENTURY 21    Century 21 Real Estate LLC    France    841807    1399704
CENTURY 21 & New House Design    Century 21 Real Estate LLC    France    239193    1617044
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    France    063454990    063454990

 

II-17


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21 & Sign Design    Century 21 Real Estate LLC    France    063454991    063454991
CENTURY 21 GESTION    Century 21 Real Estate LLC    France    476409    93476409
CENTURY 21 IMMOBILIER D’ENTREPRISE & Design    Century 21 Real Estate LLC    France    99775039    99775039
KIOSQUE 21    Century 21 Real Estate LLC    France       94516614
SIECLE 21    Century 21 Real Estate LLC    France    166203    1636431
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Gaza District    5126    5126
CENTURY 21 (in English & Arabic)    Century 21 Real Estate LLC    Gaza District    5127    5127
CENTURY 21    Century 21 Real Estate LLC    Georgia    58691/03   
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Georgia    58692/03   
CENTURY 21    Century 21 Real Estate LLC    Germany    27704/36    992054
CENTURY 21    Century 21 Real Estate LLC    Germany    25330/16    976127
CENTURY 21    Century 21 Real Estate LLC    Germany    65907/16    653579
CENTURY 21    Century 21 Real Estate LLC    Germany    659777/36   
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Germany    41001/36    1184574
CENTURY 21    Century 21 Real Estate LLC    Ghana      
CENTURY 21    Century 21 Real Estate LLC    Ghana      
CENTURY 21 & New Pitched Roof House Design    Century 21 Real Estate LLC    Ghana    001971/2008   
CENTURY 21 & New Pitched Roof House Design    Century 21 Real Estate LLC    Ghana    001985/2008   
CENTURY 21    Century 21 Real Estate LLC    Greece    55558    55558
CENTURY 21    Century 21 Real Estate LLC    Greece    111125    111125
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Greece    111062    111062
CENTURY 21    Century 21 Real Estate LLC    Grenada       90/1998
CENTURY 21    Century 21 Real Estate LLC    Grenada       91/1998
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Grenada       84/1998
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Grenada       85/1998
CENTURY 21    Century 21 Real Estate LLC    Guatemala    002722    121727
CENTURY 21    Century 21 Real Estate LLC    Guatemala    002723    121356
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Guatemala    04974    66514
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Guatemala    4975    64944
SIGLO 21    Century 21 Real Estate LLC    Guatemala    2783    104939
CENTURY 21    Century 21 Real Estate LLC    Guyana    16553A    16553A
CENTURY 21 & Design    Century 21 Real Estate LLC    Guyana    16552A    16552A
CENTURY 21    Century 21 Real Estate LLC    Haiti    179-149    179-149
CENTURY 21    Century 21 Real Estate LLC    Haiti    227-87    289-126
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Haiti    233-99    374-140

 

II-18


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21 & New House Design    Century 21 Real Estate LLC    Haiti    234-99    375-140
CENTURY 21    Century 21 Real Estate LLC    Honduras    5393-89    941
CENTURY 21    Century 21 Real Estate LLC    Honduras    5408-89    52329
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Honduras    3616/91    1210
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Honduras    3617/91    55034
SIGLO 21    Century 21 Real Estate LLC    Honduras    3757/98    5064
CENTURION    Century 21 Real Estate LLC    Hong Kong    5513/1992    7743/1995
CENTURION    Century 21 Real Estate LLC    Hong Kong    5898/1992    4807/1993
CENTURION    Century 21 Real Estate LLC    Hong Kong    7146/1991    599/1993
CENTURY (in Chinese characters)    Century 21 Real Estate LLC    Hong Kong    300698086    300698086
CENTURY (in series)    Century 21 Real Estate LLC    Hong Kong    300698077    300698077
CENTURY 21    Century 21 Real Estate LLC    Hong Kong    4567/1993    B6914/1996
CENTURY 21    Century 21 Real Estate LLC    Hong Kong    5830/1992    B602/1995
CENTURY 21    Century 21 Real Estate LLC    Hong Kong    6197/1988    2843/1992
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Hong Kong    4565/1993    B8023/1996
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Hong Kong    5831/1992    B603/1995
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Hong Kong    6196/1988    2842/1992
CENTURY 21 & New House Design (with Chinese)    Century 21 Real Estate LLC    Hong Kong    11943/1993    B3447/1997
CENTURY 21 & New House Design (with Chinese)    Century 21 Real Estate LLC    Hong Kong    11944/1993    B3448/1997
CENTURY 21 & New House Design (with Chinese)    Century 21 Real Estate LLC    Hong Kong    11945/1993    B3449/1997
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Hong Kong    114/1992    B5441/1994
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    Hong Kong    115/1992    B2683/1995
CENTURY 21 (in Chinese)    Century 21 Real Estate LLC    Hong Kong    6503/1988    B601/1995
CENTURY 21 (in Chinese)    Century 21 Real Estate LLC    Hong Kong    10475/1993    B3446/1997
CENTURY 21 VIP    Century 21 Real Estate LLC    Hong Kong    10476/1993    B8068/1997
VIP    Century 21 Real Estate LLC    Hong Kong    5424/1992    1903/1995
VIP    Century 21 Real Estate LLC    Hong Kong    7150/1991    5017/1994
CENTURY 21    Century 21 Real Estate LLC    Hungary    46/90    138029
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Hungary    M1001345   
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Hungary    3647/90    139852
CENTURY 21    Century 21 Real Estate LLC    Iceland    172/1989    199/1991
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Iceland    173/1989    380/1991
OLDIN 21    Century 21 Real Estate LLC    Iceland    11/1990    203/1991
OLDIN 21    Century 21 Real Estate LLC    Iceland    789/1990    80/1991

 

II-19


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21    Century 21 Real Estate LLC    India    506834    506834
CENTURY 21    Century 21 Real Estate LLC    India    1359561   
CENTURY 21 & New House Design    Century 21 Real Estate LLC    India    506833    506833
CENTURY 21 & New House Design    Century 21 Real Estate LLC    India    1359563   
CENTURY 21 INDIA    Century 21 Real Estate LLC    India    1775850   
CENTURY 21 INDIA & New House Design    Century 21 Real Estate LLC    India    1775849   
CENTURY 21 INDIA & New House Design (in Hindi)    Century 21 Real Estate LLC    India    1775848   
CENTURY 21    Century 21 Real Estate LLC    Indonesia       488535
CENTURY 21    Century 21 Real Estate LLC    Indonesia       IDM000077182
CENTURY 21    Century 21 Real Estate LLC    Indonesia       488202
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Indonesia       IDM000077183
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Indonesia       488203
CENTURION    Century 21 Real Estate LLC    Ireland    3402    150073
CENTURION    Century 21 Real Estate LLC    Ireland    4702    150608
CENTURY 21    Century 21 Real Estate LLC    Ireland    2700    088749
CENTURY 21    Century 21 Real Estate LLC    Ireland    4088    201312
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Ireland    4090    201423
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Ireland    6690    142535
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Ireland    0857    151789
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    Ireland    0858    151790
CENTURY 21    Century 21 Real Estate LLC    Israel    46053    46053
CENTURY 21    Century 21 Real Estate LLC    Israel    46054    46054
CENTURY 21    Century 21 Real Estate LLC    Israel    85988    85988
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Israel    78817    78817
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Israel    78818    78818
CENTURY 21 (in Hebrew)    Century 21 Real Estate LLC    Israel    74955    74955
CENTURY 21 (in Hebrew)    Century 21 Real Estate LLC    Israel    74956    74956
CENTURY 21    Century 21 Real Estate LLC    Italy    MI2010C008748   
CENTURY 21    Century 21 Real Estate LLC    Italy    34978/75    731278
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Italy    MI2010C008750   
CENTURY 21 & New House Design    Century 21 Real Estate Corp    Italy    26645C/90    920518
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Italy    92C000632    977859
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    Italy    92C000633    977858

 

II-20


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

SECOLO 21    Century 21 Real Estate Corp    Italy    98C000928    836806
SECOLO 21    Century 21 Real Estate LLC    Italy    38699C/90    897493
CENTURY 21    Century 21 Real Estate Corp    Jamaica       B19093
CENTURY 21    Century 21 Real Estate Corp    Jamaica    41296    41296
CENTURY 21 & Design    Century 21 Real Estate Corp    Jamaica    16/1470    25542
CENTURY 21    Century 21 Real Estate LLC    Japan    76430    5175544
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Japan    76429/2007    5115017
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Japan    83473/2007    5172405
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Japan    241187/92    3158940
CENTURY 21 FINE HOMES & ESTATES    Century 21 Real Estate LLC    Japan    20466    5192572
CENTURY 21 FINE HOMES & ESTATES & New Gate Design 2008    Century 21 Real Estate LLC    Japan    20467    5192573
CENTURY 21 HOME in Katakana    Century 21 Real Estate LLC    Japan    168212/97    4253681
CENTURY 21 HOUSING in Katakana    Century 21 Real Estate LLC    Japan    168213/97    4253682
CENTURY 21 IMPORT HOME in Katakana    Century 21 Real Estate LLC    Japan    168215/97    4303578
CENTURY 21 IMPORT HOUSE in Katakana    Century 21 Real Estate LLC    Japan    168211/97    4303576
CENTURY 21 IMPORT HOUSE in Katakana    Century 21 Real Estate LLC    Japan    168214/97    4303577
CENTURY 21 in Katakana    Century 21 Real Estate LLC    Japan    241188/92    3202692
CENTURY 21 MY HOME AUCTION (in Katakana)    Century 21 Real Estate LLC    Japan    82130/00    4547714
CENTURY 21 REAL ESTATE    Century 21 Real Estate LLC    Japan    979/84    1854786
CENTURY 21 REAL ESTATE AUCTION (in Japanese)    Century 21 Real Estate LLC    Japan    82131/00    4511522
CENTURY 21 REAL ESTATE CORPORATION & Design    Century 21 Real Estate LLC    Japan    111178/90    2691387
CENTURY 21 REAL ESTATE in Katakana    Century 21 Real Estate LLC    Japan    11558/90    2476784
CENTURY 21 Sign & Post Design    Century 21 Real Estate LLC    Japan    42404/91    2696263
CENTURY 21 Sign Design    Century 21 Real Estate LLC    Japan    42405/91    2696264
CENTURY 22    Century 21 Real Estate LLC    Japan    162372/97    4693536
CLUBCENTURION (with Katakana)    Century 21 Real Estate LLC    Japan    10977/99    4405634
CENTURY 21    Century 21 Real Estate LLC    Jordan    83335    83335
CENTURY 21    Century 21 Real Estate LLC    Jordan    83595    83595
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Jordan    83576    83576

 

II-21


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21 & New House Design    Century 21 Real Estate LLC    Jordan    83644    83644
CENTURY 21    Century 21 Real Estate LLC    Kazakhstan    33108    22498
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Kazakhstan    33109    22499
CENTURY 21 & New House Design (in Kazakh)    Century 21 Real Estate LLC    Kazakhstan    34554    23514
CENTURY 21 & New House Design (in Cyrillic)    Century 21 Real Estate LLC    Kazakhstan    34845    23938
CENTURY 21 (in Cyrillic)    Century 21 Real Estate LLC    Kazakhstan    34846    24069
CENTURY 21 (in Kazakh)    Century 21 Real Estate LLC    Kazakhstan    34555    23515
CENTURY 21 COMMERCIAL & Design    Century 21 Real Estate LLC    Kazakhstan    40134    28042
CENTURY 21 COMMERCIAL & Design (in Cyrillic)    Century 21 Real Estate LLC    Kazakhstan    40136    28044
CENTURY 21 FINE HOMES & ESTATES & New Gate Design    Century 21 Real Estate LLC    Kazakhstan    40133    28041
CENTURY 21 FINE HOMES & ESTATES & New Gate Design (in Cyrillic)    Century 21 Real Estate LLC    Kazakhstan    40135    28043
CENTURY 21    Century 21 Real Estate LLC    Kenya    0191    0191
CENTURY 21    Century 21 Real Estate LLC    Kenya    36999    36999
CENTURY 21    Century 21 Real Estate LLC    Kenya    64626    64626
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Kenya    0192    0192
CENTURY 21 & New Pitched Roof House Design    Century 21 Real Estate LLC    Kenya    64625    64625
CENTURY 21    Century 21 Real Estate LLC    Korea, Republic of    1984-15644    117926
CENTURY 21    Century 21 Real Estate LLC    Korea, Republic of    1984-1027    5370
CENTURY 21 & New House Design (with Korean)    Century 21 Real Estate LLC    Korea, Republic of    2000-15614    72575
CENTURY 21    Century 21 Real Estate LLC    Kosovo    6772    1363
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Kosovo    7285    1561
CENTURY 21    Century 21 Real Estate LLC    Kuwait    33326    30493
CENTURY 21    Century 21 Real Estate LLC    Kuwait    33327    30494
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Kuwait    33328    30497
CENTURY 21    Century 21 Real Estate LLC    Latvia    M-92-1273    M10874
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Latvia    M-02-1615    M51933
CENTURY 21    Century 21 Real Estate Corp    Lebanon    244649/490    53458
CENTURY 21    Century 21 Real Estate Corp    Lebanon    182665/7    105819
CENTURY 21 & New House Design    Century 21 Real Estate Corp    Lebanon    142171/285    105801
CENTURY 21 & New House Design    Century 21 Real Estate Corp    Lebanon    182665/6    105820

 

II-22


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21 & Old Design    Century 21 Real Estate Corp    Lebanon    244649/490    53459
CENTURY 21    Century 21 Real Estate LLC    Liberia       00067/2006
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Liberia       00068/2006
CENTURY 21    Century 21 Real Estate LLC    Libya    17338   
CENTURY 21    Century 21 Real Estate LLC    Libya    17341   
CENTURY 21 & New Pitched Roof House Design    Century 21 Real Estate LLC    Libya    17339   
CENTURY 21 & New Pitched Roof House Design    Century 21 Real Estate LLC    Libya    17340   
CENTURY 21    Century 21 Real Estate LLC    Lithuania    4512    7971
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Lithuania    4514    21930
CENTURY 21    Century 21 Real Estate LLC    Macau    12657 M    12657 M
CENTURY 21    Century 21 Real Estate LLC    Macau    12658 M    12658 M
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Macau    12659 M    12659 M
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Macau    12660 M    12660 M
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Macau    12662 M    12662 M
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Macau    12663 M    12663 M
CENTURY 21    Century 21 Real Estate LLC    Macedonia    2005/862    13234
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Macedonia    2005/863    13233
CENTURION    Century 21 Real Estate LLC    Malaysia    9201794    9201794
CENTURION    Century 21 Real Estate LLC    Malaysia    97018284    97018284
CENTURION    Century 21 Real Estate LLC    Malaysia    97018285    97018285
CENTURY 21    Century 21 Real Estate LLC    Malaysia    8804830    8804830
CENTURY 21    Century 21 Real Estate LLC    Malaysia    98001032    98001032
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Malaysia    8804829    8804829
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Malaysia    98001033    98001033
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Malaysia    91001718    91001718
CENTURY 21 Sign & Post (color)    Century 21 Real Estate LLC    Malaysia    91004500    91004500
CENTURY 21 Sign Design    Century 21 Real Estate LLC    Malaysia    91001717    91001717
CENTURY 21 Sign Design (color)    Century 21 Real Estate LLC    Malaysia    9103818    9103818
CENTURY 21    Century 21 Real Estate LLC    Malta    20260    20260
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Malta    20261    20261
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Malta    20398    20398
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    Malta    20399    20399
CENTURY 21    Century 21 Real Estate LLC    Mauritius    MU/M/08/08584    07385/2009

 

II-23


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21 & New Pitched Roof House Design    Century 21 Real Estate LLC    Mauritius    MU/M/08/08585    07386/2009
CASA ABIERTA    Century 21 Real Estate LLC    Mexico    154195    483652
CENTURION    Century 21 Real Estate LLC    Mexico    119465    483935
CENTURION    Century 21 Real Estate LLC    Mexico    119467    422142
CENTURY 21    Century 21 Real Estate LLC    Mexico    47531    434652
CENTURY 21    Century 21 Real Estate LLC    Mexico    52724    360990
CENTURY 21    Century 21 Real Estate LLC    Mexico    52726    360991
CENTURY 21    Century 21 Real Estate LLC    Mexico    52727    360992
CENTURY 21    Century 21 Real Estate LLC    Mexico    52728    360993
CENTURY 21    Century 21 Real Estate LLC    Mexico    77331    388000
CENTURY 21    Century 21 Real Estate LLC    Mexico    117459    849730
CENTURY 21    Century 21 Real Estate LLC    Mexico    117471    527091
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Mexico    97783    435000
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Mexico    117455    454485
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Mexico    117466    478179
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Mexico    117479    422506
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Mexico    107933    403696
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Mexico    117470    420317
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Mexico    117473    423754
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    Mexico    117467    420316
CENTURY 21 HOME IMPROVEMENTS    Century 21 Real Estate LLC    Mexico    247361    524430
CENTURY 21 HOME IMPROVEMENTS    Century 21 Real Estate LLC    Mexico    247362    549869
CENTURY 21 HOME IMPROVEMENTS    Century 21 Real Estate LLC    Mexico    247363    546079
CENTURY 21 HOME IMPROVEMENTS    Century 21 Real Estate LLC    Mexico    247364    524431
CENTURY 21 HOME IMPROVEMENTS    Century 21 Real Estate LLC    Mexico    247365    524432
CENTURY 21 HOME IMPROVEMENTS    Century 21 Real Estate LLC    Mexico    247367    612100
CENTURY 21 HOME IMPROVEMENTS    Century 21 Real Estate LLC    Mexico    247368    524433
PONGA SU CONFIANZA EN EL NUMERO UNO    Century 21 Real Estate LLC    Mexico    119468    410948
PONGA SU CONFIANZA EN EL NUMERO UNO    Century 21 Real Estate LLC    Mexico    119469    410949
SIGLO 21    Century 21 Real Estate LLC    Mexico    52725    507194
SIGLO 21    Century 21 Real Estate LLC    Mexico    117454    841573

 

II-24


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

SIGLO 21    Century 21 Real Estate LLC    Mexico    117465    659818
SIGLO 21    Century 21 Real Estate LLC    Mexico    117472    1140607
SIGLO 21    Century 21 Real Estate LLC    Mexico    117474    436004
CENTURION    Century 21 Real Estate LLC    Monaco    14083    01.22851
CENTURY 21    Century 21 Real Estate LLC    Monaco    11316    2R97.17947
CENTURY 21    Century 21 Real Estate LLC    Monaco    13115    00.21138
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Monaco    26756    06.25281
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Monaco    14180    92.14147
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    Monaco    14179    92.14146
SIECLE 21    Century 21 Real Estate LLC    Monaco    13114    00.21137
CENTURY 21    Century 21 Real Estate LLC    Montenegro    Z-1284/2000    46528
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Montenegro    Z-800/2006    53318
CENTURY 21    Century 21 Real Estate LLC    Montserrat    1432    1432
CENTURY 21    Century 21 Real Estate LLC    Morocco    75533    75533
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Morocco    75534    75534
CENTURY 21    Century 21 Real Estate LLC    Mozambique    12675/2007   
CENTURY 21    Century 21 Real Estate LLC    Netherlands Antilles    D-600644    12451
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Netherlands Antilles    D-300531    10146
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Netherlands Antilles    16277    01028
CENTURION    Century 21 Real Estate LLC    New Zealand    211267    211267
CENTURION    Century 21 Real Estate LLC    New Zealand    211268    211268
CENTURY 21    Century 21 Real Estate LLC    New Zealand    113348    113348
CENTURY 21    Century 21 Real Estate LLC    New Zealand    182993    182993
CENTURY 21    Century 21 Real Estate LLC    New Zealand    192823    192823
CENTURY 21 & New House Design    Century 21 Real Estate LLC    New Zealand    204877    204877
CENTURY 21 & New House Design    Century 21 Real Estate LLC    New Zealand    204878    204878
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    New Zealand    209832    209832
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    New Zealand    209833    209833
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    New Zealand    209834    209834
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    New Zealand    209835    209835
CENTURY 21    Century 21 Real Estate LLC    Nicaragua    4327    20120
CENTURY 21    Century 21 Real Estate LLC    Nicaragua    4419    20151
CENTURY 21 & New House Design    Century 21 Real Estate Corp    Nicaragua    98-01044    38878 CC
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Nicaragua    2001/00773    51219
SIGLO 21    Century 21 Real Estate LLC    Nicaragua    98-01046    38889 CC

 

II-25


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21    Century 21 Real Estate LLC    Nigeria    TP 6465    55325
CENTURY 21    Century 21 Real Estate LLC    Nigeria    13453   
CENTURY 21    Century 21 Real Estate LLC    Nigeria    13455   
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Nigeria    TP 6466    55326
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Nigeria    13452   
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Nigeria    13454   
ARHUNDRE 21    Century 21 Real Estate LLC    Norway    905034    153820
CENTURY 21    Century 21 Real Estate LLC    Norway    123490    102752
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Norway    906024    152873
CENTURY 21    Century 21 Real Estate LLC    Oman    3373    3373
CENTURY 21    Century 21 Real Estate LLC    Oman    3374    3374
CENTURY 21    Century 21 Real Estate LLC    Oman    63962   
CENTURY 21    Century 21 Real Estate LLC    Oman    63963   
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Oman    5144    5144
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Oman    5145    5145
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Oman    63964   
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Oman    63965   
CENTURY 21    Century 21 Real Estate Corp    Pakistan    103018   
CENTURY 21    Century 21 Real Estate Corp    Pakistan    201865   
CENTURY 21 & New House Design    Century 21 Real Estate Corp    Pakistan    109017   
CENTURY 21 & New House Design    Century 21 Real Estate Corp    Pakistan    201864   
CENTURY 21    Century 21 Real Estate LLC    Panama    46721    46721
CENTURY 21    Century 21 Real Estate LLC    Panama    46733    46733
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Panama    64716    64716
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Panama    64717    64717
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Panama    64835    64835
SIGLO 21    Century 21 Real Estate LLC    Panama    92979    92979
CENTURION    Century 21 Real Estate LLC    Papua New Guinea    58137    58137
CENTURION    Century 21 Real Estate LLC    Papua New Guinea    58138    58138
CENTURY 21    Century 21 Real Estate LLC    Papua New Guinea    56203    56203
CENTURY 21    Century 21 Real Estate LLC    Papua New Guinea    56204    56204
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Papua New Guinea    56525    56525
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Papua New Guinea    56956    56956

 

II-26


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Papua New Guinea    57047    57047
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    Papua New Guinea    56955    56955
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    Papua New Guinea    57046    57046
VIP    Century 21 Real Estate Corp    Papua New Guinea    58136    58136
CENTURY 21    Century 21 Real Estate LLC    Paraguay    006295    291160
CENTURY 21    Century 21 Real Estate LLC    Paraguay    006296    291159
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Paraguay    006293    291066
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Paraguay    006294    291065
SIGLO 21    Century 21 Real Estate LLC    Paraguay    8978    324715
CENTURY 21    Century 21 Real Estate LLC    Peru    60156    47487
CENTURY 21    Century 21 Real Estate LLC    Peru    60161    15048
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Peru    60159    15047
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Peru    60160    47813
SIGLO 21    Century 21 Real Estate LLC    Peru    164356    32792
CENTURY 21    Century 21 Real Estate LLC    Philippines    4-2008-003528    4-2008-003528
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Philippines    4-1997-120725   
CENTURY 21    Century 21 Real Estate LLC    Poland    Z-237717    158490
CENTURY 21    Century 21 Real Estate LLC    Poland    89660    68493
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Poland    Z-237716    158489
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Poland    117091    83480
CENTURY 21    Century 21 Real Estate LLC    Portugal    190308    190308
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Portugal    270646    270646
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Portugal    270647    270647
EM CASA COM A CENTURY 21    Century 21 Real Estate LLC    Portugal    386229    386229
SECULO 21    Century 21 Real Estate LLC    Portugal    261233    261233
SECULO 21    Century 21 Real Estate LLC    Portugal    261234    261234
CENTURY 21    Century 21 Real Estate Corp    Puerto Rico       45171
CENTURY 21 & New House Design    Century 21 Real Estate Corp    Puerto Rico       45172
CENTURY 21 & Sign & Post Design    Century 21 Real Estate Corp    Puerto Rico       7935
CENTURY 21    Century 21 Real Estate LLC    Qatar    21058    21058
CENTURY 21    Century 21 Real Estate LLC    Qatar    21059    21059
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Qatar    21060    21060
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Qatar    21061    21061

 

II-27


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21    Century 21 Real Estate LLC    Romania    22820    16676
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Romania    200607307    92058
21-Century.ru    Century 21 Real Estate LLC    Russian Federation      
BEK 21 & Design (in Cyrillic)    Century 21 Real Estate LLC    Russian Federation    2006722911    359650
CENTURY 21    Century 21 Real Estate LLC    Russian Federation    113589    88734
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Russian Federation    92010718    123932

CENTURY 21 & New House Design

(in Cyrillic)

   Century 21 Real Estate LLC    Russian Federation    2006712394    335154
CENTURY 21 (in Cyrillic)    Century 21 Real Estate LLC    Russian Federation    2006712393    335961
CENTURY 21 COMMERCIAL & Design    Century 21 Real Estate LLC    Russian Federation    2007724685    342552
CENTURY 21 COMMERCIAL & Design (in Cyrillic)    Century 21 Real Estate LLC    Russian Federation    2007724687    342553
CENTURY 21 FINE HOMES & ESTATES & New Gate Design    Century 21 Real Estate LLC    Russian Federation    2007724684    342317

CENTURY 21 FINE HOMES & ESTATES & New Gate Design

(in Cyrillic)

   Century 21 Real Estate LLC    Russian Federation    2007724686    342318
Century21.ru    Century 21 Real Estate LLC    Russian Federation      
CENTURY 21    Century 21 Real Estate LLC    Saudi Arabia    2808    83/17
CENTURY 21    Century 21 Real Estate LLC    Saudi Arabia    136353    1124/3
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Saudi Arabia    12952    241/14
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Saudi Arabia    12953    241/15
CENTURY 21    Century 21 Real Estate LLC    Serbia    Z-1284/2000    46528
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Serbia    Z-800/2006    53318
CENTURION    Century 21 Real Estate LLC    Singapore    6349    6349
CENTURION    Century 21 Real Estate LLC    Singapore    6350    6350
CENTURY 21    Century 21 Real Estate LLC    Singapore    1426    T9101426H
CENTURY 21    Century 21 Real Estate LLC    Singapore    75995    T75995F
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Singapore    1427    T9101427F
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Singapore    8106    T9008106I
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Singapore    2378    T9102378Z
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Singapore    2380    T9102380A
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    Singapore    2379    T9102379H
CENTURY 21 & Sign Design (in series)    Century 21 Real Estate LLC    Singapore    15210I    15210I
CENTURY 21    Century 21 Real Estate LLC    Slovakia    170452    170452
CENTURY 21    Century 21 Real Estate LLC    South Africa    75/5357    75/5357

 

II-28


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21    Century 21 Real Estate LLC    South Africa    75/5356    75/5356
CENTURY 21    Century 21 Real Estate LLC    South Africa    91/4114    91/4114
CENTURY 21 & New House Design    Century 21 Real Estate LLC    South Africa    91/0141    91/0141
CENTURY 21 & New House Design    Century 21 Real Estate LLC    South Africa    91/0140    91/0140
CENTURY 21 & New House Design (Black & Gold)    Century 21 Real Estate LLC    South Africa    200700535    200700535
CENTURY 21 & New House Design (Black & Gold)    Century 21 Real Estate LLC    South Africa    200700536    200700536
CENTURY 21 & New House Design (Black & Gold)    Century 21 Real Estate LLC    South Africa    200700537    200700537
CENTURY 21 & New House Design (Black & Gold)    Century 21 Real Estate LLC    South Africa    200700538    200700538
CENTURY 21 & New House Design (Black & Gold)    Century 21 Real Estate LLC    South Africa    200700539    200700539
CENTURY 21 & New House Design (Black & Gold)    Century 21 Real Estate LLC    South Africa    200700540    200700540
century21.co.za    Century 21 Real Estate LLC    South Africa      
century21webauctions.co.za    Century 21 Real Estate LLC    South Africa      
CENTURY 21    Century 21 Real Estate LLC    Spain    800432    800432
CENTURY 21    Century 21 Real Estate LLC    Spain    1946791    1946791
CENTURY 21    Century 21 Real Estate LLC    Spain    1946792    1946792
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Spain    1594972    1594972
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Spain    1594973    1594973
CENTURY 21 BAHIA    Century 21 Real Estate LLC    Spain    2641550    2641550
VEINTE & UNO INMOBILIARIA    Century 21 Real Estate LLC    Spain    2042000    2042000
CENTURY 21    Century 21 Real Estate Corp    Sri Lanka    71860    71860
CENTURY 21 & New House Design    Century 21 Real Estate Corp    Sri Lanka    71861    71861
CENTURY 21    Century 21 Real Estate LLC    St. Lucia    2007/260    260
CENTURY 21    Century 21 Real Estate LLC    St. Lucia    2007/258    258
CENTURY 21 & New House Design    Century 21 Real Estate LLC    St. Lucia    104/91    104/91
CENTURY 21 & New House Design    Century 21 Real Estate LLC    St. Lucia    2007/259    259
CENTURY 21    Century 21 Real Estate LLC    St. Vincent and the Grenadines       3 of 1998
CENTURY 21 & New House Design    Century 21 Real Estate LLC    St. Vincent and the Grenadines       4 of 1998
CENTURY 21    Century 21 Real Estate LLC    Suriname    16558    16558
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Suriname    15910    15910
ARHUNDRADE 21    Century 21 Real Estate LLC    Sweden    90-2278    242489
CENTURY 21    Century 21 Real Estate LLC    Sweden    75-4254    156766
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Sweden    91-00141    236989

 

II-29


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

SEKEL 21    Century 21 Real Estate LLC    Sweden    90-2277    242488
CENTURION    Century 21 Real Estate LLC    Switzerland    4879/1991.6    396770
CENTURY 21    Century 21 Real Estate LLC    Switzerland    1621/1993.0    405633
CENTURY 21    Century 21 Real Estate LLC    Switzerland    4254/75    279690
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Switzerland    134/1991.2    390456
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Switzerland    1622/1993.1    405850
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Switzerland    58244/2010    603724
CENTURY 21 & New House Design in Rectangle    Century 21 Real Estate LLC    Switzerland    1713/1991.1    388098
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Switzerland    1714/1991.3    388099
JAHRHUNDERT 21    Century 21 Real Estate LLC    Switzerland    6744/1990.8    391692
JAHRHUNDERT 21    Century 21 Real Estate LLC    Switzerland    55062/2010    605888
SECOLO 21    Century 21 Real Estate LLC    Switzerland    6745/1990.0    391693
SECOLO 21    Century 21 Real Estate LLC    Switzerland    55066/2010    605889
SIECLE 21    Century 21 Real Estate LLC    Switzerland    55065/2010    605890
SIECLE 21    Century 21 Real Estate LLC    Switzerland    379729    379729
CENTURION    Century 21 Real Estate LLC    Taiwan    83-037517    75126
CENTURION    Century 21 Real Estate LLC    Taiwan    83-037515    73356
CENTURION    Century 21 Real Estate LLC    Taiwan    83-037514    678042
CENTURY 21    Century 21 Real Estate LLC    Taiwan    83-043311    675135
CENTURY 21    Century 21 Real Estate LLC    Taiwan    83-043310    675129
CENTURY 21    Century 21 Real Estate LLC    Taiwan    74-2073    18204
CENTURY 21    Century 21 Real Estate LLC    Taiwan    74-2072    17933
CENTURY 21    Century 21 Real Estate LLC    Taiwan    74-2071    300696
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Taiwan    83-037508    75131
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Taiwan    83-037506    72852
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Taiwan    83-037505    678086
CENTURY 21 & New House Design (with Chinese)    Century 21 Real Estate LLC    Taiwan    82-005443    66001
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Taiwan    83-037513    75133
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Taiwan    83-037512    72854
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    Taiwan    83-037511    678088
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    Taiwan    83-037510    75132
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    Taiwan    83-037508    678087
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    Taiwan    83-035709    72853
CENTURY 21 (in Chinese)    Century 21 Real Estate LLC    Taiwan    82-005441    65970

 

II-30


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21 FINE HOMES & ESTATES    Century 21 Real Estate LLC    Taiwan    097012157    1361382
CENTURY 21 FINE HOMES & ESTATES & New Gate Design 2008    Century 21 Real Estate LLC    Taiwan    097012158    1361383
CENTURY 21 FINE HOMES & ESTATES & New Gate Design 2008 in Chinese    Century 21 Real Estate LLC    Taiwan    097019804    1361429

CENTURY 21 REAL ESTATE

(in Chinese)

   Century 21 Real Estate LLC    Taiwan    86-040886    104270

CENTURY 21 REAL ESTATE

(in Chinese)

   Century 21 Real Estate LLC    Taiwan    86-040885    104269

CENTURY 21 REAL ESTATE

(in Chinese)

   Century 21 Real Estate LLC    Taiwan    86-040884    104268
CENTURY 21    Century 21 Real Estate LLC    Tanganyika    20794    20794
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Tanganyika    20800    20800
CENTURY 21    Century 21 Real Estate LLC    Tangier    18559    18559
CENTURY 21 & Design    Century 21 Real Estate LLC    Tangier    18560    18560
CENTURY 21    Century 21 Real Estate LLC    Thailand    225528    BOR 238
CENTURY 21    Century 21 Real Estate LLC    Thailand    381964    Khor121654
CENTURY 21 & Design    Century 21 Real Estate LLC    Thailand    225529    BOR 237
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Thailand    438249    Khor130034
CENTURY 21    Century 21 Real Estate LLC    Trinidad and Tobago    24404    24404
CENTURY 21    Century 21 Real Estate LLC    Trinidad and Tobago    24405    24405
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Trinidad and Tobago    19582    19582
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Trinidad and Tobago    24402    24402
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Trinidad and Tobago    24403    24403
CENTURY 21    Century 21 Real Estate LLC    Tunisia    EE082993   
CENTURY 21    Century 21 Real Estate LLC    Tunisia    EE00.2178    EE00.2178
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Tunisia    EE00.2179    EE00.2179
CENTURY 21 & New Pitched Roof House Design    Century 21 Real Estate LLC    Tunisia    EE082994   
CENTURY 21    Century 21 Real Estate LLC    Turkey    1897    176890
CENTURY 21    Century 21 Real Estate LLC    Turkey    14216    112956
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Turkey    1898    169560
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Turkey    55782    130768
CENTURY 21    Century 21 Real Estate LLC    Turks and Caicos Islands    10564    10564
CENTURY 21    Century 21 Real Estate LLC    Turks and Caicos Islands    12406    12406
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Turks and Caicos Islands    11179    11179

 

II-31


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21 & New House Design    Century 21 Real Estate LLC    Turks and Caicos Islands    12407    12407
CENTURY 21 & Sign & Post Design (Gold & Brown)    Century 21 Real Estate Corp    Turks and Caicos Islands    015143    15143
CENTURY 21 & Sign & Post Design (Gold & Brown)    Century 21 Real Estate Corp    Turks and Caicos Islands    015144    15144
BEK 21    Century 21 Real Estate LLC    Ukraine    200612009    91129
BEK 21 & Design    Century 21 Real Estate LLC    Ukraine    200612008    91130
CENTURY 21    Century 21 Real Estate LLC    Ukraine    200516000    82406
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Ukraine    200515998    79671

CENTURY 21 & New House Design

(in Cyrillic)

   Century 21 Real Estate LLC    Ukraine    200606808    88523

CENTURY 21 & New House Design

(in Ukranian)

   Century 21 Real Estate LLC    Ukraine    200606802    85723
CENTURY 21 (in Cyrillic)    Century 21 Real Estate LLC    Ukraine    200606809    88524
CENTURY 21 (in Ukranian)    Century 21 Real Estate LLC    Ukraine    200606804    85724
CENTURY 21 COMMERCIAL & Design    Century 21 Real Estate LLC    Ukraine    M200713312    98001
CENTURY 21 COMMERCIAL & Design (in Cyrillic)    Century 21 Real Estate LLC    Ukraine    M200713316    98003
CENTURY 21 FINE HOMES & ESTATES & New Gate Design    Century 21 Real Estate LLC    Ukraine    M200713311    98000

CENTURY 21 FINE HOMES & ESTATES & New Gate Design

(in Cyrillic)

   Century 21 Real Estate LLC    Ukraine    M200713314    98002
CENTURY 21    Century 21 Real Estate LLC    United Arab Emirates    30183    22616
CENTURY 21    Century 21 Real Estate LLC    United Arab Emirates    37513    28176
CENTURY 21 & New House Design    Century 21 Real Estate LLC    United Arab Emirates    37514    30595
CENTURY 21 & New House Design    Century 21 Real Estate LLC    United Arab Emirates    37515    28189
CENTURION    Century 21 Real Estate LLC    United Kingdom    1469923    1469923
CENTURION    Century 21 Real Estate LLC    United Kingdom    1469924    1469924
CENTURY 21    Century 21 Real Estate LLC    United Kingdom    1062225    1062225
CENTURY 21    Century 21 Real Estate LLC    United Kingdom    1274764    1274764
CENTURY 21    Century 21 Real Estate LLC    United Kingdom    1274765    1274765
CENTURY 21    Century 21 Real Estate LLC    United Kingdom    1274766    1274766
CENTURY 21 & New House Design    Century 21 Real Estate LLC    United Kingdom    1453968    1453968
CENTURY 21 & New House Design    Century 21 Real Estate LLC    United Kingdom    1453969    1453969
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    United Kingdom    1459099    B1459099
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    United Kingdom    1459101    B1459101
SIGLO 21    Century 21 Real Estate LLC    United Kingdom    2161639    2161639
SIGLO 21    Century 21 Real Estate LLC    United Kingdom    2173509    2173509

 

II-32


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

1-800-4-HOUSES    Century 21 Real Estate LLC    United States    74469574    2376323
21 ONLINE & Design    Century 21 Real Estate LLC    United States    75099281    2113555
21ST CENTURY    Century 21 Real Estate LLC    United States    75436943    2300743
21ST CENTURY    Century 21 Real Estate LLC    United States    78565509    3116448
21ST CENTURY CASUALTY    Century 21 Real Estate LLC    United States    78565519    3055063
21ST CENTURY CASUALTY & Design    Century 21 Real Estate LLC    United States    75721880    2700705
21ST CENTURY INSURANCE    Century 21 Real Estate LLC    United States    78565505    3106265
21ST CENTURY INSURANCE & Design    Century 21 Real Estate LLC    United States    75721881    3298401
21ST CENTURY INSURANCE & Design    Century 21 Real Estate LLC    United States    76181517    3060562
21ST CENTURY NEWS    Century 21 Real Estate LLC    United States    76279430    2685577
AD/PAC    Century 21 Real Estate LLC    United States    73260228    1212383
AGENTS OF CHANGE    Century 21 Real Estate LLC    United States    78815003    3270259
AT HOME WITH CENTURY 21    Century 21 Real Estate LLC    United States    78195146    2960793
BUYER SERVICE PLEDGE    Century 21 Real Estate LLC    United States    74122856    1812377
C21    Century 21 Real Estate LLC    United States    78427047    2933408
C-21    Century 21 Real Estate LLC    United States    73368407    1268185
C21 TALK RADIO    Century 21 Real Estate LLC    United States    77721724    3711934
C21 TALK RADIO FOR THE REAL WORLD    Century 21 Real Estate LLC    United States    78061343    2809296
CENTURION    Century 21 Real Estate LLC    United States    73754544    1563740
CENTURION    Century 21 Real Estate LLC    United States    73754545    1553298
CENTURION & Design    Century 21 Real Estate LLC    United States    73754547    1563741
CENTURION Design    Century 21 Real Estate LLC    United States    73754543    1553297
CENTURION HONOR SOCIETY    Century 21 Real Estate LLC    United States    78302129    2981964
CENTURY 21    Century 21 Real Estate LLC    United States    73072695    1063488
CENTURY 21    Century 21 Real Estate LLC    United States    73133892    1085039
CENTURY 21    Century 21 Real Estate LLC    United States    73421810    1304095
CENTURY 21    Century 21 Real Estate LLC    United States    73608730    1429531
CENTURY 21    Century 21 Real Estate LLC    United States    75071763    2178970
CENTURY 21    Century 21 Real Estate LLC    United States    76279429    2662159
CENTURY 21    Century 21 Real Estate LLC    United States    78008646    2762774
CENTURY 21 & Jacket Design    Century 21 Real Estate LLC    United States    73774121    1631850
CENTURY 21 & New House Design    Century 21 Real Estate LLC    United States    73133894    1085040
CENTURY 21 & New House Design    Century 21 Real Estate LLC    United States    73138501    1104464
CENTURY 21 & New House Design    Century 21 Real Estate LLC    United States    74142432    1771535
CENTURY 21 & Sign & Post Design    Century 21 Real Estate LLC    United States    73262350    1263774

 

II-33


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CENTURY 21 & Sign Design    Century 21 Real Estate LLC    United States    73783422    1576475
CENTURY 21 & Sign Design    Century 21 Real Estate LLC    United States    74631924    2027670
CENTURY 21 (New House Design with Floor)    Century 21 Real Estate LLC    United States    78852446    3219883
CENTURY 21 (New House Design)    Century 21 Real Estate LLC    United States    78852448    3219884
CENTURY 21 BUILDER CONNECTIONS & Design    Century 21 Real Estate LLC    United States    75906666    2656899
CENTURY 21 COMMERCIAL    Century 21 Real Estate LLC    United States    78827023    3219828
CENTURY 21 COMMERCIAL & Design    Century 21 Real Estate LLC    United States    75193702    2158319
CENTURY 21 COMMERCIAL & Design    Century 21 Real Estate LLC    United States    78815005    3253260
CENTURY 21 CONNECTIONS    Century 21 Real Estate LLC    United States    77941480    3841423
CENTURY 21 CONNECTIONS REAL CONVENIENCE REAL VALUE & Design    Century 21 Real Estate LLC    United States    75651790    2378922
CENTURY 21 FINE HOMES & ESTATES    Century 21 Real Estate LLC    United States    76581393    3007069
CENTURY 21 FINE HOMES & ESTATES & New Gate Design    Century 21 Real Estate LLC    United States    78785304    3154137
CENTURY 21 FINE HOMES & ESTATES & Old Gate Design    Century 21 Real Estate LLC    United States    78011431    2612738
CENTURY 21 GLOBAL REFERRAL NETWORK & Design    Century 21 Real Estate LLC    United States    78047046    2725830
CENTURY 21 LEARNING SYSTEM    Century 21 Real Estate LLC    United States    78051378    2585459
CENTURY 21 MATURE MOVES    Century 21 Real Estate LLC    United States    78032288    2633322
CENTURY 21 MATURE MOVES & Design    Century 21 Real Estate LLC    United States    78036319    2633331
CENTURY 21 MORTGAGE    Century 21 Real Estate LLC    United States    78051978    2615437
CENTURY 21 MORTGAGE & Design    Century 21 Real Estate LLC    United States    73421809    1307407
CENTURY 21 NEW CONSTRUCTION    Century 21 Real Estate LLC    United States    78827028    3219829
CENTURY 21 NEW CONSTRUCTION & Design    Century 21 Real Estate LLC    United States    78816057    3219808
CENTURY 21 RECREATIONAL PROPERTIES    Century 21 Real Estate LLC    United States    78827022    3219827
CENTURY 21 RECREATIONAL PROPERTIES & Design    Century 21 Real Estate LLC    United States    74536797    1950262
CENTURY 21 STAR    Century 21 Real Estate LLC    United States    73763539    1551266

 

II-34


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

CLS CENTURY 21 LEARNING SYSTEM & Design    Century 21 Real Estate LLC    United States    78029441    2720034
CONNECT 2 THE 1    Century 21 Real Estate LLC    United States    77923672   
CREATE 21    Century 21 Real Estate LLC    United States    78021324    2622290
GOLD MEDALLION    Century 21 Real Estate LLC    United States    74090919    1747396
GOLD MEDALLION    Century 21 Real Estate LLC    United States    74090920    1681402
HOME BUYER’S KIT    Century 21 Real Estate LLC    United States    73735836    1594520
NEW CENTURY TITLE COMPANY    Century 21 Real Estate LLC    United States    75485913    2983399
OPERATION ORBIT    Century 21 Real Estate LLC    United States    74040345    1662428
ORBIT    Century 21 Real Estate LLC    United States    74401367    1835425
PROFESIONALES, REALIZANDO TU SUENO    Century 21 Real Estate LLC    United States    78908678    3229740
PUT NUMBER 1 TO WORK FOR YOU    Century 21 Real Estate LLC    United States    73494432    1367039
Q (stylized)    Century 21 Real Estate LLC    United States    76282440    2614917
Q.S.P.D.    Century 21 Real Estate LLC    United States    74128727    1711604
QUALITY SERVICE IN EVERY CUSTOMER CONTACT PROFITABLE DOMINANCE IN THE PRIMARY MARKETPLACE    Century 21 Real Estate LLC    United States    74128781    1713518
REAL ESTATE FOR THE REAL WORLD    Century 21 Real Estate LLC    United States    75614226    2398595
REAL ESTATE FOR YOUR WORLD    Century 21 Real Estate LLC    United States    78226832    2815094
SELLER SERVICE PLEDGE    Century 21 Real Estate LLC    United States    74122857    1750374
SYSTEM 21    Century 21 Real Estate LLC    United States    78605777    3424137
THE CENTURY 21 HOME PROTECTION PLAN    Century 21 Real Estate LLC    United States    73241780    1161341
THE GOLDEN RULER    Century 21 Real Estate LLC    United States    77864709   
THE REAL ESTATE INVESTMENT JOURNAL    Century 21 Real Estate LLC    United States    73158117    1153864
VIP    Century 21 Real Estate LLC    United States    73165161    1151216
VIRTUAL SOLUTION SERIES    Century 21 Real Estate LLC    United States    76429198    2807918
WEEKLY WIRE    Century 21 Real Estate LLC    United States    75301778    2207667
WE’RE THE NEIGHBORHOOD PROFESSIONALS    Century 21 Real Estate LLC    United States    73735838    1526116
CENTURY 21    Century 21 Real Estate LLC    Uruguay    294114    294114
CENTURY 21    Century 21 Real Estate LLC    Uruguay    315904    403039
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Uruguay    240868    354160
SIGLO 21    Century 21 Real Estate LLC    Uruguay    302.999    394986
CENTURY 21 & New House Design    Century 21 Real Estate Corp    Venezuela    13080-97    12130
CENTURY 21 (CENTURIA 21)    Century 21 Real Estate Corp    Venezuela    343-94    2667

 

II-35


Trademark

  

Owner Name

  

Country Name

  

Application No.

  

Registration No.

SIGLO 21    Century 21 Real Estate Corp    Venezuela    10993-98   
SIGLO 21 BIENES RAICES & Design    Century 21 Real Estate Corp    Venezuela    1535-98    13019
CENTURY 21    Century 21 Real Estate LLC    Viet Nam    4-2010-15665   
CENTURY 21    Century 21 Real Estate LLC    Viet Nam    29 552    24819
CENTURY 21    Century 21 Real Estate LLC    Viet Nam    4 2001 00266    40746
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Viet Nam    4-2010-15664   
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Viet Nam    29 553    24820
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Viet Nam    4 2001 00267    40747
CENTURY 21    Century 21 Real Estate LLC    Virgin Islands (British)       1822
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Virgin Islands (British)       1823
CENTURY 21    Century 21 Real Estate LLC    West Bank    5937    5937
CENTURY 21 & New House Design    Century 21 Real Estate LLC    West Bank    5935    5935
CENTURY 21 (in Arabic)    Century 21 Real Estate LLC    West Bank    5936    5936
CENTURY 21    Century 21 Real Estate LLC    Zanzibar    70/89    92/93
CENTURY 21 & New House Design    Century 21 Real Estate LLC    Zanzibar    142/90    182/93

ERA Franchise Systems LLC

Trademark Applications and Registrations

 

Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ERA    Albania    ERA Franchise Systems, Inc.*    AL-M-05-00413    10841
ERA & New House Design    Albania    ERA Franchise Systems, Inc.*    AL-M-05-00415    10843
ERA    Algeria    ERA Franchise Systems, Inc.*    051197    069735

ERA & New House Design

(black on white)

   Algeria    ERA Franchise Systems, Inc.*    051198    069736
ERA    Andorra    ERA Franchise Systems, Inc.*    20920    22553

ERA & New House Design

(black on white)

   Andorra    ERA Franchise Systems, Inc.*    20921    22557
ERA & New House Design (color)    Andorra    ERA Franchise Systems, Inc.*    20932    22635
ERA & New House Design (series of 3)    Anguilla    ERA Franchise Systems, Inc.*    3012    3012
ERA    Antigua and Barbuda    ERA Franchise Systems LLC    1978    1978
ERA & New House Design (series of 3)    Antigua and Barbuda    ERA Franchise Systems LLC    1981    1981

 

II-36


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ERA    Argentina    ERA Franchise Systems, Inc.*    2730941    2259559
ERA    Argentina    ERA Franchise Systems, Inc.*    2730940    2259534
ERA & New House Design    Argentina    ERA Franchise Systems, Inc.*    2730943    2259556
ERA & New House Design    Argentina    ERA Franchise Systems, Inc.*    2730942    2259537
ERA    Aruba    ERA Franchise Systems LLC    IM980420.28    19134
ERA & New House Design    Aruba    ERA Franchise Systems LLC    IM980420.27    19133
ERA    Australia    ERA Franchise Systems, Inc.*    389378    389378
ERA    Australia    ERA Franchise Systems, Inc.*    614060    614060
ERA    Australia    ERA Franchise Systems, Inc.*    613949    613949
ERA & New House Design (series of 2)    Australia    ERA Franchise Systems, Inc.*    734308    734308
ERA & Old House, Circle Design    Australia    ERA Franchise Systems, Inc.*    389379    389379
ERA & Old House, Circle Design    Australia    ERA Franchise Systems, Inc.*    614146    614146
ERA & Old House, Circle Design    Australia    ERA Franchise Systems, Inc.*    614147    614147
TEAM ERA    Australia    ERA Franchise Systems, Inc.*    613952    613952
TEAM ERA    Australia    ERA Franchise Systems, Inc.*    613953    613953
ERA & New House Design    Austria    ERA Franchise Systems, Inc.*    4684/97    172178
ERA    Azerbaijan    ERA Franchise Systems LLC    20081822    2010 0372
ERA & New House Design    Azerbaijan    ERA Franchise Systems LLC    20081821    20100371
ERA    Bahamas    ERA Franchise Systems, Inc.*    20611    20611
ERA & Design    Bahamas    ERA Franchise Systems, Inc.*    20596    20596
ERA    Bahrain    ERA Franchise Systems, Inc.*    42829    42829
ERA    Bahrain    ERA Franchise Systems, Inc.*    42830    42830
ERA & New House Design (color)    Bahrain    ERA Franchise Systems, Inc.*    42831    42831
ERA & New House Design (color)    Bahrain    ERA Franchise Systems, Inc.*    42832    42832
ERA    Barbados    ERA Franchise Systems, Inc.*    NA    81/13157
ERA    Barbados    ERA Franchise Systems, Inc.*    NA    81/13156

 

II-37


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ERA & New House Design (black on white)    Barbados    ERA Franchise Systems, Inc.*    NA    81/13154
ERA & New House Design (black on white)    Barbados    ERA Franchise Systems, Inc.*    NA    81/13155
ERA    Belize    ERA Franchise Systems, Inc.*    3175.05    3175.05
ERA & New House Design (black on white)    Belize    ERA Franchise Systems, Inc.*    3174.05    3174.05
AMSTERDAM ERA MAKELAARS    Benelux    ERA Franchise Systems, Inc.*    1109584    799660
ERA & New House Design (white on black)    Benelux    ERA Franchise Systems, Inc.*    888757    607767
ERA & Sign & Post Design    Benelux    ERA Franchise Systems, Inc.*    618741    618741
ERA AMSTERDAM    Benelux    ERA Franchise Systems, Inc.*    1109585    799661
ERA MAKELAAR OPEN HUIZEN ROUTE & Design    Benelux    ERA Franchise Systems, Inc.*    1067707    766494
ERA MAKELAARS AMSTERDAM    Benelux    ERA Franchise Systems, Inc.*    1109265    811386
ERA    Bermuda    ERA Franchise Systems LLC    34365    34365
ERA    Bermuda    ERA Franchise Systems LLC    48873    48873
ERA    Bermuda    ERA Franchise Systems LLC    48874    48874
ERA & New House Design    Bermuda    ERA Franchise Systems LLC    48875    48875
ERA & New House Design    Bermuda    ERA Franchise Systems LLC    48876    48876
ERA & New House Design (black on white)    Bermuda    ERA Franchise Systems LLC    34366    34366
ERA    Bolivia    ERA Franchise Systems LLC    272809   
ERA    Bolivia    ERA Franchise Systems LLC    272909   
ERA & New House Design    Bolivia    ERA Franchise Systems LLC    273109   
ERA & New House Design    Bolivia    ERA Franchise Systems LLC    273009   
ERA    Bosnia and Herzegovina    ERA Franchise Systems, Inc.*    BAZ059324A    BAZ059324
ERA & New House Design    Bosnia and Herzegovina    ERA Franchise Systems, Inc.*    BAZ059323A    BAZ059323
ERA    Brazil    ERA Franchise Systems LLC    830176411   
ERA    Brazil    ERA Franchise Systems LLC    830172475   
ERA & New House Design    Brazil    ERA Franchise Systems LLC    830176403   
ERA & New House Design    Brazil    ERA Franchise Systems LLC    830172521   

 

II-38


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ERA & Old House Design    Brazil    ERA Franchise Systems, Inc.*    819488011    819488011
ERA & New House Design (black on white)    Brunei Darussalam    ERA Franchise Systems, Inc.*    BRU/28160    25588
ERA    Bulgaria    ERA Franchise Systems, Inc.*    82714    74639
ERA & New House Design (black on white)    Bulgaria    ERA Franchise Systems, Inc.*    82715    74770
ERA & New House Design (color)    Bulgaria    ERA Franchise Systems, Inc.*    82716    74711
ERA    Cambodia    ERA Franchise Systems LLC    13156    12854
ERA    Cambodia    ERA Franchise Systems LLC    13157    12855
ERA & New House Design    Cambodia    ERA Franchise Systems LLC    12606    12665
ERA & New House Design    Cambodia    ERA Franchise Systems LLC    12607    12666
ERA    Canada    ERA Franchise Systems LLC    505554    289140
ERA    Canada    ERA Franchise Systems LLC    502174    297534
ERA & New House Design    Canada    ERA Franchise Systems LLC    1277797   
ERA & New House Design    Canada    ERA Franchise Systems LLC    1500588   
ERA & Old House, Circle Design    Canada    ERA Franchise Systems LLC    505555    296842
ERA    Cayman Islands    ERA Franchise Systems, Inc.*       1584675
ERA & New House Design (series of 3)    Cayman Islands    ERA Franchise Systems, Inc.*       2132336
ERA    Chile    ERA Franchise Systems LLC    872771   
ERA    Chile    ERA Franchise Systems LLC    872770   
ERA & New House Design    Chile    ERA Franchise Systems LLC    871842   
ERA & New House Design    Chile    ERA Franchise Systems LLC    871841   
ERA    China (People’s Republic)    ERA Franchise Systems LLC    9900119491    1512620
ERA    China (People’s Republic)    ERA Franchise Systems LLC    4980368   
ERA & New House Design (black on white)    China (People’s Republic)    ERA Franchise Systems LLC    9900119489    1512612
ERA (new house design)    China (People’s Republic)    ERA Franchise Systems LLC    9900119490    1487627
ERA    Colombia    ERA Franchise Systems LLC    95 41908    287103
ERA    Colombia    ERA Franchise Systems LLC    01 00174    285870

 

II-39


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ERA & New House Design (black on white)    Colombia    ERA Franchise Systems LLC    98 22226    275305
ERA & New House Design (black on white)    Colombia    ERA Franchise Systems LLC    98 0511    275576
ERA & Old House, Circle Design    Colombia    ERA Franchise Systems, Inc.*    95 41907    292845
ERA    Costa Rica    ERA Franchise Systems, Inc.*    80449    80449
ERA    Costa Rica    ERA Franchise Systems, Inc.*    80451    80451
ERA    Costa Rica    ERA Franchise Systems LLC    2010-9136   
ERA & New House Design    Costa Rica    ERA Franchise Systems LLC    2010-9139   
ERA & New House Design    Costa Rica    ERA Franchise Systems LLC    2010-9140   
ERA & Old House, Circle Design    Costa Rica    ERA Franchise Systems, Inc.*    80450    80450

ERA REAL ESTATE & New House Design

(in color)

   Costa Rica    ERA Franchise Systems, Inc.*    2002-006229    138005
ERA    Croatia    ERA Franchise Systems, Inc.*    20051765    20051765
ERA & New House Design    Croatia    ERA Franchise Systems, Inc.*    20051766    20051766
ERA & New House Design    Czech Republic    ERA Franchise Systems LLC    145439    227727
ERA    Denmark    ERA Franchise Systems LLC    01389/98    2000 0031
ERA & New House Design    Denmark    ERA Franchise Systems LLC    01390/98    2000 0032
ERA    Dominica    ERA Franchise Systems, Inc.*    99181888    93/98
ERA & New House Design    Dominica    ERA Franchise Systems, Inc.*    99181887    92/98
ERA    Dominican Republic    ERA Franchise Systems LLC    98036562    99422
ERA    Dominican Republic    ERA Franchise Systems LLC       98235
ERA & New House Design    Dominican Republic    ERA Franchise Systems LLC    98036563    99417
ERA (and design)    Dominican Republic    ERA Franchise Systems LLC       98236
ERA    Ecuador    ERA Franchise Systems, Inc.*    58777    30597
ERA    Ecuador    ERA Franchise Systems, Inc.*    58780    30697
ERA & New House Design    Ecuador    ERA Franchise Systems, Inc.*    180790    2814-07
ERA & New House Design    Ecuador    ERA Franchise Systems, Inc.*    180791    2815-07
ERA & Old House Design    Ecuador    ERA Franchise Systems, Inc.*    58776    30497

 

II-40


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ERA & Old House Design    Ecuador    ERA Franchise Systems, Inc.*    58779    1231
ERA    Egypt    ERA Franchise Systems, Inc.*    161968    161968
ERA    Egypt    ERA Franchise Systems, Inc.*    161969    161969
ERA & New House Design    Egypt    ERA Franchise Systems, Inc.*    161971    161971
ERA & New House Design    Egypt    ERA Franchise Systems, Inc.*    161970    161970
ERA    El Salvador    ERA Franchise Systems, Inc.*    20050065387    216 Book 54
ERA    El Salvador    ERA Franchise Systems, Inc.*    20050065390    94 Book 52
ERA & New House Design (black on white)    El Salvador    ERA Franchise Systems, Inc.*    20050065384    87 Book 52
ERA & New House Design (black on white)    El Salvador    ERA Franchise Systems, Inc.*    20050065383    220 Book 54
ERA    European Community    ERA Franchise Systems LLC    538421    538421
ERA    European Community    ERA Franchise Systems LLC    4575379    4575379
ERA & New House Design (color)    European Community    ERA Franchise Systems LLC    4575361    4575361
ERA & New House Design (white on black)    European Community    ERA Franchise Systems LLC    782995    782995
ERA    Finland    ERA Franchise Systems LLC    T199800268    219819
ERA    Finland    ERA Franchise Systems LLC    T201002132   
ERA & New House Design    Finland    ERA Franchise Systems LLC    T199800269    219820
ERA & New House Design    Finland    ERA Franchise Systems LLC    T201002133   
ERA & New House Design (black on white)    France    ERA Franchise Systems, Inc.*    97686901    97686901
ERA & New House Design (color)    France    ERA Franchise Systems, Inc.*    97686900    97686900
ERA & New House Design (white on black)    France    ERA Franchise Systems, Inc.*    97667132    97667132
ERA & New House Design    Germany    ERA Franchise Systems, Inc.*    39721035.3    39721035
ERA    Ghana    ERA Franchise Systems LLC      
ERA    Ghana    ERA Franchise Systems LLC      
ERA & New House Design    Ghana    ERA Franchise Systems LLC    001998/2008   
ERA & New House Design    Ghana    ERA Franchise Systems LLC      
ERA    Gibraltar    ERA Franchise Systems LLC    9332    9332

 

II-41


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ERA & New House Design (series of 3)    Gibraltar    ERA Franchise Systems LLC    9331    9331
ERA    Greece    ERA Franchise Systems LLC    136042    136042/98
ERA & New House Design    Greece    ERA Franchise Systems LLC    136043    136043/98
ERA    Grenada    ERA Franchise Systems, Inc.*    87/1998    87/1998
ERA & New House Design (in series)    Grenada    ERA Franchise Systems, Inc.*    88/1998    88/1998
ERA    Guatemala    ERA Franchise Systems LLC    4150    141018
ERA    Guatemala    ERA Franchise Systems LLC    6145    167924
ERA    Guatemala    ERA Franchise Systems LLC       6345
ERA & New House Design    Guatemala    ERA Franchise Systems LLC    6146    167,920
ERA & New House Design (black on white)    Guatemala    ERA Franchise Systems LLC    4149    140849
ERA    Guyana    ERA Franchise Systems LLC    23370A   
ERA & New House Design    Guyana    ERA Franchise Systems LLC    23334A   
ERA    Haiti    ERA Franchise Systems LLC    371-T    388 Reg. 162
ERA    Haiti    ERA Franchise Systems LLC    372-T    389 Reg. 162
ERA & New House Design    Haiti    ERA Franchise Systems LLC    373-T    369 Reg. 163
ERA & New House Design    Haiti    ERA Franchise Systems LLC    374-T    370 Reg. 163
ERA    Honduras    ERA Franchise Systems LLC    4726/98    5057
ERA    Honduras    ERA Franchise Systems LLC    4727/98    102510
ERA & New House Design    Honduras    ERA Franchise Systems LLC    4610/98    5068
ERA & New House Design (black on white)    Honduras    ERA Franchise Systems LLC    4614/98    104867
ERA & Design    Hong Kong    ERA Franchise Systems, Inc.*    14652/92    4256/95
ERA & New House Design (black on white)    Hong Kong    ERA Franchise Systems, Inc.*    3804/97    199901582
ERA & New House Design (series of 2)    Hong Kong    ERA Franchise Systems, Inc.*    7896/97    199810953
ERA    India    ERA Franchise Systems, Inc.*    1290397    1290397
ERA    India    ERA Franchise Systems LLC    1580017   
ERA & New House Design    India    ERA Franchise Systems, Inc.*    01309561    1309561

 

II-42


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ERA & New House Design    India    ERA Franchise Systems LLC    1580018   
ERA    Indonesia    ERA Franchise Systems LLC    14419    IDM000048952
ERA    Indonesia    ERA Franchise Systems LLC    14418    IDM000048951
ERA    Indonesia    ERA Franchise Systems LLC    14416    IDM000048946
ERA    Indonesia    ERA Franchise Systems LLC    14417    IDM000048950
ERA & New House Design (color)    Indonesia    ERA Franchise Systems LLC    11737    IDM000149589
ERA & Old House, Circle Design    Indonesia    ERA Franchise Systems LLC    168861    IDM000042824
ERA & Old House, Circle Design    Indonesia    ERA Franchise Systems LLC    14420    IDM000048948
ERA & Old House, Circle Design    Indonesia    ERA Franchise Systems LLC    14423    IDM000048947
ERA & Old House, Circle Design    Indonesia    ERA Franchise Systems LLC    14422    IDM000048949
ERA & Old House, Circle Design    Indonesia    ERA Franchise Systems LLC    14421    IDM000046993
ERA    Ireland    ERA Franchise Systems LLC    98/1442    213581
ERA & New House Design    Ireland    ERA Franchise Systems LLC    98/1443    213604
ERA    Israel    ERA Franchise Systems, Inc.*    106137    106137
ERA & New House Design (black on white)    Israel    ERA Franchise Systems, Inc.*    112398    112398
ERA & New House Design (white on black)    Italy    ERA Franchise Systems, Inc.*    RM97C004101    1272876
ERA    Jamaica    ERA Franchise Systems, Inc.*    162603    36774
ERA    Jamaica    ERA Franchise Systems, Inc.*    41297    41297
ERA & New House Design    Jamaica    ERA Franchise Systems, Inc.*    162604    36783
ERA    Japan    ERA Franchise Systems LLC    88514/1993    3287800
ERA    Japan    ERA Franchise Systems LLC    88513/93    3337980
ERA & New House Design    Japan    ERA Franchise Systems LLC    28049/1997    4240288
ERA    Jordan    ERA Franchise Systems, Inc.*    79187    79187
ERA    Jordan    ERA Franchise Systems, Inc.*    79188    79188
ERA & New House Design    Jordan    ERA Franchise Systems, Inc.*    79191    79191
ERA & New House Design    Jordan    ERA Franchise Systems, Inc.*    79192    79192

 

II-43


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ERA    Kazakhstan    ERA Franchise Systems LLC    45549    31640
ERA & New House Design    Kazakhstan    ERA Franchise Systems LLC    45548    31639
ERA & New House Design (color)    Korea, Republic of    ERA Franchise Systems LLC    11635/97    0050945
ERA    Kosovo    ERA Franchise Systems LLC    2539   
ERA & New House Design    Kosovo    ERA Franchise Systems LLC    2538   
ERA    Kuwait    ERA Franchise Systems, Inc.*    70260    59155
ERA    Kuwait    ERA Franchise Systems, Inc.*    72481    61063
ERA & New House Design    Kuwait    ERA Franchise Systems, Inc.*    70261    59156
ERA & New House Design    Kuwait    ERA Franchise Systems, Inc.*    72482    61064
ERA    Laos    ERA Franchise Systems LLC    7325    19051
ERA    Laos    ERA Franchise Systems LLC    7325    19052
ERA & New House Design    Laos    ERA Franchise Systems LLC    7326    19053
ERA & New House Design    Laos    ERA Franchise Systems LLC    7326    19054
ERA & New House Design (black on white)    Latvia    ERA Franchise Systems LLC    M-99-1240    M47436
ERA    Lebanon    ERA Franchise Systems, Inc.*    95533    95533
ERA & New House Design    Lebanon    ERA Franchise Systems, Inc.*    95534    95534
ERA    Libya    ERA Franchise Systems, Inc.*    5186   
ERA    Libya    ERA Franchise Systems, Inc.*    5187   
ERA & New House Design    Libya    ERA Franchise Systems, Inc.*    5188   
ERA & New House Design    Libya    ERA Franchise Systems, Inc.*    5189   
ERA    Liechtenstein    ERA Franchise Systems, Inc.*    013766    13766
ERA & New House Design    Liechtenstein    ERA Franchise Systems, Inc.*    013767    13767
ERA & New House Design (black on white)    Lithuania    ERA Franchise Systems LLC    99-1695    40601
ERA    Macedonia    ERA Franchise Systems, Inc.*    2005/928    13232
ERA & New House Design    Macedonia    ERA Franchise Systems, Inc.*    2005/931    13231
ERA    Malaysia    ERA Franchise Systems LLC    08002708   

 

II-44


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ERA    Malaysia    ERA Franchise Systems LLC    08002709   
ERA & New House Design    Malaysia    ERA Franchise Systems LLC    99/226    99000226
ERA & New House Design (black on white)    Malaysia    ERA Franchise Systems LLC    97012663    97012663
ERA & Old House, Circle Design    Malaysia    ERA Franchise Systems, Inc.*    91/1152    91001152
ERA Old House, Circle Design    Malaysia    ERA Franchise Systems LLC    M91025    91025
ERA    Mauritius    ERA Franchise Systems LLC    MU/M/08/08707    08331/2009
ERA & New House Design    Mauritius    ERA Franchise Systems LLC    MU/M/08/08536    07226/2009
ERA    Mexico    ERA Franchise Systems, Inc.*    796173    987713
ERA & New House Design (black on white)    Mexico    ERA Franchise Systems, Inc.*    837793    1023942
ERA & New House Design    Monaco    ERA Franchise Systems, Inc.*    021010    9920833
ERA    Montenegro    ERA Franchise Systems LLC    Z-903/08   
ERA & New House Design    Montenegro    ERA Franchise Systems LLC    Z-904/08   
ERA    Montserrat    ERA Franchise Systems, Inc.*       1463
ERA & New House Design (in series)    Montserrat    ERA Franchise Systems, Inc.*       1464
ERA    Morocco    ERA Franchise Systems, Inc.*    95010    95010
ERA    Morocco    ERA Franchise Systems, Inc.*    95011    95011
ERA    Morocco    ERA Franchise Systems, Inc.*    92690    92690
ERA    Morocco    ERA Franchise Systems, Inc.*    92691    92691
ERA & New House Design (color)    Morocco    ERA Franchise Systems, Inc.*    95012    95012
ERA & New House Design (color)    Morocco    ERA Franchise Systems, Inc.*    95013    95013
ERA & New House Design (color)    Morocco    ERA Franchise Systems, Inc.*    92692    92692
ERA & New House Design (color)    Morocco    ERA Franchise Systems, Inc.*    92693    92693
ERA    Myanmar    ERA Franchise Systems LLC    4/23/2000    4/23/2000
ERA    Myanmar    ERA Franchise Systems LLC    4/23/2000    4/23/2000
ERA & New House Design    Myanmar    ERA Franchise Systems LLC    4/22/2000    4/22/2000
ERA & New House Design    Myanmar    ERA Franchise Systems LLC    4/22/2000    4/22/2000

 

II-45


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ERA    Netherlands Antilles    ERA Franchise Systems, Inc.*    800121    13348
ERA    Netherlands Antilles    ERA Franchise Systems LLC    800162    13356
ERA & New House Design    Netherlands Antilles    ERA Franchise Systems, Inc.*    800122    13349
ERA & New House Design    Netherlands Antilles    ERA Franchise Systems LLC    800163    13357
ERA    New Zealand    ERA Franchise Systems LLC    192008    192008
ERA & New House Design (series of 3)    New Zealand    ERA Franchise Systems, Inc.*    819985   
ERA & New House Design (series of 3)    New Zealand    ERA Franchise Systems LLC    276680    276680
ERA    Nicaragua    ERA Franchise Systems, Inc.*    2005-01929    0600601
ERA & New House Design (black on white)    Nicaragua    ERA Franchise Systems, Inc.*    2005-01930    0600600
ERA    Nigeria    ERA Franchise Systems LLC    F/TM/2009434   
ERA    Nigeria    ERA Franchise Systems LLC    F/TM/2009433   
ERA & New House Design    Nigeria    ERA Franchise Systems LLC    F/TM/2009431    84657
ERA & New House Design    Nigeria    ERA Franchise Systems LLC    F/TM/2009432   
ERA    Norway    ERA Franchise Systems LLC    98.00537    194678
ERA & New House Design    Norway    ERA Franchise Systems LLC    199907703    203264
ERA & New House Design (black on white)    Norway    ERA Franchise Systems LLC    98.00538    196289
ERA    Oman    ERA Franchise Systems, Inc.*    36887    36887
ERA    Oman    ERA Franchise Systems, Inc.*    36888    36888
ERA & New House Design (black on white)    Oman    ERA Franchise Systems, Inc.*    36889    36889
ERA & New House Design (black on white)    Oman    ERA Franchise Systems, Inc.*    36890    36890
ERA    Panama    ERA Franchise Systems, Inc.*    143045    143045
ERA    Panama    ERA Franchise Systems, Inc.*    143044    143044
ERA & New House Design (color)    Panama    ERA Franchise Systems, Inc.*    143048    143048
ERA & New House Design (color)    Panama    ERA Franchise Systems, Inc.*    143046    143046
ERA    Papua New Guinea    ERA Franchise Systems LLC    A62360    A62,360
ERA    Papua New Guinea    ERA Franchise Systems LLC    A62361    A62,361

 

II-46


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ERA & New House Design    Papua New Guinea    ERA Franchise Systems LLC    A62362    A62,362
ERA & New House Design    Papua New Guinea    ERA Franchise Systems LLC    A62363    A62,363
ERA    Paraguay    ERA Franchise Systems LLC    26156    340038
ERA    Paraguay    ERA Franchise Systems LLC    26158    340039
ERA & New House Design    Paraguay    ERA Franchise Systems LLC    26157    339981
ERA & New House Design    Paraguay    ERA Franchise Systems LLC    26159    339982
ERA    Peru    ERA Franchise Systems LLC    397468   
ERA    Peru    ERA Franchise Systems LLC    397467   
ERA & New House Design    Peru    ERA Franchise Systems LLC    397469   
ERA & New House Design    Peru    ERA Franchise Systems LLC    397475   
ERA    Philippines    ERA Franchise Systems LLC    4-2008-010928    4-2008-010928
ERA & New House Design    Philippines    ERA Franchise Systems LLC    4-2008-010771    4-2008-010771
ERA    Poland    ERA Franchise Systems LLC    Z-197068    137441
ERA & New House Design    Poland    ERA Franchise Systems LLC    Z-197067    137440
ERA & New House Design (black on white)    Portugal    ERA Franchise Systems, Inc.*    325827    325827
ERA    Qatar    ERA Franchise Systems, Inc.*    32846    32846
ERA    Qatar    ERA Franchise Systems, Inc.*    32847    32847
ERA & New House Design    Qatar    ERA Franchise Systems, Inc.*    32849    32849
ERA & New House Design    Qatar    ERA Franchise Systems, Inc.*    32848    32848
ERA    Romania    ERA Franchise Systems LLC    M2005 11899    71512
ERA    Romania    ERA Franchise Systems LLC    M2007 06567    95029
ERA & New House Design    Romania    ERA Franchise Systems LLC    M2005 11900    71513
ERA & New House Design    Romania    ERA Franchise Systems LLC    M2007 06568    95030
ERA    Russian Federation    ERA Franchise Systems LLC    2005720989    331367
ERA & New House Design    Russian Federation    ERA Franchise Systems, Inc.*    2006725599    344235
ERA (New House Design)    Russian Federation    ERA Franchise Systems LLC    2005720988    314603

 

II-47


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ERA    Saudi Arabia    ERA Franchise Systems, Inc.*    95698    857/44
ERA    Saudi Arabia    ERA Franchise Systems, Inc.*    95699    857/47
ERA & New House Design    Saudi Arabia    ERA Franchise Systems, Inc.*    95700    849/78
ERA & New House Design    Saudi Arabia    ERA Franchise Systems, Inc.*    95701    849/53
ERA    Serbia    ERA Franchise Systems LLC    Z-1960/07    56596
ERA & New House Design    Serbia    ERA Franchise Systems LLC    Z-1959/07    56595
ERA    Seychelles    ERA Franchise Systems LLC    444/2008    8756
ERA    Seychelles    ERA Franchise Systems LLC    445/2008    8757
ERA & New House Design    Seychelles    ERA Franchise Systems LLC    446/2008    8758
ERA & New House Design    Seychelles    ERA Franchise Systems LLC    447/2008    8759
ERA & New House Design (series of 3)    Singapore    ERA Franchise Systems, Inc.*    T97/10483H    T97/10483H
ERA & Old House Design    Singapore    ERA Franchise Systems, Inc.*    S8047/91    8047/91
ERA & New House Design    Slovakia    ERA Franchise Systems, Inc.*    1541/2000    196635
ERA    South Africa    ERA Franchise Systems LLC    2009/18869   
ERA    South Africa    ERA Franchise Systems LLC    2009/18870   
ERA & New House Design (black on white)    South Africa    ERA Franchise Systems LLC    9707024    9707024
ERA & New House Design (color)    South Africa    ERA Franchise Systems LLC    9707023    9707023
ERA & Old House Design    South Africa    ERA Franchise Systems LLC    81/4136    81/4136
ERA & New House Design (color)    Spain    ERA Franchise Systems, Inc.*    2093058    2093058
ERA & New House Design (white on black)    Spain    ERA Franchise Systems, Inc.*    2093057    2093057
SIEMPRE AHI PARA TI    Spain    ERA Franchise Systems, Inc.*       2286011
ERA    St. Kitts and Nevis    ERA Franchise Systems, Inc.*    S97    97
ERA & New House Design    St. Kitts and Nevis    ERA Franchise Systems, Inc.*    S96    96
ERA    St. Lucia    ERA Franchise Systems, Inc.*    118/1998    118/98
ERA    St. Lucia    ERA Franchise Systems, Inc.*    119/1998    119/98
ERA & New House Design    St. Lucia    ERA Franchise Systems, Inc.*    116/1998    116/98

 

II-48


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ERA & New House Design    St. Lucia    ERA Franchise Systems, Inc.*    117/1998    117/98
ERA    St. Vincent and the Grenadines    ERA Franchise Systems LLC    236/2006    236/2006
ERA & New House Design (series of 3)    St. Vincent and the Grenadines    ERA Franchise Systems LLC       129 OF 1998
ERA    Suriname    ERA Franchise Systems LLC    22046   
ERA & New House Design    Suriname    ERA Franchise Systems LLC    22044   
ERA    Sweden    ERA Franchise Systems, Inc.*    95-04899    308825
ERA    Switzerland    ERA Franchise Systems LLC    54080/2003    515800
ERA    Switzerland    ERA Franchise Systems LLC    59797/2010   
ERA & New House Design    Switzerland    ERA Franchise Systems LLC    01739/2001    486736
ERA & New House Design    Switzerland    ERA Franchise Systems LLC    54079/2003    515779
ERA    Taiwan    ERA Franchise Systems LLC    79-46327    51875
ERA & New House Design (white on black)    Taiwan    ERA Franchise Systems LLC    86025221    100963
ERA    Tangier    ERA Franchise Systems, Inc.*    32105    32105
ERA    Tangier    ERA Franchise Systems, Inc.*    32106    32106
ERA & New House Design    Tangier    ERA Franchise Systems, Inc.*    32107    32107
ERA & New House Design    Tangier    ERA Franchise Systems, Inc.*    32108    32108
ERA & New House Design (black on white)    Thailand    ERA Franchise Systems, Inc.*    335635    Bor6378
ERA    Trinidad and Tobago    ERA Franchise Systems LLC    28261    28261
ERA & New House Design (black & white)    Trinidad and Tobago    ERA Franchise Systems LLC    28262    28262
ERA    Tunisia    ERA Franchise Systems, Inc.*    EE042636    EE042636
ERA REAL ESTATE & New House Design    Tunisia    ERA Franchise Systems, Inc.*    EE042637    EE042637
ERA    Turkey    ERA Franchise Systems LLC    50587    50587
ERA    Turkey    ERA Franchise Systems LLC    61342    61342
ERA & New House Design    Turkey    ERA Franchise Systems LLC    50588    50588
ERA & New House Design    Turkey    ERA Franchise Systems LLC    61343    61343
ERA GRUP and Design    Turkey    ERA Franchise Systems LLC    2002/35722    2002/35722

 

II-49


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ERA    Turkish Republic of Northern Cyprus    ERA Franchise Systems LLC    7900    7900
ERA & New House Design    Turkish Republic of Northern Cyprus    ERA Franchise Systems LLC    7901    7901
ERA    Turks and Caicos Islands    ERA Franchise Systems, Inc.*    11691    11691
ERA    Turks and Caicos Islands    ERA Franchise Systems, Inc.*    12413    12413
ERA & New House Design (b&w)    Turks and Caicos Islands    ERA Franchise Systems, Inc.*    12414    12414
ERA (new house design)    Turks and Caicos Islands    ERA Franchise Systems, Inc.*    11798    11798
ERA    Ukraine    ERA Franchise Systems LLC    M200900156   
ERA    Ukraine    ERA Franchise Systems LLC    M201017823B   
ERA & New House Design    Ukraine    ERA Franchise Systems LLC    M200900157   
ERA & New House Design    Ukraine    ERA Franchise Systems LLC    M201017824B   
ERA    United Arab Emirates    ERA Franchise Systems, Inc.*    56947    48035
ERA    United Arab Emirates    ERA Franchise Systems, Inc.*    56948    48034
ERA    United Arab Emirates    ERA Franchise Systems LLC    148754   
ERA    United Arab Emirates    ERA Franchise Systems LLC    148755   
ERA & New House Design    United Arab Emirates    ERA Franchise Systems, Inc.*    56782    48033
ERA & New House Design    United Arab Emirates    ERA Franchise Systems, Inc.*    56783    48078
ERA & New House Design    United Arab Emirates    ERA Franchise Systems LLC    148756   
ERA & New House Design    United Arab Emirates    ERA Franchise Systems LLC    148757   
ERA    United Kingdom    ERA Franchise Systems LLC    1584675    1584675
ERA    United Kingdom    ERA Franchise Systems LLC    2165216    2165216
ERA & New House Design (color)    United Kingdom    ERA Franchise Systems LLC    2393362    2393362
ERA & New House Design (series of 3)    United Kingdom    ERA Franchise Systems LLC    2132336    2132336
1ST IN CUSTOMER SATISFACTION    United States    ERA Franchise Systems LLC    75555625    2386946
1ST IN SERVICE    United States    ERA Franchise Systems LLC    78710978    3192163
A SMARTER COMMUNITY    United States    ERA Franchise Systems LLC    85026180   
ALL YOU NEED TO KNOW    United States    ERA Franchise Systems LLC    78397567    3335898

 

II-50


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ALWAYS THERE FOR YOU    United States    ERA Franchise Systems LLC    75746258    2477197
ANSWERS    United States    ERA Franchise Systems LLC    74185466    1756219
BLUEPRINT FOR SUCCESS    United States    ERA Franchise Systems LLC    77015719    3371366
DIRECT ACCESS    United States    ERA Franchise Systems LLC    78729761    3443282
ELECTRONIC REALTY ASSOCIATES    United States    ERA Franchise Systems LLC    77367524    3621544
ERA    United States    ERA Franchise Systems LLC    73113461    1078060
ERA    United States    ERA Franchise Systems LLC    73388791    1251827
ERA    United States    ERA Franchise Systems LLC    78008652    2691643
ERA    United States    ERA Franchise Systems LLC    78599896    3073417
ERA & New House Design (black on white)    United States    ERA Franchise Systems LLC    75269373    2875845
ERA & New House Design (black on white)    United States    ERA Franchise Systems LLC    78599899    3073418
ERA & New House Design (in color)    United States    ERA Franchise Systems LLC    77093228    3316400
ERA & New House Design (white on black)    United States    ERA Franchise Systems LLC    75250116    2121860
ERA (New House Design)    United States    ERA Franchise Systems LLC    78641980    3135362
ERA 1ST IN SERVICE JIM JACKSON MEMORIAL AWARD & Design    United States    ERA Franchise Systems LLC    76284300    2594245
ERA HOME PROTECTION PLAN    United States    ERA Franchise Systems LLC    78018755    2576242
ERA POWERED    United States    ERA Franchise Systems LLC    77941481   
ERA REAL ESTATE & New House Design    United States    ERA Franchise Systems LLC    78575216    3082137
ERA REAL ESTATE HOME PROTECTION PLAN & Design    United States    ERA Franchise Systems LLC    78035233    2612765
ERA REAL ESTATE NATIONAL MILITARY BROKER NETWORK & Design    United States    ERA Franchise Systems LLC    78058980    2635317
ERA REAL ESTATE RESORT PROPERTIES INTERNATIONAL & Design    United States    ERA Franchise Systems LLC    76243766    2563583
ERA SEARCHROUTER    United States    ERA Franchise Systems LLC    78550994    3525685
ERA SELECT SERVICES    United States    ERA Franchise Systems LLC    75809994    2737148
I WILL SELL YOUR HOUSE OR ERA WILL BUY IT    United States    ERA Franchise Systems LLC    78293264    2958388

 

II-51


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

IF WE DON’T SELL YOUR HOUSE, ERA WILL BUY IT!    United States    ERA Franchise Systems LLC    74073209    1646268
IF WE DON’T SELL YOUR HOUSE, WE’LL BUY IT    United States    ERA Franchise Systems LLC    76075358    3843416
IT’S THE LITTLE THINGS WE DO    United States    ERA Franchise Systems LLC    78915320    3233314
NEW THRESHOLDS    United States    ERA Franchise Systems LLC      
NMBN    United States    ERA Franchise Systems LLC    74183282    1753385
SELLERS SECURITY    United States    ERA Franchise Systems LLC    78425874    2983252
SELLERS SECURITY (Stylized)    United States    ERA Franchise Systems LLC    73261423    1196433
SIEMPRE CONTIGO    United States    ERA Franchise Systems LLC    78445125    3080693
TEAMERA    United States    ERA Franchise Systems LLC    74073379    1645223
TOP GUN    United States    ERA Franchise Systems LLC    74153559    1757264
TOP TEAM    United States    ERA Franchise Systems LLC    76243776    2706182
VISIONS OF LUXURY    United States    ERA Franchise Systems LLC    78764214    3555334
WE WILL SELL YOUR HOUSE OR ERA WILL BUY IT    United States    ERA Franchise Systems LLC    75483140    2464187
ERA    Uruguay    ERA Franchise Systems LLC    399067   
ERA & New House Design    Uruguay    ERA Franchise Systems LLC    399066   
ERA & Old House Design    Uruguay    ERA Franchise Systems LLC    288730    288730
ERA- ELECTRONIC REALTY ASSOCIATES    Uruguay    ERA Franchise Systems, Inc.*    251848    251848
ERA    Venezuela    ERA Franchise Systems LLC    14810-09   
ERA    Venezuela    ERA Franchise Systems LLC    14812-09   
ERA & New House Design    Venezuela    ERA Franchise Systems LLC    14809-09   
ERA & New House Design    Venezuela    ERA Franchise Systems LLC    14811-09   
ERA    Viet Nam    ERA Franchise Systems LLC    43364    38625
ERA & New House Design (black on white)    Viet Nam    ERA Franchise Systems LLC    43365    38627
ERA    Virgin Islands (British)    ERA Franchise Systems, Inc.*    1684    1684
ERA & New House Design (series of 3)    Virgin Islands (British)    ERA Franchise Systems, Inc.*    1685    1685

 

II-52


* ERA Franchise Systems, Inc. converted its entity type and name to ERA Franchise Systems LLC on July 2, 2007. The recordal of that change is being instructed as renewals or other actions are taken.

Coldwell Banker Real Estate LLC

Trademark Applications and Registrations

 

Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

@ Symbol & Stick Man Design    United States    COLDWELL BANKER REAL ESTATE LLC    78578972    3063270
BLUE EDGE REALTY    United States    COLDWELL BANKER REAL ESTATE LLC    78029778    2605955
BLUE MATTER    United States    COLDWELL BANKER REAL ESTATE LLC    77948751    3860242
BLUESCAPE    United States    COLDWELL BANKER REAL ESTATE LLC    77773000    3857933
CB & Design    United States    COLDWELL BANKER REAL ESTATE LLC    73210971    1153366
CB COLDWELL BANKER COMMERCIAL & Design    United States    COLDWELL BANKER REAL ESTATE LLC    78655402    3179803
CBC    United States    COLDWELL BANKER REAL ESTATE LLC    78235734    3030080
CEO SERIES & Design    United States    COLDWELL BANKER REAL ESTATE LLC    78330003    3038517
COLDWELL BANKER    United States    COLDWELL BANKER REAL ESTATE LLC    75152362    2057608
COLDWELL BANKER    United States    COLDWELL BANKER REAL ESTATE LLC    73211116    1154155
COLDWELL BANKER    United States    COLDWELL BANKER REAL ESTATE LLC    78008563    2453334
COLDWELL BANKER    United States    COLDWELL BANKER REAL ESTATE LLC    78655395    3100659
COLDWELL BANKER CB & Design    United States    COLDWELL BANKER REAL ESTATE LLC    75152363    2059501
COLDWELL BANKER CB & Design    United States    COLDWELL BANKER REAL ESTATE LLC    73346790    1215241
COLDWELL BANKER CB & Design    United States    COLDWELL BANKER REAL ESTATE LLC    78655400    3179802
COLDWELL BANKER CB & Design HOME LOANS    United States    COLDWELL BANKER REAL ESTATE LLC    77870433    3810666
COLDWELL BANKER CB & Design MORTGAGE    United States    COLDWELL BANKER REAL ESTATE LLC    77870426    3810664
COLDWELL BANKER COMMERCIAL    United States    COLDWELL BANKER REAL ESTATE LLC    75120713    2059364
COLDWELL BANKER COMMERCIAL    United States    COLDWELL BANKER REAL ESTATE LLC    73787763    1598908
COLDWELL BANKER COMMERCIAL    United States    COLDWELL BANKER REAL ESTATE LLC    78655398    3254878
COLDWELL BANKER COMMERCIAL CB & Design    United States    COLDWELL BANKER REAL ESTATE LLC    78080719    2745034

 

II-53


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER COMMERCIAL MARKETCONNECT & Design    United States    COLDWELL BANKER REAL ESTATE LLC    78677295    3191841
COLDWELL BANKER CONCIERGE    United States    COLDWELL BANKER REAL ESTATE LLC    75630167    2576448
COLDWELL BANKER CONCIERGE    United States    COLDWELL BANKER REAL ESTATE LLC    75588856    2472004
COLDWELL BANKER ON LOCATION    United States    COLDWELL BANKER REAL ESTATE LLC    77721965    3786028
COLDWELL BANKER PREVIEWS INTERNATIONAL    United States    COLDWELL BANKER REAL ESTATE LLC    78032990    2529955
COLDWELL BANKER PREVIEWS INTERNATIONAL    United States    COLDWELL BANKER REAL ESTATE LLC    78655389    3093311
COLDWELL BANKER PREVIEWS INTERNATIONAL & Design    United States    COLDWELL BANKER REAL ESTATE LLC    78655792    3093312
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    United States    COLDWELL BANKER REAL ESTATE LLC    78638810    3170029
COLDWELL BANKER UNIVERSITY    United States    COLDWELL BANKER REAL ESTATE LLC    74425646    1842126
COLDWELL BANKER UNIVERSITY & Cap in Circle Design    United States    COLDWELL BANKER REAL ESTATE LLC    85179678   
COLDWELL BANKER UNIVERSITY & New Seal Design    United States    COLDWELL BANKER REAL ESTATE LLC    78783829    3231639
COLDWELL BANKER UNIVERSITY & Old Book, Seal Design    United States    COLDWELL BANKER REAL ESTATE LLC    74421411    1876968
GENERATION BLUE    United States    COLDWELL BANKER REAL ESTATE LLC    85179695   
GENERATION BLUE    United States    COLDWELL BANKER REAL ESTATE LLC    85179686   
GENERATION BLUE EXPERIENCE    United States    COLDWELL BANKER REAL ESTATE LLC    85179682   
GUARDIAN    United States    COLDWELL BANKER REAL ESTATE LLC    74102195    1823333
HELPING OTHERS THROUGHOUT THE HOLIDAY SEASON    United States    COLDWELL BANKER REAL ESTATE LLC    74561955    1959391
MARKETCONNECT    United States    COLDWELL BANKER REAL ESTATE LLC    78677274    3260105
PERSONAL RETRIEVER    United States    COLDWELL BANKER REAL ESTATE LLC    75380191    2235393
PERSONAL RETRIEVER Sign Rider Design    United States    COLDWELL BANKER REAL ESTATE LLC    78182148    3102893
PRESERVING THE TRUST    United States    COLDWELL BANKER REAL ESTATE LLC    74393851    1823177
PREVIEWS    United States    COLDWELL BANKER REAL ESTATE LLC    78768439    3219716
PREVIEWS (Stylized)    United States    COLDWELL BANKER REAL ESTATE LLC    71620930    565757
WE NEVER STOP MOVING    United States    COLDWELL BANKER REAL ESTATE LLC    77210512    3577104
YOUR PERFECT PARTNER    United States    COLDWELL BANKER REAL ESTATE LLC    78278195    2865193

 

II-54


Oncor International LLC

Trademark Applications and Registrations

 

Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ONCOR    Argentina    ONCOR International LLC    2783218    2256909
ONCOR INTERNATIONAL    Argentina    ONCOR International LLC    2820206    2317063
ONCOR    Austria    ONCOR International LLC    AM1732/91    138698
ONCOR    Benelux    ONCOR International LLC    0762072    494820
ONCOR    Canada    ONCOR International LLC    0679560    TMA 402851
ONCOR INTERNATIONAL    Canada    ONCOR International LLC    1399319    TMA 763816
ONCOR INTERNATIONAL    Chile    ONCOR International LLC    825414    859642
ONCOR INTERNATIONAL    China (People’s Republic)    ONCOR International LLC    6789536    6789536
ONCOR    Denmark    ONCOR International LLC    VA025851991    VR 1992-2228
ONCOR INTERNATIONAL    European Community    ONCOR International LLC    006559637    006559637
ONCOR    France    ONCOR International LLC    279319    1654955
ONCOR INTERNATIONAL    Georgia    ONCOR International LLC    AM 048108    M19614
ONCOR    Germany    ONCOR International LLC    014895/36    2014339
ONCOR INTERNATIONAL    India    ONCOR International LLC    1682282   
ONCOR INTERNATIONAL    Mexico    ONCOR International LLC    942988    1100658
ONCOR    Moldova    ONCOR International LLC    021830    17143
ONCOR INTERNATIONAL    Moldova    ONCOR International LLC    023396    18736
ONCOR INTERNATIONAL    Norway    ONCOR International LLC    200805303    247077
ONCOR    Romania    ONCOR International LLC    M200706879    87353
ONCOR INTERNATIONAL    Russian Federation    ONCOR International LLC    2008712902    389853
ONCOR INTERNATIONAL    South Africa    ONCOR International LLC    2008/09394   
ONCOR    Spain    ONCOR International LLC    1629294    1690794
ONCOR    Switzerland    ONCOR International LLC    51639/2007    557214
ONCOR INTERNATIONAL    Switzerland    ONCOR International LLC    55412 2008    584573
ONCOR INTERNATIONAL    Turkey    ONCOR International LLC    37314    2008/37314
ONCOR INTERNATIONAL    Ukraine    ONCOR International LLC    m200811768    119318
ONCOR    United Kingdom    ONCOR International LLC    1460939    1460939
ONCOR    United States    ONCOR International LLC    74106241    1702621
ONCOR INTERNATIONAL & Design    United States    ONCOR International LLC    74172070    1703690
ONCOR Logo    United States    ONCOR International LLC    78372985    2966768

 

II-55


Coldwell Banker LLC

Trademark Applications and Registrations

 

Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER    Albania    Coldwell Banker Corporation*    AL-M-05-00353    10833
COLDWELL BANKER CB & Design    Albania    Coldwell Banker Corporation*    AL-M-05-00356    10839
COLDWELL BANKER COMMERCIAL    Albania    Coldwell Banker Corporation*    AL-M-05-00355    10838
COLDWELL BANKER PREVIEWS INTERNATIONAL    Albania    Coldwell Banker Corporation*    AL-M-05-00354    10837
COLDWELL BANKER    Algeria    Coldwell Banker Corporation*    051140    068967
COLDWELL BANKER CB & Design    Algeria    Coldwell Banker Corporation*    051143    068970
COLDWELL BANKER COMMERCIAL    Algeria    Coldwell Banker Corporation*    051141    068968
COLDWELL BANKER PREVIEWS INTERNATIONAL    Algeria    Coldwell Banker Corporation*    051142    068969
COLDWELL BANKER    Andorra    Coldwell Banker LLC    014021    14021
COLDWELL BANKER CB & Design    Andorra    Coldwell Banker LLC    014022    14022
COLDWELL BANKER COMMERCIAL    Andorra    Coldwell Banker LLC    014019    14019
COLDWELL BANKER PREVIEWS    Andorra    Coldwell Banker LLC    014020    14020
COLDWELL BANKER    Anguilla    Coldwell Banker LLC       2912
COLDWELL BANKER CB & Design    Anguilla    Coldwell Banker LLC       2911
COLDWELL BANKER COMMERCIAL & Design    Anguilla    Coldwell Banker LLC       3014
COLDWELL BANKER    Antigua and Barbuda    Coldwell Banker Corporation*    5192    5192
COLDWELL BANKER CB & Design    Antigua and Barbuda    Coldwell Banker Corporation*    5202    5202
COLDWELL BANKER CB & Design    Antigua and Barbuda    Coldwell Banker LLC    NA    5105
COLDWELL BANKER COMMERCIAL & Design    Antigua and Barbuda    Coldwell Banker LLC    2238    2238
COLDWELL BANKER PREVIEWS    Antigua and Barbuda    Coldwell Banker LLC    2130    2130
COLDWELL BANKER    Argentina    Coldwell Banker Corporation*    2925022   
COLDWELL BANKER    Argentina    Coldwell Banker Corporation*    2925023   
COLDWELL BANKER CB & Design    Argentina    Coldwell Banker LLC    2800741    2269123
COLDWELL BANKER CB & Design    Argentina    Coldwell Banker LLC    2800742    2269124
COLDWELL BANKER COMMERCIAL    Argentina    Coldwell Banker LLC    2952537    2386226
COLDWELL BANKER COMMERCIAL    Argentina    Coldwell Banker LLC    2952538    2386227
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Argentina    Coldwell Banker LLC    2952539    2386229
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Argentina    Coldwell Banker LLC    2952540    2386230

 

II-56


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELLBANKER.COM.AR    Argentina    Coldwell Banker LLC      
COLDWELL BANKER    Aruba    Coldwell Banker LLC       18942
COLDWELL BANKER CB & Design    Aruba    Coldwell Banker LLC       18943
COLDWELL BANKER COMMERCIAL    Aruba    Coldwell Banker LLC       19673
COLDWELL BANKER PREVIEWS    Aruba    Coldwell Banker LLC       18897
CB & Design    Australia    Coldwell Banker LLC    366321    366321
CB & Design    Australia    Coldwell Banker LLC    366323    366323
CB & Design    Australia    Coldwell Banker LLC    574981    574981
COLDWELL BANKER    Australia    Coldwell Banker LLC    1001041    1001041
COLDWELL BANKER    Australia    Coldwell Banker LLC    485910    485910
COLDWELL BANKER    Australia    Coldwell Banker LLC    574983    574983
COLDWELL BANKER    Australia    Coldwell Banker LLC    726957    726957
COLDWELL BANKER    Australia    Coldwell Banker LLC    727940    727940
COLDWELL BANKER CB & Design    Australia    Coldwell Banker LLC    575125    575125
COLDWELL BANKER COMMERCIAL    Australia    Coldwell Banker LLC    574982    574982
COLDWELL BANKER COMMERCIAL & Design    Australia    Coldwell Banker LLC    485909    485909
COLDWELL BANKER COMMERCIAL & Design    Australia    Coldwell Banker LLC    574980    574980
COLDWELL BANKER PREVIEWS    Australia    Coldwell Banker LLC    784897    784897
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Australia    Coldwell Banker LLC    1084094    1084094
COLDWELL MORTGAGE    Australia    Coldwell Banker LLC    1001042    1001042
COLDWELL BANKER    Austria    Coldwell Banker LLC    4675/98    179094
COLDWELL BANKER CB & Design    Austria    Coldwell Banker LLC    126821    126821
COLDWELL BANKER CB & Design    Austria    Coldwell Banker LLC    4678/98    179097
COLDWELL BANKER COMMERCIAL    Austria    Coldwell Banker LLC    4676/98    179095
COLDWELL BANKER COMMERCIAL    Austria    Coldwell Banker LLC    896621    896621
COLDWELL BANKER PREVIEWS    Austria    Coldwell Banker LLC    4677/98    179096
COLDWELL BANKER PREVIEWS    Austria    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Austria    Coldwell Banker LLC    004725041    004725041
CB & Design    Bahamas    Coldwell Banker Corporation*    10778    10778
COLDWELL BANKER CB & Design    Bahamas    Coldwell Banker Corporation*    10777    10777
COLDWELL BANKER COMMERCIAL    Bahamas    Coldwell Banker Corporation*    20763    20763
COLDWELL BANKER PREVIEWS    Bahamas    Coldwell Banker Corporation*    20247    20247
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Bahamas    Coldwell Banker Corporation*    28828   
COLDWELL BANKER    Bahrain    Coldwell Banker Corporation*    5051    5051

 

II-57


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER CB & Design    Bahrain    Coldwell Banker Corporation*    5052    5052
COLDWELL BANKER COMMERCIAL    Bahrain    Coldwell Banker Corporation*    5053    5053
COLDWELL BANKER COMMERCIAL CB & Design    Bahrain    Coldwell Banker Corporation*    39877    39877
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Bahrain    Coldwell Banker Corporation*    48487    48487
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Bahrain    Coldwell Banker Corporation*    48488    48488
COLDWELL BANKER    Barbados    Coldwell Banker LLC    81/8844    81/8844
COLDWELL BANKER    Barbados    Coldwell Banker LLC    81/8845    81/8845
COLDWELL BANKER CB & Design    Barbados    Coldwell Banker LLC    81/11687    81/11687
COLDWELL BANKER CB & Design    Barbados    Coldwell Banker LLC    81/11688    81/11688
COLDWELL BANKER COMMERCIAL    Barbados    Coldwell Banker LLC    81/13146    81/13146
COLDWELL BANKER COMMERCIAL    Barbados    Coldwell Banker LLC    81/13147    81/13147
COLDWELL BANKER PREVIEWS    Barbados    Coldwell Banker LLC    81/10083    81/10083
COLDWELL BANKER PREVIEWS    Barbados    Coldwell Banker LLC    81/10084    81/10084
COLDWELL BANKER    Belarus    Coldwell Banker LLC    20052603    27735
COLDWELL BANKER CB & Design    Belarus    Coldwell Banker LLC    20052604    27736
COLDWELL BANKER COMMERCIAL    Belarus    Coldwell Banker LLC    20052605    27737
COLDWELL BANKER PREVIEWS INTERNATIONAL    Belarus    Coldwell Banker LLC    20052606    27738
COLDWELL BANKER    Belize    Coldwell Banker LLC    5233    5233.08
COLDWELL BANKER    Belize    Coldwell Banker LLC    5235    5235.08
COLDWELL BANKER CB & Design    Belize    Coldwell Banker LLC       8007
COLDWELL BANKER COMMERCIAL    Belize    Coldwell Banker LLC    5231    5231.08
COLDWELL BANKER COMMERCIAL CB & Design    Belize    Coldwell Banker LLC    5232    5232.08
COLDWELL BANKER COMMERCIAL CB & Design    Belize    Coldwell Banker LLC    5234    5234.08
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Belize    Coldwell Banker LLC    5230    5230.08
CB & Design    Benelux    Coldwell Banker LLC    47243    383644
COLDWELL BANKER    Benelux    Coldwell Banker LLC    067090    462767
COLDWELL BANKER    Benelux    Coldwell Banker LLC    47244    383645
COLDWELL BANKER CB & Design    Benelux    Coldwell Banker LLC    126821    126821
COLDWELL BANKER COMMERCIAL    Benelux    Coldwell Banker LLC    896621    896621
COLDWELL BANKER COMMERCIAL & Design    Benelux    Coldwell Banker LLC    067091    463574
COLDWELL BANKER MAKELAARS & Design    Benelux    Coldwell Banker LLC    0980610    0692777
COLDWELL BANKER PREVIEWS    Benelux    Coldwell Banker LLC    685040    685040

 

II-58


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER PREVIEWS    Benelux    Coldwell Banker LLC    904394    621373
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Benelux    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    Bermuda    Coldwell Banker LLC    28879    28879
COLDWELL BANKER    Bermuda    Coldwell Banker LLC    28880    28880
COLDWELL BANKER CB & Design    Bermuda    Coldwell Banker LLC    28881    28881
COLDWELL BANKER CB & Design    Bermuda    Coldwell Banker LLC    28882    28882
COLDWELL BANKER COMMERCIAL    Bermuda    Coldwell Banker LLC    29771    29771
COLDWELL BANKER COMMERCIAL    Bermuda    Coldwell Banker LLC    29772    29772
COLDWELL BANKER PREVIEWS    Bermuda    Coldwell Banker LLC    29302    29302
COLDWELL BANKER PREVIEWS    Bermuda    Coldwell Banker LLC    29303    29303
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Bermuda    Coldwell Banker LLC    45008    45008
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Bermuda    Coldwell Banker LLC    45009    45009
COLDWELL BANKER    Bolivia    Coldwell Banker LLC       78855
COLDWELL BANKER    Bolivia    Coldwell Banker LLC       78854
COLDWELL BANKER CB & Design    Bolivia    Coldwell Banker LLC       78807
COLDWELL BANKER CB & Design    Bolivia    Coldwell Banker LLC       78890
COLDWELL BANKER COMMERCIAL    Bolivia    Coldwell Banker LLC       78852
COLDWELL BANKER COMMERCIAL    Bolivia    Coldwell Banker LLC       78853
COLDWELL BANKER PREVIEWS    Bolivia    Coldwell Banker LLC       78741
COLDWELL BANKER PREVIEWS    Bolivia    Coldwell Banker LLC       78856
COLDWELL BANKER    Bosnia and Herzegovina    Coldwell Banker LLC    BAZ059310A    BAZ059310
COLDWELL BANKER CB & Design    Bosnia and Herzegovina    Coldwell Banker LLC    BAZ059311A    BAZ059311
COLDWELL BANKER COMMERCIAL    Bosnia and Herzegovina    Coldwell Banker LLC    BAZ059312A    BAZ059312
COLDWELL BANKER PREVIEWS INTERNATIONAL    Bosnia and Herzegovina    Coldwell Banker LLC    BAZ059313A    BAZ059313
COLDWELL BANKER    Brazil    Coldwell Banker Corporation*    819804479    819804479
COLDWELL BANKER    Brazil    Coldwell Banker Corporation*    819804495    819804495
COLDWELL BANKER    Brazil    Coldwell Banker Corporation*    824021568   
COLDWELL BANKER CB & Design    Brazil    Coldwell Banker Corporation*    819804487    819804487
COLDWELL BANKER CB & Design    Brazil    Coldwell Banker Corporation*    819804509    819804509
COLDWELL BANKER CB & Design    Brazil    Coldwell Banker Corporation*    824021550    824021550
COLDWELL BANKER COMMERCIAL    Brazil    Coldwell Banker Corporation*    821405527    821405527

 

II-59


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER COMMERCIAL    Brazil    Coldwell Banker Corporation*    821405535    821405535
COLDWELL BANKER PREVIEWS    Brazil    Coldwell Banker Corporation*    821405543    821405543
COLDWELL BANKER PREVIEWS    Brazil    Coldwell Banker Corporation*    821405551    821405551
COLDWELLBANKER.COM.BR    Brazil    Coldwell Banker Corporation*      
COLDWELL BANKER    Bulgaria    Coldwell Banker LLC    115591   
COLDWELL BANKER    Bulgaria    Coldwell Banker LLC    79651    59664
COLDWELL BANKER CB & Design    Bulgaria    Coldwell Banker LLC    115592   
COLDWELL BANKER CB & Design    Bulgaria    Coldwell Banker LLC    79650    59663
COLDWELL BANKER COMMERCIAL    Bulgaria    Coldwell Banker LLC    115590   
COLDWELL BANKER COMMERCIAL    Bulgaria    Coldwell Banker LLC    79652    59665
COLDWELL BANKER PREVIEWS INTERNATIONAL    Bulgaria    Coldwell Banker LLC    79649    59662
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Bulgaria    Coldwell Banker LLC    115589   
@ HOME    Canada    Coldwell Banker LLC    1480612   
BEST BUYER HOME FACTS    Canada    Coldwell Banker LLC    766627    458949
BEST SELLER    Canada    Coldwell Banker LLC    700941    458215
BLUE RIBBON AWARD    Canada    Coldwell Banker LLC    653358    403169
CB & Design    Canada    Coldwell Banker LLC    475816    288117
CELEBRATE CANADA WITH COLDWELL BANKER & Design    Canada    Coldwell Banker LLC    760138    476847
COLDWELL BANKER    Canada    Coldwell Banker LLC    475815    305849
COLDWELL BANKER CB & Design    Canada    Coldwell Banker LLC    524800    348510
COLDWELL BANKER COMMERCIAL    Canada    Coldwell Banker LLC    628871    397708
COLDWELL BANKER COMMERCIAL & Design    Canada    Coldwell Banker LLC    873439    539972
COLDWELL BANKER COMMERCIAL CB & Design    Canada    Coldwell Banker LLC    1,007,132    562602
COLDWELL BANKER CONCIERGE    Canada    Coldwell Banker LLC    1021982    564894
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Canada    Coldwell Banker LLC    1276998    723084
EXPECT THE BEST    Canada    Coldwell Banker LLC    597708    387686
INTERNATIONAL RESORT PROPERTY NETWORK    Canada    Coldwell Banker LLC    700189    466679
PREVIEWS    Canada    Coldwell Banker LLC    516910    312761
PREVIEWS    Canada    Coldwell Banker LLC    641461    405992
RELOCATION 1 (Stylized)    Canada    Coldwell Banker LLC    689511    425530
SUPPORT YOU CAN COUNT ON    Canada    Coldwell Banker LLC    776075    497595
SUPPORT YOU CAN COUNT ON & Design    Canada    Coldwell Banker LLC    776074    497604
ULTIMATE SERVICE    Canada    Coldwell Banker LLC    837398    493320

 

II-60


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

ULTIMATE SERVICE & Color Design    Canada    Coldwell Banker LLC    837399    493319
ULTIMATE SERVICE & Design    Canada    Coldwell Banker LLC    837397    493322
YOUR PASSPORT TO INDEPENDENCE    Canada    Coldwell Banker LLC    726806    464650
YOUR PASSPORT TO INDEPENDENCE & Design    Canada    Coldwell Banker LLC    726807    464651
COLDWELL BANKER    Cayman Islands    Coldwell Banker LLC       1346215
COLDWELL BANKER CB & Design    Cayman Islands    Coldwell Banker LLC       1273340
COLDWELL BANKER COMMERCIAL & Design    Cayman Islands    Coldwell Banker LLC       1346216
COLDWELL BANKER PREVIEWS    Cayman Islands    Coldwell Banker LLC       2150408
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design (in series)    Cayman Islands    Coldwell Banker Corporation*    2405562    2405562
COLDWELL BANKER    Chile    Coldwell Banker LLC    364.683    798619
COLDWELL BANKER    Chile    Coldwell Banker LLC    436.731    867243
COLDWELL BANKER CB & Design    Chile    Coldwell Banker LLC    361.092    798620
COLDWELL BANKER CB & Design    Chile    Coldwell Banker LLC    436.732    867248
COLDWELL BANKER COMMERCIAL    Chile    Coldwell Banker LLC    436.727    867247
COLDWELL BANKER COMMERCIAL    Chile    Coldwell Banker LLC    436.728    867246
COLDWELL BANKER PREVIEWS    Chile    Coldwell Banker LLC    436.729    867245
COLDWELL BANKER PREVIEWS    Chile    Coldwell Banker LLC    436.730    867244
COLDWELL BANKER    China (People’s Republic)    Coldwell Banker LLC    93068431    779263
COLDWELL BANKER    China (People’s Republic)    Coldwell Banker LLC    940002713    508584
COLDWELL BANKER CB & Design    China (People’s Republic)    Coldwell Banker LLC    9306842    779264
COLDWELL BANKER COMMERCIAL    China (People’s Republic)    Coldwell Banker LLC    8903351    508583
COLDWELL BANKER COMMERCIAL    China (People’s Republic)    Coldwell Banker LLC    9900020454    1487631
COLDWELL BANKER PREVIEWS    China (People’s Republic)    Coldwell Banker LLC    9900020455    1487632
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    China (People’s Republic)    Coldwell Banker LLC    4991660    4991660
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    China (People’s Republic)    Coldwell Banker LLC    4991661   
COLDWELL BANKER    Colombia    Coldwell Banker LLC    96 058578    201244
COLDWELL BANKER    Colombia    Coldwell Banker LLC    96 058579    200927
COLDWELL BANKER CB & Design    Colombia    Coldwell Banker LLC    96 058580    200951
COLDWELL BANKER CB & Design    Colombia    Coldwell Banker LLC    96 058581    200508
COLDWELL BANKER COMMERCIAL    Colombia    Coldwell Banker LLC    98 075970    226225
COLDWELL BANKER COMMERCIAL    Colombia    Coldwell Banker LLC    98 075971    226236
COLDWELL BANKER PREVIEWS    Colombia    Coldwell Banker LLC    98 075972    226235

 

II-61


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER PREVIEWS    Colombia    Coldwell Banker LLC    98 075973    226234
COLDWELL BANKER    Costa Rica    Coldwell Banker LLC       111085
COLDWELL BANKER    Costa Rica    Coldwell Banker LLC       111083
COLDWELL BANKER CB & Design    Costa Rica    Coldwell Banker LLC       111106
COLDWELL BANKER CB & Design    Costa Rica    Coldwell Banker LLC       111986
COLDWELL BANKER COMMERCIAL    Costa Rica    Coldwell Banker LLC       111086
COLDWELL BANKER COMMERCIAL    Costa Rica    Coldwell Banker LLC       111088
COLDWELL BANKER PREVIEWS    Costa Rica    Coldwell Banker LLC       111087
COLDWELL BANKER PREVIEWS    Costa Rica    Coldwell Banker LLC       111084
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Costa Rica    Coldwell Banker LLC    0005958    165288
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Costa Rica    Coldwell Banker LLC    0005959    165450
COLDWELL BANKER    Croatia    Coldwell Banker Corporation*    Z20051853A    Z20051853
COLDWELL BANKER CB & Design    Croatia    Coldwell Banker Corporation*    Z20051854A    Z20051854
COLDWELL BANKER COMMERCIAL    Croatia    Coldwell Banker Corporation*    Z20051855A    Z20051855
COLDWELL BANKER PREVIEWS INTERNATIONAL    Croatia    Coldwell Banker Corporation*    Z20051856A    Z20051856
COLDWELL BANKER    Cyprus, Republic of    Coldwell Banker Corporation*    50979    50979
COLDWELL BANKER    Cyprus, Republic of    Coldwell Banker Corporation*    50980    50980
COLDWELL BANKER CB & Design    Cyprus, Republic of    Coldwell Banker Corporation*    50981    50981
COLDWELL BANKER CB & Design    Cyprus, Republic of    Coldwell Banker Corporation*    50982    50982
COLDWELL BANKER CB & Design    Cyprus, Republic of    Coldwell Banker LLC    126821    126821
COLDWELL BANKER COMMERCIAL    Cyprus, Republic of    Coldwell Banker Corporation*    50983    50983
COLDWELL BANKER COMMERCIAL    Cyprus, Republic of    Coldwell Banker Corporation*    50984    50984
COLDWELL BANKER COMMERCIAL    Cyprus, Republic of    Coldwell Banker LLC    896621    896621
COLDWELL BANKER PREVIEWS    Cyprus, Republic of    Coldwell Banker Corporation*    50985    50985
COLDWELL BANKER PREVIEWS    Cyprus, Republic of    Coldwell Banker Corporation*    50986    50986
COLDWELL BANKER PREVIEWS    Cyprus, Republic of    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Cyprus, Republic of    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    Czech Republic    Coldwell Banker LLC    155320    235825
COLDWELL BANKER CB & Design    Czech Republic    Coldwell Banker LLC    126821    126821
COLDWELL BANKER COMMERCIAL    Czech Republic    Coldwell Banker LLC    896621    896621

 

II-62


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER PREVIEWS    Czech Republic    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Czech Republic    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    Denmark    Coldwell Banker LLC    06134/1998    VR 1999 02179
COLDWELL BANKER CB & Design    Denmark    Coldwell Banker LLC    01635/98    VR 1999 02180
COLDWELL BANKER CB & Design    Denmark    Coldwell Banker LLC    126821    126821
COLDWELL BANKER COMMERCIAL    Denmark    Coldwell Banker LLC    01632/98    VR 1999 02177
COLDWELL BANKER COMMERCIAL    Denmark    Coldwell Banker LLC    896621    896621
COLDWELL BANKER PREVIEWS    Denmark    Coldwell Banker LLC    01633/98    VR 1999 02178
COLDWELL BANKER PREVIEWS    Denmark    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Denmark    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    Dominica    Coldwell Banker Corporation*    5/99    5/99
COLDWELL BANKER CB & Design    Dominica    Coldwell Banker Corporation*    4/99    4/99
COLDWELL BANKER COMMERCIAL & Design    Dominica    Coldwell Banker Corporation*    2/99    2/99
COLDWELL BANKER PREVIEWS    Dominica    Coldwell Banker Corporation*    3/99    3/99
COLDWELL BANKER    Dominican Republic    Coldwell Banker Corporation*    363968    0093287
COLDWELL BANKER CB & Design    Dominican Republic    Coldwell Banker Corporation*    99146747    93,286
COLDWELL BANKER COMMERCIAL    Dominican Republic    Coldwell Banker Corporation*       99,423
COLDWELL BANKER COMMERCIAL    Dominican Republic    Coldwell Banker Corporation*       98,889
COLDWELL BANKER PREVIEWS    Dominican Republic    Coldwell Banker Corporation*    49664    95,525
COLDWELL BANKER PREVIEWS    Dominican Republic    Coldwell Banker Corporation*    49668    95,526
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Dominican Republic    Coldwell Banker Corporation*    05073399    2005-73399
COLDWELL BANKER    Ecuador    Coldwell Banker LLC    92102    66
COLDWELL BANKER    Ecuador    Coldwell Banker LLC    92103    65
COLDWELL BANKER CB & Design    Ecuador    Coldwell Banker LLC    92104    64
COLDWELL BANKER CB & Design    Ecuador    Coldwell Banker LLC    92105    63
COLDWELL BANKER COMMERCIAL    Ecuador    Coldwell Banker LLC    92106    61
COLDWELL BANKER COMMERCIAL    Ecuador    Coldwell Banker LLC    92107    62
COLDWELL BANKER PREVIEWS    Ecuador    Coldwell Banker LLC    92100    68
COLDWELL BANKER PREVIEWS    Ecuador    Coldwell Banker LLC    92101    67
COLDWELL BANKER    Egypt    Coldwell Banker LLC    127339    127339
COLDWELL BANKER CB & Design    Egypt    Coldwell Banker LLC    127340    127340

 

II-63


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER COMMERCIAL    Egypt    Coldwell Banker LLC    127337    127337
COLDWELL BANKER PREVIEWS    Egypt    Coldwell Banker LLC    127338    127338
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Egypt    Coldwell Banker LLC    180510    180510
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Egypt    Coldwell Banker LLC    180511    180511
COLDWELL BANKER    El Salvador    Coldwell Banker LLC    1678-98    38 BOOK 112
COLDWELL BANKER    El Salvador    Coldwell Banker LLC    1679-98    35 BOOK 109
COLDWELL BANKER CB & Design    El Salvador    Coldwell Banker LLC    1697-98    241 BOOK 121
COLDWELL BANKER CB & Design    El Salvador    Coldwell Banker LLC    1698-98    167 BOOK 127
COLDWELL BANKER COMMERCIAL    El Salvador    Coldwell Banker LLC    1699-98    125 BOOK 112
COLDWELL BANKER COMMERCIAL    El Salvador    Coldwell Banker LLC    1700-98    135 BOOK 112
COLDWELL BANKER PREVIEWS    El Salvador    Coldwell Banker LLC    1680-98    124 BOOK 112
COLDWELL BANKER PREVIEWS    El Salvador    Coldwell Banker LLC    1701-98    225 BOOK 111
COLDWELL BANKER    Estonia    Coldwell Banker LLC    9801766    31481
COLDWELL BANKER CB & Design    Estonia    Coldwell Banker LLC    126821    126821
COLDWELL BANKER CB & Design    Estonia    Coldwell Banker LLC    9801767    31482
COLDWELL BANKER COMMERCIAL    Estonia    Coldwell Banker LLC    896621    896621
COLDWELL BANKER COMMERCIAL    Estonia    Coldwell Banker LLC    9801768    31483
COLDWELL BANKER PREVIEWS    Estonia    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS    Estonia    Coldwell Banker LLC    9801769    31484
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Estonia    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    European Community    Coldwell Banker LLC    129197    129197
COLDWELL BANKER CB & Design    European Community    Coldwell Banker LLC    126821    126821
COLDWELL BANKER COMMERCIAL    European Community    Coldwell Banker LLC    896621    896621
COLDWELL BANKER COMMERCIAL CB & Design    European Community    Coldwell Banker LLC    5237029    5237029
COLDWELL BANKER PREVIEWS    European Community    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    European Community    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER WE NEVER STOP MOVING    European Community    Coldwell Banker LLC    008689201    008689201
COLDWELL BANKER YOUR PERFECT PARTNER    European Community    Coldwell Banker LLC    008688855    008688855
COLDWELL BANKER    Fiji    Coldwell Banker Corporation*    268/98    268/98
COLDWELL BANKER CB & Design    Fiji    Coldwell Banker Corporation*    269/98    269/98
COLDWELL BANKER COMMERCIAL    Fiji    Coldwell Banker Corporation*    271/98    271/98

 

II-64


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER PREVIEWS    Fiji    Coldwell Banker Corporation*    270/98    270/98
COLDWELL BANKER    Finland    Coldwell Banker LLC    T199802570    214283
COLDWELL BANKER CB & Design    Finland    Coldwell Banker LLC    126821    126821
COLDWELL BANKER CB & Design    Finland    Coldwell Banker LLC    T199802571    216563
COLDWELL BANKER COMMERCIAL    Finland    Coldwell Banker LLC    896621    896621
COLDWELL BANKER COMMERCIAL    Finland    Coldwell Banker LLC    T199802572    214284
COLDWELL BANKER PREVIEWS    Finland    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS    Finland    Coldwell Banker LLC    T199802573    214285
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Finland    Coldwell Banker LLC    004725041    004725041
CB & Design    France    Coldwell Banker LLC       1205212
COLDWELL BANKER    France    Coldwell Banker LLC    631430    1205213
COLDWELL BANKER CB & Design    France    Coldwell Banker LLC    126821    126821
COLDWELL BANKER COMMERCIAL    France    Coldwell Banker LLC    896621    896621
COLDWELL BANKER COMMERCIAL    France    Coldwell Banker LLC    98765497    98765497
COLDWELL BANKER COMMERCIAL & Design    France    Coldwell Banker LLC    129049    1528876
COLDWELL BANKER IMMOBILIER & Design    France    Coldwell Banker LLC    00306099    00306099
COLDWELL BANKER PREVIEWS    France    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS    France    Coldwell Banker LLC    97703392    97703392
COLDWELL BANKER PREVIEWS    France    Coldwell Banker LLC    97703397    97703397
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    France    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    Georgia    Coldwell Banker Corporation*    34736    16868
COLDWELL BANKER CB & Design    Georgia    Coldwell Banker Corporation*    34739    16871
COLDWELL BANKER COMMERCIAL    Georgia    Coldwell Banker Corporation*    34737    16869
COLDWELL BANKER PREVIEWS INTERNATIONAL    Georgia    Coldwell Banker Corporation*    34738    16870
COLDWELL    Germany    Coldwell Banker LLC    C41 447/36Wz    2021170
COLDWELL BANKER    Germany    Coldwell Banker LLC    398 21 061.6    398 21 061
COLDWELL BANKER CB & Design    Germany    Coldwell Banker LLC    126821    126821
COLDWELL BANKER CB & Design    Germany    Coldwell Banker LLC    398 21 062.4    298 21 062
COLDWELL BANKER COMMERCIAL    Germany    Coldwell Banker LLC    398 21 063.2    398 21 063
COLDWELL BANKER COMMERCIAL    Germany    Coldwell Banker LLC    896621    896621
COLDWELL BANKER PREVIEWS    Germany    Coldwell Banker LLC    398 21 064.0    398 21 064
COLDWELL BANKER PREVIEWS    Germany    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Germany    Coldwell Banker LLC    004725041    004725041

 

II-65


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER    Ghana    Coldwell Banker LLC      
COLDWELL BANKER    Ghana    Coldwell Banker LLC      
COLDWELL BANKER CB & Design    Ghana    Coldwell Banker LLC      
COLDWELL BANKER CB & Design    Ghana    Coldwell Banker LLC      
COLDWELL BANKER COMMERCIAL    Ghana    Coldwell Banker LLC      
COLDWELL BANKER COMMERCIAL    Ghana    Coldwell Banker LLC      
COLDWELL BANKER COMMERCIAL CB & Design    Ghana    Coldwell Banker LLC      
COLDWELL BANKER COMMERCIAL CB & Design    Ghana    Coldwell Banker LLC      
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Ghana    Coldwell Banker LLC      
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Ghana    Coldwell Banker LLC      
COLDWELL BANKER    Gibraltar    Coldwell Banker LLC    9288    9288
COLDWELL BANKER    Gibraltar    Coldwell Banker LLC    9290    9290
COLDWELL BANKER CB & Design    Gibraltar    Coldwell Banker LLC    9286    9286
COLDWELL BANKER CB & Design    Gibraltar    Coldwell Banker LLC    9291    9291
COLDWELL BANKER COMMERCIAL    Gibraltar    Coldwell Banker LLC    9292    9292
COLDWELL BANKER COMMERCIAL & Design    Gibraltar    Coldwell Banker LLC    9287    9287
COLDWELL BANKER    Greece    Coldwell Banker Corporation*    144555    144555
COLDWELL BANKER CB & Design    Greece    Coldwell Banker LLC    126821    126821
COLDWELL BANKER COMMERCIAL    Greece    Coldwell Banker LLC    896621    896621
COLDWELL BANKER PREVIEWS    Greece    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Greece    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    Grenada    Coldwell Banker LLC       250/1997
COLDWELL BANKER    Grenada    Coldwell Banker LLC       251/1997
COLDWELL BANKER CB & Design    Grenada    Coldwell Banker LLC       249/1997
COLDWELL BANKER    Guatemala    Coldwell Banker LLC    98-1625    118092
COLDWELL BANKER    Guatemala    Coldwell Banker LLC    98-1626    106212
COLDWELL BANKER CB & Design    Guatemala    Coldwell Banker LLC    98-1619    106206
COLDWELL BANKER CB & Design    Guatemala    Coldwell Banker LLC    98-1620    106207
COLDWELL BANKER COMMERCIAL    Guatemala    Coldwell Banker LLC    98-1623    106210
COLDWELL BANKER COMMERCIAL    Guatemala    Coldwell Banker LLC    98-1624    106211
COLDWELL BANKER PREVIEWS    Guatemala    Coldwell Banker LLC    98-1621    106208
COLDWELL BANKER PREVIEWS    Guatemala    Coldwell Banker LLC    98-1622    106209
COLDWELL BANKER    Guyana    Coldwell Banker Corporation*    17,134A    17,134A
COLDWELL BANKER CB & Design    Guyana    Coldwell Banker Corporation*    17,135A    17,135A

 

II-66


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER COMMERCIAL    Guyana    Coldwell Banker Corporation*    17,133A    17,133A
COLDWELL BANKER PREVIEWS    Guyana    Coldwell Banker Corporation*    17,132A    17,132A
COLDWELL BANKER    Haiti    Coldwell Banker LLC    898    82/160
COLDWELL BANKER    Haiti    Coldwell Banker LLC    899    83/160
COLDWELL BANKER CB & Design    Haiti    Coldwell Banker LLC    900    84/160
COLDWELL BANKER CB & Design    Haiti    Coldwell Banker LLC    901    85/160
COLDWELL BANKER COMMERCIAL    Haiti    Coldwell Banker LLC    491    391/162
COLDWELL BANKER COMMERCIAL    Haiti    Coldwell Banker LLC    492    390/162
COLDWELL BANKER PREVIEWS INTERNATIONAL    Haiti    Coldwell Banker Corporation*    541-A    112-148
COLDWELL BANKER PREVIEWS INTERNATIONAL    Haiti    Coldwell Banker Corporation*    542-A    113-148
COLDWELL BANKER    Honduras    Coldwell Banker LLC    3470/98    72784
COLDWELL BANKER    Honduras    Coldwell Banker LLC    3471/98    5039
COLDWELL BANKER CB & Design    Honduras    Coldwell Banker LLC    3468/98    73346
COLDWELL BANKER CB & Design    Honduras    Coldwell Banker LLC    3469/98    5595
COLDWELL BANKER COMMERCIAL    Honduras    Coldwell Banker LLC    3467/98    72879
COLDWELL BANKER COMMERCIAL    Honduras    Coldwell Banker LLC    3480/98    5038
COLDWELL BANKER PREVIEWS    Honduras    Coldwell Banker LLC    3472/98    72783
COLDWELL BANKER PREVIEWS    Honduras    Coldwell Banker LLC    3479/98    5040
CB & Design    Hong Kong    Coldwell Banker Corporation*    5846/92    03512
COLDWELL BANKER    Hong Kong    Coldwell Banker Corporation*    10946/98    05705
COLDWELL BANKER    Hong Kong    Coldwell Banker Corporation*    5842/92    04023
COLDWELL BANKER CB & Design    Hong Kong    Coldwell Banker Corporation*    10948/98    09131
COLDWELL BANKER CB & Design    Hong Kong    Coldwell Banker Corporation*    5845/92    03511
COLDWELL BANKER COMMERCIAL    Hong Kong    Coldwell Banker Corporation*    10947/98    09130
COLDWELL BANKER COMMERCIAL    Hong Kong    Coldwell Banker Corporation*    5843/92    04024
COLDWELL BANKER COMMERCIAL & Design    Hong Kong    Coldwell Banker Corporation*    5844/92    04025
COLDWELL BANKER PREVIEWS    Hong Kong    Coldwell Banker Corporation*    10949/98    09681
COLDWELL BANKER PREVIEWS    Hong Kong    Coldwell Banker Corporation*    10950/98    09682
COLDWELL BANKER CB & Design    Hungary    Coldwell Banker LLC    126821    126821
COLDWELL BANKER COMMERCIAL    Hungary    Coldwell Banker LLC    896621    896621

 

II-67


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER PREVIEWS    Hungary    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Hungary    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    India    Coldwell Banker Corporation*    1241393    1241393
COLDWELL BANKER    India    Coldwell Banker Corporation*    744350    744350
COLDWELL BANKER CB & Design    India    Coldwell Banker Corporation*    1241395    1241395
COLDWELL BANKER CB & Design    India    Coldwell Banker Corporation*    744349    744349
COLDWELL BANKER COMMERCIAL    India    Coldwell Banker Corporation*    1289307    520710
COLDWELL BANKER COMMERCIAL    India    Coldwell Banker Corporation*    1483273    1483273
COLDWELL BANKER COMMERCIAL CB & Design    India    Coldwell Banker Corporation*    1483272    1483272
COLDWELL BANKER COMMERCIAL CB & Design    India    Coldwell Banker Corporation*    1483274    1483274
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    India    Coldwell Banker Corporation*    1397467    1397467
COLDWELL BANKER    Indonesia    Coldwell Banker LLC    D98-14058    IDM000159048
COLDWELL BANKER    Indonesia    Coldwell Banker LLC    J96-25793    IDM000087139
COLDWELL BANKER & Design    Indonesia    Coldwell Banker LLC    D98-06222    IDM000199247
COLDWELL BANKER CB & Design    Indonesia    Coldwell Banker LLC    J96-25794    IDM000087138
COLDWELL BANKER COMMERCIAL    Indonesia    Coldwell Banker LLC    J98-15117    IDM000216376
COLDWELL BANKER COMMERCIAL & Design    Indonesia    Coldwell Banker LLC    D98-15684    IDM000025909
COLDWELL BANKER PREVIEWS    Indonesia    Coldwell Banker LLC    D98-14056    IDM000183166
COLDWELL BANKER PREVIEWS    Indonesia    Coldwell Banker LLC    D98-14057    IDM000216375
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Indonesia    Coldwell Banker LLC    D05-26944    IDM000130452
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Indonesia    Coldwell Banker LLC    J05-26943    IDM000130451
COLDWELL BANKER PROPERTI & CB Design    Indonesia    Coldwell Banker LLC    20822-20970    519595
COLDWELL BANKER    Ireland    Coldwell Banker LLC    3113/98    210114
COLDWELL BANKER CB & Design    Ireland    Coldwell Banker LLC    126821    126821
COLDWELL BANKER CB & Design    Ireland    Coldwell Banker LLC    3114/98    210115
COLDWELL BANKER COMMERCIAL    Ireland    Coldwell Banker LLC    3115/98    210116
COLDWELL BANKER COMMERCIAL    Ireland    Coldwell Banker LLC    896621    896621
COLDWELL BANKER PREVIEWS    Ireland    Coldwell Banker LLC    3116/98    210117
COLDWELL BANKER PREVIEWS    Ireland    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Ireland    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    Israel    Coldwell Banker LLC    125382    125382

 

II-68


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER    Israel    Coldwell Banker LLC    125385    125385
COLDWELL BANKER CB & Design    Israel    Coldwell Banker LLC    185105    185105
COLDWELL BANKER CB & Design    Israel    Coldwell Banker LLC    185106    185106
COLDWELL BANKER COMMERCIAL    Israel    Coldwell Banker LLC    125380    125380
COLDWELL BANKER COMMERCIAL    Israel    Coldwell Banker LLC    125383    125383
COLDWELL BANKER PREVIEWS    Israel    Coldwell Banker LLC    125381    125381
COLDWELL BANKER PREVIEWS    Israel    Coldwell Banker LLC    125384    125384
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Israel    Coldwell Banker LLC    184491    184491
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Israel    Coldwell Banker LLC    184492    184492
CB & Design    Italy    Coldwell Banker LLC       1004265
COLDWELL BANKER    Italy    Coldwell Banker LLC       1004264
COLDWELL BANKER    Italy    Coldwell Banker LLC    VI98C 000302    824263
COLDWELL BANKER CB & Design    Italy    Coldwell Banker LLC    126821    126821
COLDWELL BANKER CB & Design    Italy    Coldwell Banker LLC    VI98C 000303    824264
COLDWELL BANKER COMMERCIAL    Italy    Coldwell Banker LLC    896621    896621
COLDWELL BANKER COMMERCIAL    Italy    Coldwell Banker LLC    VI98C 000305    824266
COLDWELL BANKER PREVIEWS    Italy    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS    Italy    Coldwell Banker LLC    VI98C 000304    824265
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Italy    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    Jamaica    Coldwell Banker Corporation*    16/2432    34052
COLDWELL BANKER    Jamaica    Coldwell Banker Corporation*    41298    41298
COLDWELL BANKER CB & Design    Jamaica    Coldwell Banker Corporation*    16/2433    32897
COLDWELL BANKER COMMERCIAL    Jamaica    Coldwell Banker Corporation*    16/2606    35277
COLDWELL BANKER PREVIEWS    Jamaica    Coldwell Banker Corporation*    16/2469    35961
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Jamaica    Coldwell Banker Corporation*    0467660    47660
COLDWELL BANKER    Japan    Coldwell Banker LLC    8-126344    4234028
COLDWELL BANKER CB & Design    Japan    Coldwell Banker LLC    10-080818    4406318
COLDWELL BANKER CB & Design    Japan    Coldwell Banker LLC    8-126345    4234029
COLDWELL BANKER COMMERCIAL    Japan    Coldwell Banker LLC    10-080817    4406317
COLDWELL BANKER PREVIEWS    Japan    Coldwell Banker LLC    10-080816    4406316
PREVIEWS    Japan    Coldwell Banker LLC    59-133140    2111528
COLDWELL BANKER    Jordan    Coldwell Banker Corporation*    56186    56186
COLDWELL BANKER    Jordan    Coldwell Banker Corporation*    78572    78572

 

II-69


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER CB & Design    Jordan    Coldwell Banker Corporation*    56185    56185
COLDWELL BANKER CB & Design    Jordan    Coldwell Banker Corporation*    78571    78571
COLDWELL BANKER COMMERCIAL    Jordan    Coldwell Banker Corporation*    55484    55484
COLDWELL BANKER COMMERCIAL    Jordan    Coldwell Banker Corporation*    78574    78574
COLDWELL BANKER PREVIEWS    Jordan    Coldwell Banker Corporation*    55485    55485
COLDWELL BANKER PREVIEWS INTERNATIONAL    Jordan    Coldwell Banker Corporation*    78573    78573
COLDWELL BANKER PREVIEWS INTERNATIONAL    Jordan    Coldwell Banker Corporation*    79149    79149
COLDWELL BANKER    Kazakhstan    Coldwell Banker LLC    41452    29047
COLDWELL BANKER CB & Design    Kazakhstan    Coldwell Banker LLC    41453    29048
COLDWELL BANKER COMMERCIAL    Kazakhstan    Coldwell Banker LLC    41454    29049
COLDWELL BANKER COMMERCIAL CB & Design    Kazakhstan    Coldwell Banker LLC    41455    28866
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Kazakhstan    Coldwell Banker LLC    41456    29338
COLDWELL BANKER    Kiribati    Coldwell Banker Corporation*    1561    1561
COLDWELL BANKER CB & Design    Kiribati    Coldwell Banker LLC    1560    1560
COLDWELL BANKER COMMERCIAL    Kiribati    Coldwell Banker Corporation*    1559    1559
COLDWELL BANKER PREVIEWS    Kiribati    Coldwell Banker LLC    1655    1655
COLDWELL BANKER    Korea, Democratic People’s Republic of    Coldwell Banker LLC    18998    10134
COLDWELL BANKER CB & Design    Korea, Democratic People’s Republic of    Coldwell Banker LLC    18997    10133
COLDWELL BANKER COMMERCIAL    Korea, Democratic People’s Republic of    Coldwell Banker LLC    18995    10131
COLDWELL BANKER PREVIEWS    Korea, Democratic People’s Republic of    Coldwell Banker LLC    18996    10132
CB & Design    Korea, Republic of    Coldwell Banker Corporation*    1990-1839    15101
COLDWELL BANKER    Korea, Republic of    Coldwell Banker LLC    1988-001212    10506
COLDWELL BANKER (in Korean)    Korea, Republic of    Coldwell Banker LLC    1996-3371    41-39983
COLDWELL BANKER CB & Design    Korea, Republic of    Coldwell Banker LLC    1990-001840    15102

 

II-70


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER COMMERCIAL    Korea, Republic of    Coldwell Banker Corporation*    4520062798    4521287
COLDWELL BANKER COMMERCIAL & Design    Korea, Republic of    Coldwell Banker LLC    1988-001210    10504
COLDWELL BANKER COMMERCIAL CB & Design    Korea, Republic of    Coldwell Banker Corporation*    4520062800    4520883
COLDWELL BANKER PREVIEWS    Korea, Republic of    Coldwell Banker LLC    1998-1730    56325
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Korea, Republic of    Coldwell Banker LLC    4520074781    4526152
COLDWELL BANKER    Kosovo    Coldwell Banker Corporation*    1103    274
COLDWELL BANKER CB & Design    Kosovo    Coldwell Banker Corporation*    1104    275
COLDWELL BANKER COMMERCIAL    Kosovo    Coldwell Banker Corporation*    1105    276
COLDWELL BANKER PREVIEWS INTERNATIONAL    Kosovo    Coldwell Banker Corporation*    1102    273
COLDWELL BANKER    Kuwait    Coldwell Banker Corporation*    36128    32264
COLDWELL BANKER CB & Design    Kuwait    Coldwell Banker Corporation*    36129    32384
COLDWELL BANKER COMMERCIAL    Kuwait    Coldwell Banker Corporation*    57402    59879
COLDWELL BANKER COMMERCIAL CB & Design    Kuwait    Coldwell Banker Corporation*    61814    55596
COLDWELL BANKER    Latvia    Coldwell Banker LLC    M981682    M44821
COLDWELL BANKER CB & Design    Latvia    Coldwell Banker LLC    126821    126821
COLDWELL BANKER CB & Design    Latvia    Coldwell Banker LLC    M981683    M44822
COLDWELL BANKER COMMERCIAL    Latvia    Coldwell Banker LLC    896621    896621
COLDWELL BANKER COMMERCIAL    Latvia    Coldwell Banker LLC    M981684    M44823
COLDWELL BANKER PREVIEWS    Latvia    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS    Latvia    Coldwell Banker LLC    M981685    M44824
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Latvia    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    Lebanon    Coldwell Banker Corporation*       91112
COLDWELL BANKER CB & Design    Lebanon    Coldwell Banker Corporation*       91110
COLDWELL BANKER COMMERCIAL    Lebanon    Coldwell Banker Corporation*       91109
COLDWELL BANKER COMMERCIAL CB & Design    Lebanon    Coldwell Banker Corporation*       91111
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Lebanon    Coldwell Banker Corporation*    3245    107129
COLDWELL BANKER    Libya    Coldwell Banker LLC    15287   
COLDWELL BANKER    Libya    Coldwell Banker LLC    15288   

 

II-71


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER CB & Design    Libya    Coldwell Banker LLC    15289   
COLDWELL BANKER CB & Design    Libya    Coldwell Banker LLC    15290   
COLDWELL BANKER COMMERCIAL    Libya    Coldwell Banker LLC    15291   
COLDWELL BANKER COMMERCIAL    Libya    Coldwell Banker LLC    15292   
COLDWELL BANKER COMMERCIAL CB & Design    Libya    Coldwell Banker LLC    15293   
COLDWELL BANKER COMMERCIAL CB & Design    Libya    Coldwell Banker LLC    15294   
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Libya    Coldwell Banker LLC    15295   
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Libya    Coldwell Banker LLC    15296   
COLDWELL BANKER    Liechtenstein    Coldwell Banker LLC       11457
COLDWELL BANKER CB & Design    Liechtenstein    Coldwell Banker LLC       11456
COLDWELL BANKER COMMERCIAL    Liechtenstein    Coldwell Banker LLC       11455
COLDWELL BANKER PREVIEWS    Liechtenstein    Coldwell Banker LLC       11458
COLDWELL BANKER    Lithuania    Coldwell Banker Corporation*    20051127    53330
COLDWELL BANKER CB & Design    Lithuania    Coldwell Banker LLC    126821    126821
COLDWELL BANKER CB & Design (black on white)    Lithuania    Coldwell Banker Corporation*    20051126    53329
COLDWELL BANKER COMMERCIAL    Lithuania    Coldwell Banker Corporation*    20051128    53331
COLDWELL BANKER COMMERCIAL    Lithuania    Coldwell Banker LLC    896621    896621
COLDWELL BANKER PREVIEWS    Lithuania    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL    Lithuania    Coldwell Banker Corporation*    20051129    53158
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Lithuania    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    Macau    Coldwell Banker Corporation*    4843    4843
COLDWELL BANKER    Macau    Coldwell Banker Corporation*    4844    4844
COLDWELL BANKER CB & Design    Macau    Coldwell Banker Corporation*    4841    4841
COLDWELL BANKER CB & Design    Macau    Coldwell Banker Corporation*    4842    4842
COLDWELL BANKER COMMERCIAL    Macau    Coldwell Banker Corporation*    4837    4837
COLDWELL BANKER COMMERCIAL    Macau    Coldwell Banker Corporation*    4838    4838
COLDWELL BANKER PREVIEWS    Macau    Coldwell Banker Corporation*    4839    4839
COLDWELL BANKER PREVIEWS    Macau    Coldwell Banker Corporation*    4840    4840
COLDWELL BANKER    Macedonia    Coldwell Banker Corporation*    2005/839    13238

 

II-72


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER CB & Design    Macedonia    Coldwell Banker Corporation*    2005/838    13237
COLDWELL BANKER COMMERCIAL    Macedonia    Coldwell Banker Corporation*    2005/837    13236
COLDWELL BANKER PREVIEWS INTERNATIONAL    Macedonia    Coldwell Banker Corporation*    2005/836    13235
COLDWELL BANKER    Malaysia    Coldwell Banker Corporation*    88-02130    88-02130
COLDWELL BANKER CB & Design    Malaysia    Coldwell Banker Corporation*    98-11330   
COLDWELL BANKER CB & Design    Malaysia    Coldwell Banker LLC    98-11342    98-11342
COLDWELL BANKER COMMERCIAL    Malaysia    Coldwell Banker Corporation*    98-11345    98-11345
COLDWELL BANKER COMMERCIAL    Malaysia    Coldwell Banker Corporation*    98-11346    98-11346
COLDWELL BANKER COMMERCIAL & Design    Malaysia    Coldwell Banker Corporation*    88-02131    88-02131
COLDWELL BANKER PREVIEWS    Malaysia    Coldwell Banker Corporation*    98-11343    98-11343
COLDWELL BANKER PREVIEWS    Malaysia    Coldwell Banker Corporation*    98-11344    98-11344
COLDWELL BANKER    Malta    Coldwell Banker Corporation*    31125    31125
COLDWELL BANKER CB & Design    Malta    Coldwell Banker Corporation*    31124    31124
COLDWELL BANKER CB & Design    Malta    Coldwell Banker LLC    126821    126821
COLDWELL BANKER COMMERCIAL    Malta    Coldwell Banker Corporation*    31122    31122
COLDWELL BANKER COMMERCIAL    Malta    Coldwell Banker LLC    896621    896621
COLDWELL BANKER PREVIEWS    Malta    Coldwell Banker Corporation*    31123    31123
COLDWELL BANKER PREVIEWS    Malta    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Malta    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    Mexico    Coldwell Banker LLC    151921    461261
COLDWELL BANKER    Mexico    Coldwell Banker LLC    151922    461262
COLDWELL BANKER BIENES RAICES & Design    Mexico    Coldwell Banker LLC    454607    692903
COLDWELL BANKER BIENES RAICES & Design    Mexico    Coldwell Banker LLC    454608    689478
COLDWELL BANKER CB & Design    Mexico    Coldwell Banker LLC    219301    544515
COLDWELL BANKER CB & Design    Mexico    Coldwell Banker LLC    220127    495425
COLDWELL BANKER COMMERCIAL & Design    Mexico    Coldwell Banker LLC    164949    467981
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Mexico    Coldwell Banker LLC    747841    915747
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Mexico    Coldwell Banker LLC    747843    915748
PREVIEWS    Mexico    Coldwell Banker LLC    213821    493374

 

II-73


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

PREVIEWS    Mexico    Coldwell Banker LLC    213822    503301
COLDWELL BANKER    Moldova    Coldwell Banker LLC    019696    16860
COLDWELL BANKER CB & Design    Moldova    Coldwell Banker LLC    019694    17082
COLDWELL BANKER COMMERCIAL    Moldova    Coldwell Banker LLC    019695    16863
COLDWELL BANKER COMMERCIAL CB & Design    Moldova    Coldwell Banker LLC    019697    17083
COLDWELL BANKER    Monaco    Coldwell Banker LLC    019080    9818972
COLDWELL BANKER    Monaco    Coldwell Banker LLC    27749    0726256
COLDWELL BANKER CB & Design    Monaco    Coldwell Banker LLC    27752    0726259
COLDWELL BANKER COMMERCIAL    Monaco    Coldwell Banker LLC    27750    0726257
COLDWELL BANKER COMMERCIAL CB & Design    Monaco    Coldwell Banker LLC    27751    0726258
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Monaco    Coldwell Banker LLC    27753    0726260
COLDWELL BANKER    Montenegro    Coldwell Banker LLC    1521/05    51779
COLDWELL BANKER CB & Design    Montenegro    Coldwell Banker LLC    1520/05    51778
COLDWELL BANKER COMMERCIAL    Montenegro    Coldwell Banker LLC    1522/05    51780
COLDWELL BANKER PREVIEWS INTERNATIONAL    Montenegro    Coldwell Banker LLC    1523/05    51781
COLDWELL BANKER    Montserrat    Coldwell Banker LLC       3166
COLDWELL BANKER CB & Design    Montserrat    Coldwell Banker LLC       3167
COLDWELL BANKER COMMERCIAL & Design    Montserrat    Coldwell Banker LLC      
COLDWELL BANKER    Morocco    Coldwell Banker Corporation*    95826    95826
COLDWELL BANKER    Morocco    Coldwell Banker LLC    131001   
COLDWELL BANKER CB & Design    Morocco    Coldwell Banker Corporation*    95827    95827
COLDWELL BANKER CB & Design    Morocco    Coldwell Banker LLC    130999   
COLDWELL BANKER COMMERCIAL    Morocco    Coldwell Banker Corporation*    96356    96356
COLDWELL BANKER PREVIEWS INTERNATIONAL    Morocco    Coldwell Banker Corporation*    96357    96357
COLDWELL BANKER    Netherlands Antilles    Coldwell Banker LLC    d-700505    13093
COLDWELL BANKER CB & Design    Netherlands Antilles    Coldwell Banker LLC    D-700507    13095
COLDWELL BANKER COMMERCIAL    Netherlands Antilles    Coldwell Banker LLC    D-700506    13094
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Netherlands Antilles    Coldwell Banker LLC    D-600060    11910
COLDWELL BANKER    New Zealand    Coldwell Banker LLC    182322    182322
COLDWELL BANKER    New Zealand    Coldwell Banker LLC    272215    272215
COLDWELL BANKER CB & Design    New Zealand    Coldwell Banker LLC    272216    272216
COLDWELL BANKER CB & Design    New Zealand    Coldwell Banker LLC    272217    272217
COLDWELL BANKER COMMERCIAL    New Zealand    Coldwell Banker LLC    182323    182323

 

II-74


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER COMMERCIAL    New Zealand    Coldwell Banker LLC    296127    296127
COLDWELL BANKER PREVIEWS    New Zealand    Coldwell Banker LLC    296125    296125
COLDWELL BANKER PREVIEWS    New Zealand    Coldwell Banker LLC    296126    296126
COLDWELL BANKER    Nicaragua    Coldwell Banker Corporation*    98-00950    39641
COLDWELL BANKER    Nicaragua    Coldwell Banker LLC    98-00951    39849
COLDWELL BANKER CB & Design    Nicaragua    Coldwell Banker Corporation*    98-00957    40271
COLDWELL BANKER CB & Design    Nicaragua    Coldwell Banker LLC    98-00956    40289
COLDWELL BANKER COMMERCIAL    Nicaragua    Coldwell Banker LLC    98-00952    39861
COLDWELL BANKER COMMERCIAL    Nicaragua    Coldwell Banker LLC    98-00953    40325
COLDWELL BANKER PREVIEWS    Nicaragua    Coldwell Banker Corporation*    98-00954    39850
COLDWELL BANKER PREVIEWS    Nicaragua    Coldwell Banker LLC    98-00955    39862
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Nicaragua    Coldwell Banker LLC    05-03745    0602020
COLDWELL BANKER    Nigeria    Coldwell Banker LLC    F/TM/2010/11246   
COLDWELL BANKER    Nigeria    Coldwell Banker LLC    F/TM/2010/11253   
COLDWELL BANKER CB & Design    Nigeria    Coldwell Banker LLC    F/TM/2010/11247   
COLDWELL BANKER CB & Design    Nigeria    Coldwell Banker LLC    F/TM/2010/11252   
COLDWELL BANKER COMMERCIAL    Nigeria    Coldwell Banker LLC    F/TM/2010/11250   
COLDWELL BANKER COMMERCIAL    Nigeria    Coldwell Banker LLC    F/TM/2010/11999   
COLDWELL BANKER COMMERCIAL CB & Design    Nigeria    Coldwell Banker LLC    F/TM/2010/11249   
COLDWELL BANKER COMMERCIAL CB & Design    Nigeria    Coldwell Banker LLC    F/TM/2010/11254   
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Nigeria    Coldwell Banker LLC    F/TM/2010/11248   
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Nigeria    Coldwell Banker LLC    F/TM/2010/11251   
COLDWELL BANKER    Norway    Coldwell Banker LLC    9803109    193419
COLDWELL BANKER CB & Design    Norway    Coldwell Banker LLC    9803112    193422
COLDWELL BANKER COMMERCIAL    Norway    Coldwell Banker LLC    9803111    193421
COLDWELL BANKER PREVIEWS    Norway    Coldwell Banker LLC    9803110    193420
COLDWELL BANKER    Oman    Coldwell Banker Corporation*    36879    36879
COLDWELL BANKER    Oman    Coldwell Banker Corporation*    36880    36880
COLDWELL BANKER CB & Design    Oman    Coldwell Banker Corporation*    36885    36885

 

II-75


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER CB & Design    Oman    Coldwell Banker Corporation*    36886    36886
COLDWELL BANKER COMMERCIAL    Oman    Coldwell Banker Corporation*    36881    36881
COLDWELL BANKER COMMERCIAL    Oman    Coldwell Banker Corporation*    36882    36882
COLDWELL BANKER PREVIEWS INTERNATIONAL    Oman    Coldwell Banker Corporation*    36883    36883
COLDWELL BANKER PREVIEWS INTERNATIONAL    Oman    Coldwell Banker Corporation*    36884    36884
COLDWELL BANKER    Pakistan    Coldwell Banker Corporation*    150872    150872
COLDWELL BANKER CB & Design    Pakistan    Coldwell Banker Corporation*    150870    150870
COLDWELL BANKER COMMERCIAL    Pakistan    Coldwell Banker Corporation*    150869    150869
COLDWELL BANKER PREVIEWS    Pakistan    Coldwell Banker Corporation*    150871    150871
COLDWELL BANKER    Panama    Coldwell Banker LLC    85644    85644
COLDWELL BANKER    Panama    Coldwell Banker LLC    85645    85655
COLDWELL BANKER CB & Design    Panama    Coldwell Banker LLC    84324    84324
COLDWELL BANKER CB & Design    Panama    Coldwell Banker LLC    84325    84325
COLDWELL BANKER COMMERCIAL    Panama    Coldwell Banker LLC    95108    95108
COLDWELL BANKER COMMERCIAL    Panama    Coldwell Banker LLC    95111    95111
COLDWELL BANKER PREVIEWS    Panama    Coldwell Banker LLC    95119    95119
COLDWELL BANKER PREVIEWS    Panama    Coldwell Banker LLC    95120    95120
COLDWELL BANKER    Papua New Guinea    Coldwell Banker Corporation*    A61877    A61877
COLDWELL BANKER    Papua New Guinea    Coldwell Banker LLC    68023    A68023
COLDWELL BANKER CB & Design    Papua New Guinea    Coldwell Banker Corporation*    A61878    A61878
COLDWELL BANKER CB & Design    Papua New Guinea    Coldwell Banker LLC    68024    A68024
COLDWELL BANKER COMMERCIAL    Papua New Guinea    Coldwell Banker Corporation*    A61875    A61875
COLDWELL BANKER PREVIEWS    Papua New Guinea    Coldwell Banker Corporation*    A61876    A61876
COLDWELL BANKER    Paraguay    Coldwell Banker LLC    27311    291782
COLDWELL BANKER    Paraguay    Coldwell Banker LLC    27317    219980
COLDWELL BANKER CB & Design    Paraguay    Coldwell Banker LLC    27313    280547
COLDWELL BANKER CB & Design    Paraguay    Coldwell Banker LLC    27314    220929
COLDWELL BANKER COMMERCIAL    Paraguay    Coldwell Banker LLC    27316    219899
COLDWELL BANKER COMMERCIAL    Paraguay    Coldwell Banker LLC    27318    216618
COLDWELL BANKER PREVIEWS    Paraguay    Coldwell Banker LLC    27312    241792

 

II-76


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER PREVIEWS    Paraguay    Coldwell Banker LLC    27315    222647
COLDWELL BANKER    Peru    Coldwell Banker LLC    40117    040817
COLDWELL BANKER    Peru    Coldwell Banker LLC    40118    012571
COLDWELL BANKER CB & Design    Peru    Coldwell Banker LLC    40119    012652
COLDWELL BANKER CB & Design    Peru    Coldwell Banker LLC    40120    041437
COLDWELL BANKER COMMERCIAL    Peru    Coldwell Banker LLC    068027    050118
COLDWELL BANKER COMMERCIAL    Peru    Coldwell Banker LLC    068111    016046
COLDWELL BANKER COMMERCIAL CB & Design    Peru    Coldwell Banker LLC    331260    136447
COLDWELL BANKER COMMERCIAL CB & Design    Peru    Coldwell Banker LLC    331261    50398
COLDWELL BANKER PREVIEWS    Peru    Coldwell Banker LLC    068026    050117
COLDWELL BANKER PREVIEWS    Peru    Coldwell Banker LLC    068109    016045
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Peru    Coldwell Banker LLC    331256    50397
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Peru    Coldwell Banker LLC    331258    137200
COLDWELL BANKER    Philippines    Coldwell Banker Corporation*    4-2005-010581    4-2005-010581
COLDWELL BANKER    Philippines    Coldwell Banker LLC    4-2008-013080    4-2008-013080
COLDWELL BANKER CB & Design    Philippines    Coldwell Banker Corporation*    4-2005-010583    4-2005-010583
COLDWELL BANKER CB & Design    Philippines    Coldwell Banker LLC    4-2008-013083    4-2008-013083
COLDWELL BANKER CB with Rectangle Design    Philippines    Coldwell Banker Corporation*    4-1997-117565    4-1997-117565
COLDWELL BANKER COMMERCIAL    Philippines    Coldwell Banker Corporation*    4-2005-010582    4-2005-010582
COLDWELL BANKER COMMERCIAL    Philippines    Coldwell Banker LLC    4-2008-013081    4-2008-013081
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Philippines    Coldwell Banker LLC    4-2008-013082    4-2008-013082
COLDWELL BANKER    Poland    Coldwell Banker LLC    Z-174262    122325
COLDWELL BANKER CB & Design    Poland    Coldwell Banker LLC    126821    126821
COLDWELL BANKER CB & Design    Poland    Coldwell Banker LLC    Z-174261    122326
COLDWELL BANKER COMMERCIAL    Poland    Coldwell Banker LLC    896621    896621
COLDWELL BANKER COMMERCIAL    Poland    Coldwell Banker LLC    Z191810    132539
COLDWELL BANKER PREVIEWS    Poland    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS    Poland    Coldwell Banker LLC    Z-191811    132802
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Poland    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    Portugal    Coldwell Banker LLC    330677    330677
COLDWELL BANKER CB & Design    Portugal    Coldwell Banker LLC    126821    126821
COLDWELL BANKER CB & Design    Portugal    Coldwell Banker LLC    330680    330680
COLDWELL BANKER COMMERCIAL    Portugal    Coldwell Banker LLC    330679    330679

 

II-77


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER COMMERCIAL    Portugal    Coldwell Banker LLC    896621    896621
COLDWELL BANKER PREVIEWS    Portugal    Coldwell Banker LLC    330678    330678
COLDWELL BANKER PREVIEWS    Portugal    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Portugal    Coldwell Banker LLC    004725041    004725041
CB Design    Puerto Rico    Coldwell Banker Corporation*       6791
COLDWELL BANKER    Puerto Rico    Coldwell Banker Corporation*       6793
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Puerto Rico    Coldwell Banker LLC    66733   
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Puerto Rico    Coldwell Banker LLC    66734   
COLDWELL BANKER    Qatar    Coldwell Banker Corporation*    28126    28126
COLDWELL BANKER CB & Design    Qatar    Coldwell Banker Corporation*    28127    28127
COLDWELL BANKER COMMERCIAL    Qatar    Coldwell Banker Corporation*    28128    28128
COLDWELL BANKER COMMERCIAL CB & Design    Qatar    Coldwell Banker Corporation*    28129    28129
COLDWELL BANKER    Romania    Coldwell Banker Corporation*    M2005 10239    71644
COLDWELL BANKER CB & Design    Romania    Coldwell Banker Corporation*    M2005 10240    71665
COLDWELL BANKER COMMERCIAL    Romania    Coldwell Banker Corporation*    200510241    71666
COLDWELL BANKER COMMERCIAL CB & Design    Romania    Coldwell Banker Corporation*    M200608817    79530
COLDWELL BANKER PREVIEWS INTERNATIONAL    Romania    Coldwell Banker Corporation*    M2005 10242    71664
COLDWELL BANKER    Russian Federation    Coldwell Banker Corporation*    2005715047    330415
COLDWELL BANKER    Russian Federation    Coldwell Banker LLC    2010725395   
COLDWELL BANKER CB & Design    Russian Federation    Coldwell Banker Corporation*    2005715049    330417
COLDWELL BANKER CB & Design    Russian Federation    Coldwell Banker Corporation*    2010724828   
COLDWELL BANKER COMMERCIAL    Russian Federation    Coldwell Banker Corporation*    2005715048    330416
COLDWELL BANKER COMMERCIAL    Russian Federation    Coldwell Banker Corporation*    2010725394   
COLDWELL BANKER PREVIEWS INTERNATIONAL    Russian Federation    Coldwell Banker Corporation*    2005715046    333731
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Russian Federation    Coldwell Banker LLC    2010724831   
COLDWELL BANKER    Saudi Arabia    Coldwell Banker Corporation*    77790    708/72
COLDWELL BANKER CB & Design    Saudi Arabia    Coldwell Banker Corporation*    77791    708/73

 

II-78


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER COMMERCIAL    Saudi Arabia    Coldwell Banker Corporation*    77792    708/74
COLDWELL BANKER COMMERCIAL CB & Design    Saudi Arabia    Coldwell Banker Corporation*    77793    688/94
COLDWELL BANKER PREVIEWS    Saudi Arabia    Coldwell Banker Corporation*    77794    708/75
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Saudi Arabia    Coldwell Banker Corporation*    101267    970/59
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Saudi Arabia    Coldwell Banker Corporation*    101268    969/84
COLDWELL BANKER    Serbia    Coldwell Banker LLC    1521/05    51779
COLDWELL BANKER CB & Design    Serbia    Coldwell Banker LLC    1520/05    51778
COLDWELL BANKER COMMERCIAL    Serbia    Coldwell Banker LLC    1522/05    51780
COLDWELL BANKER PREVIEWS INTERNATIONAL    Serbia    Coldwell Banker LLC    1523/05    51781
COLDWELL BANKER    Singapore    Coldwell Banker LLC    9294/96    T96/09294A
COLDWELL BANKER    Singapore    Coldwell Banker LLC    9295/96    T96/09295Z
COLDWELL BANKER CB & Design    Singapore    Coldwell Banker LLC    9296/96    T96/09296H
COLDWELL BANKER CB & Design    Singapore    Coldwell Banker LLC    9297/96    T96/09297F
COLDWELL BANKER COMMERCIAL    Singapore    Coldwell Banker LLC    9313/98    T98/09313I
COLDWELL BANKER COMMERCIAL    Singapore    Coldwell Banker LLC    9314/98    T9809314G
COLDWELL BANKER PREVIEWS    Singapore    Coldwell Banker LLC    9315/98    T98/09315E
COLDWELL BANKER PREVIEWS    Singapore    Coldwell Banker LLC    9316/98    T98/09316C
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design (in series)    Singapore    Coldwell Banker LLC    T05/21302C    T05/21302C
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design (in series)    Singapore    Coldwell Banker LLC    T05/21304Z    T05/21304Z
COLDWELL BANKER    Slovakia    Coldwell Banker Corporation*    5803-2005    214572
COLDWELL BANKER CB & Design    Slovakia    Coldwell Banker Corporation*    5804-2005    214573
COLDWELL BANKER CB & Design    Slovakia    Coldwell Banker LLC    126821    126821
COLDWELL BANKER COMMERCIAL    Slovakia    Coldwell Banker Corporation*    5802-2005    214571
COLDWELL BANKER COMMERCIAL    Slovakia    Coldwell Banker LLC    896621    896621
COLDWELL BANKER PREVIEWS    Slovakia    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL    Slovakia    Coldwell Banker Corporation*    5801-2005    214570
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Slovakia    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    Slovenia    Coldwell Banker Corporation*    200571513    200571513
COLDWELL BANKER CB & Design    Slovenia    Coldwell Banker Corporation*    200571515    200571515

 

II-79


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER CB & Design    Slovenia    Coldwell Banker LLC    126821    126821
COLDWELL BANKER COMMERCIAL    Slovenia    Coldwell Banker Corporation*    200571514    200571514
COLDWELL BANKER COMMERCIAL    Slovenia    Coldwell Banker LLC    896621    896621
COLDWELL BANKER PREVIEWS    Slovenia    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL    Slovenia    Coldwell Banker Corporation*    200571512    200571512
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Slovenia    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    Solomon Islands    Coldwell Banker LLC       1879
COLDWELL BANKER CB & Design    Solomon Islands    Coldwell Banker LLC       1740
COLDWELL BANKER COMMERCIAL    Solomon Islands    Coldwell Banker LLC       1739
COLDWELL BANKER    South Africa    Coldwell Banker LLC    9615596    9615596
COLDWELL BANKER    South Africa    Coldwell Banker LLC    9615597    9615597
COLDWELL BANKER CB & Design    South Africa    Coldwell Banker LLC    9615594    9615594
COLDWELL BANKER CB & Design    South Africa    Coldwell Banker LLC    9615595    9615595
COLDWELL BANKER COMMERCIAL    South Africa    Coldwell Banker LLC    9815096    9815096
COLDWELL BANKER COMMERCIAL    South Africa    Coldwell Banker LLC    9815097    9815097
COLDWELL BANKER PREVIEWS    South Africa    Coldwell Banker LLC    9718988    9718988
COLDWELL BANKER PREVIEWS    South Africa    Coldwell Banker LLC    9718989    9718989
CB & Design    Spain    Coldwell Banker LLC    1005732    1005732
COLDWELL BANKER    Spain    Coldwell Banker LLC    1005730    1005730
COLDWELL BANKER    Spain    Coldwell Banker LLC    1005731    1005731
COLDWELL BANKER BIENES RAICES & Design    Spain    Coldwell Banker Corporation*    2354151    2354151
COLDWELL BANKER BIENES RAICES & Design    Spain    Coldwell Banker Corporation*    2354152    2354152
COLDWELL BANKER CB & Design    Spain    Coldwell Banker LLC    126821    126821
COLDWELL BANKER COMMERCIAL    Spain    Coldwell Banker LLC    896621    896621
COLDWELL BANKER PREVIEWS    Spain    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Spain    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER    St. Kitts and Nevis    Coldwell Banker Corporation*    0385    2005/0385
COLDWELL BANKER CB & Design    St. Kitts and Nevis    Coldwell Banker Corporation*    0387    2005/0387
COLDWELL BANKER COMMERCIAL    St. Kitts and Nevis    Coldwell Banker Corporation*    0384    2005/0384
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    St. Kitts and Nevis    Coldwell Banker Corporation*    0386    2005/0386
COLDWELL BANKER CB & Design    St. Lucia    Coldwell Banker Corporation*    214/97    214/97
COLDWELL BANKER PREVIEWS    St. Lucia    Coldwell Banker Corporation*    299/97    299/97

 

II-80


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER PREVIEWS    St. Lucia    Coldwell Banker Corporation*    300/97    300/97
COLDWELL BANKER    St. Vincent and the Grenadines    Coldwell Banker LLC       220/97
COLDWELL BANKER    St. Vincent and the Grenadines    Coldwell Banker LLC       221/97
COLDWELL BANKER CB & Design    St. Vincent and the Grenadines    Coldwell Banker Corporation*       222/97
COLDWELL BANKER COMMERCIAL & Design    St. Vincent and the Grenadines    Coldwell Banker Corporation*       125/98
COLDWELL BANKER    Suriname    Coldwell Banker Corporation*       16176
COLDWELL BANKER CB & Design    Suriname    Coldwell Banker Corporation*       16174
COLDWELL BANKER COMMERCIAL    Suriname    Coldwell Banker Corporation*       16178
COLDWELL BANKER PREVIEWS    Suriname    Coldwell Banker Corporation*       16177
COLDWELL BANKER    Sweden    Coldwell Banker LLC    11192    404352
COLDWELL BANKER    Sweden    Coldwell Banker LLC    98-2806    335804
COLDWELL BANKER CB & Design    Sweden    Coldwell Banker LLC    11193    404353
COLDWELL BANKER CB & Design    Sweden    Coldwell Banker LLC    126821    126821
COLDWELL BANKER CB & Design    Sweden    Coldwell Banker LLC    98-2810    363103
COLDWELL BANKER COMMERCIAL    Sweden    Coldwell Banker LLC    896621    896621
COLDWELL BANKER COMMERCIAL    Sweden    Coldwell Banker LLC    98-2809    335805
COLDWELL BANKER PREVIEWS    Sweden    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS    Sweden    Coldwell Banker LLC    98-2807    363102
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Sweden    Coldwell Banker LLC    004725041    004725041
CB    Switzerland    Coldwell Banker LLC       322480
COLDWELL BANKER    Switzerland    Coldwell Banker LLC       322319
COLDWELL BANKER    Switzerland    Coldwell Banker LLC    2989/1998    454943
COLDWELL BANKER CB & Design    Switzerland    Coldwell Banker LLC    2987/1998    454925
COLDWELL BANKER COMMERCIAL    Switzerland    Coldwell Banker LLC    2988/1998    454942
COLDWELL BANKER PREVIEWS    Switzerland    Coldwell Banker LLC    2990/1998    454944
CB Design    Taiwan    Coldwell Banker LLC    79021408    49072
COLDWELL BANKER    Taiwan    Coldwell Banker LLC    77020887    41372
COLDWELL BANKER & Design    Taiwan    Coldwell Banker LLC    77020889    41936
COLDWELL BANKER CB & Design    Taiwan    Coldwell Banker LLC    79021407    49508
COLDWELL BANKER COMMERCIAL    Taiwan    Coldwell Banker LLC    87042618    154261
COLDWELL BANKER PREVIEWS    Taiwan    Coldwell Banker LLC    87042619    154262
CB & Design    Thailand    Coldwell Banker Corporation*    227809    Bor 18814
COLDWELL BANKER    Thailand    Coldwell Banker Corporation*    227806    Bor 18817

 

II-81


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER    Thailand    Coldwell Banker LLC    368287    Khor97339
COLDWELL BANKER & Design    Thailand    Coldwell Banker LLC    179353    Khor80061
COLDWELL BANKER CB & Design    Thailand    Coldwell Banker Corporation*    227807    Bor 18816
COLDWELL BANKER COMMERCIAL & Design    Thailand    Coldwell Banker Corporation*    227808    Bor 18815
COLDWELL BANKER COMMERCIAL & Design    Thailand    Coldwell Banker LLC    178611    Khor79278
COLDWELL BANKER PREVIEWS    Thailand    Coldwell Banker LLC    368288    Khor101571
COLDWELL BANKER PREVIEWS    Thailand    Coldwell Banker LLC    368289    Bor8826
COLDWELL BANKER    Tonga    Coldwell Banker LLC    00184    00278
COLDWELL BANKER CB & Design    Tonga    Coldwell Banker LLC    00183    00277
COLDWELL BANKER COMMERCIAL    Tonga    Coldwell Banker LLC    00181    00275
COLDWELL BANKER PREVIEWS    Tonga    Coldwell Banker LLC    00182    00276
COLDWELL BANKER    Trinidad and Tobago    Coldwell Banker LLC    27277    27277
COLDWELL BANKER    Trinidad and Tobago    Coldwell Banker LLC    27280    27280
COLDWELL BANKER CB & Design    Trinidad and Tobago    Coldwell Banker LLC    27278    27278
COLDWELL BANKER CB & Design    Trinidad and Tobago    Coldwell Banker LLC    27279    27279
COLDWELL BANKER COMMERCIAL    Trinidad and Tobago    Coldwell Banker Corporation*    28332    28332
COLDWELL BANKER PREVIEWS    Trinidad and Tobago    Coldwell Banker LLC    27946    27946
COLDWELL BANKER    Tunisia    Coldwell Banker Corporation*    EE050058    EE050058
COLDWELL BANKER CB & Design    Tunisia    Coldwell Banker Corporation*    EE050057    EE050057
COLDWELL BANKER COMMERCIAL    Tunisia    Coldwell Banker Corporation*    EE050779    EE050779
COLDWELL BANKER PREVIEWS INTERNATIONAL    Tunisia    Coldwell Banker Corporation*    EE050778    EE050778
COLDWELL BANKER    Turkey    Coldwell Banker LLC    6730    187775
COLDWELL BANKER    Turkey    Coldwell Banker LLC    6731    187815
COLDWELL BANKER CB & Design    Turkey    Coldwell Banker LLC    6728    185408
COLDWELL BANKER CB & Design    Turkey    Coldwell Banker LLC    6729    187757
COLDWELL BANKER COMMERCIAL    Turkey    Coldwell Banker LLC    12675    202490
COLDWELL BANKER COMMERCIAL    Turkey    Coldwell Banker LLC    12676    202269
COLDWELL BANKER COMMERCIAL CB & Design    Turkey    Coldwell Banker LLC    2007/17610    2007/17610
COLDWELL BANKER PREVIEWS    Turkey    Coldwell Banker LLC    12673    205807
COLDWELL BANKER PREVIEWS    Turkey    Coldwell Banker LLC    12674    200328
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Turkey    Coldwell Banker LLC    2007/17611    2007/17611

 

II-82


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER    Turkish Republic of Northern Cyprus    Coldwell Banker LLC    7420    7420
COLDWELL BANKER CB & Design    Turkish Republic of Northern Cyprus    Coldwell Banker LLC    7422    7422
COLDWELL BANKER COMMERCIAL    Turkish Republic of Northern Cyprus    Coldwell Banker LLC    7421    7421
COLDWELL BANKER COMMERCIAL CB & Design    Turkish Republic of Northern Cyprus    Coldwell Banker LLC    7423    7423
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Turkish Republic of Northern Cyprus    Coldwell Banker LLC    7435    7435
COLDWELL BANKER    Turkmenistan    Coldwell Banker LLC    0485    10240
COLDWELL BANKER CB & Design    Turkmenistan    Coldwell Banker LLC    0486    10244
COLDWELL BANKER COMMERCIAL    Turkmenistan    Coldwell Banker LLC    0487    10242
COLDWELL BANKER COMMERCIAL CB & Design    Turkmenistan    Coldwell Banker LLC    0488    10243
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Turkmenistan    Coldwell Banker LLC    0489    10241
COLDWELL BANKER    Turks and Caicos Islands    Coldwell Banker Corporation*    11494    11494
COLDWELL BANKER    Turks and Caicos Islands    Coldwell Banker Corporation*    12408    12408
COLDWELL BANKER CB & Design    Turks and Caicos Islands    Coldwell Banker Corporation*    11495    11495
COLDWELL BANKER CB & Design    Turks and Caicos Islands    Coldwell Banker Corporation*    12409    12409
COLDWELL BANKER PREVIEWS    Turks and Caicos Islands    Coldwell Banker Corporation*       12312
COLDWELL BANKER PREVIEWS    Turks and Caicos Islands    Coldwell Banker Corporation*    12475    12475
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Turks and Caicos Islands    Coldwell Banker Corporation*    14098    14098
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Turks and Caicos Islands    Coldwell Banker Corporation*    14099    14099
COLDWELL BANKER    Tuvalu    Coldwell Banker Corporation*       TM854
COLDWELL BANKER CB & Design    Tuvalu    Coldwell Banker Corporation*       TM853
COLDWELL BANKER COMMERCIAL    Tuvalu    Coldwell Banker Corporation*       TM852
COLDWELL BANKER PREVIEWS    Tuvalu    Coldwell Banker Corporation*       TM913
COLDWELL BANKER    Ukraine    Coldwell Banker LLC    200511479    73787
COLDWELL BANKER    Ukraine    Coldwell Banker LLC    M200819165    123222
COLDWELL BANKER CB & Design    Ukraine    Coldwell Banker LLC    200511480    73788
COLDWELL BANKER CB & Design    Ukraine    Coldwell Banker LLC    M200819168    123224

 

II-83


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER COMMERCIAL    Ukraine    Coldwell Banker LLC    200511481    73789
COLDWELL BANKER COMMERCIAL    Ukraine    Coldwell Banker LLC    M200819171    123225
COLDWELL BANKER PREVIEWS INTERNATIONAL    Ukraine    Coldwell Banker LLC    200511482    73790
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Ukraine    Coldwell Banker LLC    M200819166    123223
COLDWELL BANKER    United Arab Emirates    Coldwell Banker Corporation*    48337    52794
COLDWELL BANKER CB & Design    United Arab Emirates    Coldwell Banker Corporation*    48338    52795
COLDWELL BANKER COMMERCIAL    United Arab Emirates    Coldwell Banker Corporation*    48339    59487
COLDWELL BANKER COMMERCIAL CB & Design    United Arab Emirates    Coldwell Banker Corporation*    48340    59486
CB & Design    United Kingdom    Coldwell Banker LLC    1177297    1177297
CB & Design    United Kingdom    Coldwell Banker LLC    1273339    1273339
CB & Design    United Kingdom    Coldwell Banker LLC    1422532    1422532
COLDWELL BANKER    United Kingdom    Coldwell Banker LLC    1273338    1273338
COLDWELL BANKER    United Kingdom    Coldwell Banker LLC    1346215    1346215
COLDWELL BANKER    United Kingdom    Coldwell Banker LLC    2185020    2185020
COLDWELL BANKER CB & Design    United Kingdom    Coldwell Banker LLC    126821    126821
COLDWELL BANKER CB & Design    United Kingdom    Coldwell Banker LLC    1273340    1273340
COLDWELL BANKER CB & Design    United Kingdom    Coldwell Banker LLC    2185011    2185011
COLDWELL BANKER COMMERCIAL    United Kingdom    Coldwell Banker LLC    2185014    2185014
COLDWELL BANKER COMMERCIAL    United Kingdom    Coldwell Banker LLC    896621    896621
COLDWELL BANKER COMMERCIAL & Design    United Kingdom    Coldwell Banker LLC    1346216    1346216
COLDWELL BANKER PREVIEWS    United Kingdom    Coldwell Banker LLC    2150397    2150397
COLDWELL BANKER PREVIEWS    United Kingdom    Coldwell Banker LLC    2150408    2150408
COLDWELL BANKER PREVIEWS    United Kingdom    Coldwell Banker LLC    685040    685040
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    United Kingdom    Coldwell Banker LLC    004725041    004725041
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design (in series)    United Kingdom    Coldwell Banker LLC    2405562    2405562
COLDWELL BANKER    Uruguay    Coldwell Banker LLC    309085    309085
COLDWELL BANKER CB & Design    Uruguay    Coldwell Banker LLC    309086    309086
COLDWELL BANKER COMMERCIAL    Uruguay    Coldwell Banker LLC    309087    309087
COLDWELL BANKER PREVIEWS    Uruguay    Coldwell Banker LLC    309088    309088
COLDWELL BANKER    Uzbekistan    Coldwell Banker LLC    MGU20080005    MGU 17273
COLDWELL BANKER CB & Design    Uzbekistan    Coldwell Banker LLC    MGU20080002    MGU 17220
COLDWELL BANKER COMMERCIAL    Uzbekistan    Coldwell Banker LLC    MGU20080006    MGU 17478

 

II-84


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER COMMERCIAL CB & Design    Uzbekistan    Coldwell Banker LLC    MGU20080003    MGU 17476
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Uzbekistan    Coldwell Banker LLC    MGU20080004    MGU 17477
COLDWELL BANKER    Vanuatu    Coldwell Banker LLC    10311    10311
COLDWELL BANKER CB & Design    Vanuatu    Coldwell Banker Corporation*    10313    10313
COLDWELL BANKER COMMERCIAL    Vanuatu    Coldwell Banker LLC    10312    10312
COLDWELL BANKER    Venezuela    Coldwell Banker Corporation*    25462-97    209784
COLDWELL BANKER    Venezuela    Coldwell Banker Corporation*    25465-97    9130
COLDWELL BANKER CB & Design    Venezuela    Coldwell Banker Corporation*    327-97    208476
COLDWELL BANKER CB & Design    Venezuela    Coldwell Banker Corporation*    328-98    8947
COLDWELL BANKER COMMERCIAL    Venezuela    Coldwell Banker Corporation*    02-99    215483
COLDWELL BANKER COMMERCIAL    Venezuela    Coldwell Banker Corporation*    03-99    11041
COLDWELL BANKER PREVIEWS    Venezuela    Coldwell Banker Corporation*    25463-97    9309
COLDWELL BANKER PREVIEWS    Venezuela    Coldwell Banker Corporation*    25466-97    209785
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Venezuela    Coldwell Banker Corporation*    25344-05    277582
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Venezuela    Coldwell Banker Corporation*    25345-05   
COLDWELL BANKER    Viet Nam    Coldwell Banker LLC    11559    9887
COLDWELL BANKER CB & Design    Viet Nam    Coldwell Banker LLC    11560    9888
COLDWELL BANKER COMMERCIAL    Viet Nam    Coldwell Banker LLC    41501    42111
COLDWELL BANKER COMMERCIAL CB & Design    Viet Nam    Coldwell Banker LLC    4-2010-24880   
COLDWELL BANKER PREVIEWS    Viet Nam    Coldwell Banker LLC    41500    43732
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Viet Nam    Coldwell Banker LLC    4/2010/24879   
COLDWELL BANKER UNIVERSITY    Viet Nam    Coldwell Banker LLC    4-2010-19907   
COLDWELL BANKER UNIVERSITY & Cap in Circle Design (in color)    Viet Nam    Coldwell Banker LLC    4-2010-19908   
WE NEVER STOP MOVING    Viet Nam    Coldwell Banker LLC    4-2010-24877   
YOUR PERFECT PARTNER    Viet Nam    Coldwell Banker LLC    4-2010-24878   
COLDWELL BANKER    Virgin Islands (British)    Coldwell Banker Corporation*       3169
COLDWELL BANKER CB & Design    Virgin Islands (British)    Coldwell Banker Corporation*       3177
COLDWELL BANKER COMMERCIAL    Virgin Islands (British)    Coldwell Banker Corporation*       1641

 

II-85


Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

COLDWELL BANKER PREVIEWS    Virgin Islands (British)    Coldwell Banker Corporation*       3301
COLDWELL BANKER    Western Samoa    Coldwell Banker Corporation*    3804    3804
COLDWELL BANKER CB & Design    Western Samoa    Coldwell Banker Corporation*    3803    3803
COLDWELL BANKER COMMERCIAL    Western Samoa    Coldwell Banker Corporation*    3801    3801
COLDWELL BANKER PREVIEWS    Western Samoa    Coldwell Banker Corporation*    3802    3802
COLDWELL BANKER    Yemen, Republic of    Coldwell Banker LLC    42186    34253
COLDWELL BANKER    Yemen, Republic of    Coldwell Banker LLC    42187    34254
COLDWELL BANKER CB & Design    Yemen, Republic of    Coldwell Banker LLC    42185    34252
COLDWELL BANKER CB & Design    Yemen, Republic of    Coldwell Banker LLC    42188    34255
COLDWELL BANKER COMMERCIAL    Yemen, Republic of    Coldwell Banker LLC    42182    34249
COLDWELL BANKER COMMERCIAL    Yemen, Republic of    Coldwell Banker LLC    42191    34258
COLDWELL BANKER COMMERCIAL CB & Design    Yemen, Republic of    Coldwell Banker LLC    42184    34251
COLDWELL BANKER COMMERCIAL CB & Design    Yemen, Republic of    Coldwell Banker LLC    42189    34256
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Yemen, Republic of    Coldwell Banker LLC    42183    34250
COLDWELL BANKER PREVIEWS INTERNATIONAL & Sunburst Design    Yemen, Republic of    Coldwell Banker LLC    42190    34257

 

* Coldwell Banker Corporation converted its corporate entity type and name to Coldwell Banker LLC on July 2, 2007. The recordal of that change is being made as renewals or other actions are taken in countries.

Realogy Corporation

Trademark Applications and Registrations

 

Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

REALOGY    Australia    Realogy Corporation    1217725    1217725
REALOGY: THE BUSINESS OF REAL ESTATE    Australia    Realogy Corporation    1217727    1217727
REALOGY    European Community    Realogy Corporation    007044597    007044547
REALOGY: THE BUSINESS OF REAL ESTATE    European Community    Realogy Corporation    007044548    007044548

 

II-86


NRT Utah LLC

Trademark Applications and Registrations**

 

Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

UTAH REAL ESTATE SCHOOL NRT and Design    United States    NRT Utah LLC    78883366    3222469

 

** On August 21, 2008, NRT Utah LLC assigned any common law rights it had to the roofline in the design mark listed above and the words “Utah Real Estate School” to The Lund Group, Inc. in connection with an asset purchase. However, this registration was not assigned since the mark contains the term “NRT”. The registration will either be voluntarily withdrawn by NRT Utah or eventually be cancelled by the PTO for failure to file a Section 8 Affidavit when it is due.

Burnet Realty LLC

Trademark Applications and Registrations

 

Trademark

  

Country Name

  

Owner Name

  

Application No.

  

Registration No.

DISTINCTIVE HOMES    United States    Burnet Realty LLC    74085862    1712157
MAKING DREAMS COME HOME    United States    Burnet Realty LLC    78486327    3127865

 

II-87


COPYRIGHT AND COPYRIGHT APPLICATIONS

U.S. Copyright Registrations

 

Owner/Claimant

Name

  

Title

  

Registration

No.

Burnet Realty LLC    Real estate times - v. 78, no. 1.    TX-61-249
Burnet Realty LLC    Real estate times - v. 78, no. 2.    TX-71-213
Burnet Realty LLC    Real estate times - v. 79, no.1    TX-204-670
Burnet Realty LLC    Real estate times - v. 79, no. 2.    TX-276-031
Burnet Realty LLC    Real estate times - v. 79, no. 3.    TX-336-681
Century 21 Real Estate LLC    Century 21 sales performance system: coaches video ser.    PA-530-364
Century 21 Real Estate LLC    Century 21 sales performance system: sales associate video ser.    PA-530-367
Century 21 Real Estate LLC    2 & 1 Training Program    SR-132-952
Century 21 Real Estate LLC    Century 21 Sales Performance System    SR-133-677
Century 21 Real Estate LLC    Gold market analysis certificate    TX-1-570-001
Century 21 Real Estate LLC    21 Ways to Purchase Property    TX-1-570-002
Century 21 Real Estate LLC    Action Warranty    TX-1-570-003
Century 21 Real Estate LLC    21 Questions that Help Make a House Sell Faster    TX-1-570-004
Century 21 Real Estate LLC    Success Starts with a Super Image    TX-1-570-005
Century 21 Real Estate LLC    VIP Buyer Referral    TX-1-588-502
Century 21 Real Estate LLC    VIP Seller Referral    TX-1-664-218
Century 21 Real Estate LLC    Twenty-One    TX-2-229-537
Century 21 Real Estate LLC    VIP Training: Broker Overview    TX-2-247-998
Century 21 Real Estate LLC    Twenty-One    TX-2-300-041
Century 21 Real Estate LLC    Twenty-One    TX-2-304-240
Century 21 Real Estate LLC    Twenty-One    TX-2-333-788
Century 21 Real Estate LLC    The Century 21 Complete Home Guide    TX-2-337-742
Century 21 Real Estate LLC    Getting Ready Pre-Installation Guide    TX-2-349-485
Century 21 Real Estate LLC    Training Manual for Management.    TX 2-349-490
Century 21 Real Estate LLC    Training Manual for Administration    TX-2-349-491
Century 21 Real Estate LLC    CenturyNet Sales & Listing    TX-2-379-842
Century 21 Real Estate LLC    CenturyNet Management: Sales & Listing    TX-2-379-848
Century 21 Real Estate LLC    Twenty-One    TX-2-402-614
Century 21 Real Estate LLC    The Century 21 Complete Home Guide    TX-2-402-615
Century 21 Real Estate LLC    Twenty-One    TX-2-481-623
Century 21 Real Estate LLC    Twenty-One    TX-2-481-624
Century 21 Real Estate LLC    Twenty-One    TX-2-586-280
Century 21 Real Estate LLC    Twenty-One    TX-2-586-286
Century 21 Real Estate LLC    Twenty-One    TX-2-595-091
Century 21 Real Estate LLC    The Century 21 Complete Home Guide    TX-2-595-542
Century 21 Real Estate LLC    Business and Financial Planning    TX-2-637-007
Century 21 Real Estate LLC    Helping Yourself Through Effective Public Relations: Guidelines for Brokers.    TX-2-637-008
Century 21 Real Estate LLC    International Management Academy    TX-2-637-009
Century 21 Real Estate LLC    Century 21 Sales Performance System Coach’s Guide    TX-2-637-051
Century 21 Real Estate LLC    Century 21 Military Relocation Network Sales Associates Training Program    TX-2-647-995

 

II-88


Owner/Claimant

Name

  

Title

  

Registration

No.

Century 21 Real Estate LLC    Century 21 Recruiting Presentation: User’s Guide    TX-2-648-166
Century 21 Real Estate LLC    Listing Presentation Manual: Instructions    TX-2-652-844
Century 21 Real Estate LLC    Principles of Sales Management    TX-2-652-986
Century 21 Real Estate LLC    VIP Sales Associates Training    TX-2-652-988
Century 21 Real Estate LLC    Property Management Support System    TX-2-652-992
Century 21 Real Estate LLC    Listing Presentation Manual    TX-2-652-994
Century 21 Real Estate LLC    Managers as Leaders    TX-2-655-497
Century 21 Real Estate LLC    Management Development Course    TX-2-655-498
Century 21 Real Estate LLC    Century 21 Investment Practices Course    TX-2-655-509
Century 21 Real Estate LLC    Investment Specialist Course    TX-2-655-724
Century 21 Real Estate LLC    Investment Marketing Course    TX-2-655-725
Century 21 Real Estate LLC    Investment Qualification Course    TX-2-655-732
Century 21 Real Estate LLC    Twenty-One    TX-2-657-200
Century 21 Real Estate LLC    The Century 21 Complete Home Guide    TX-2-657-251
Century 21 Real Estate LLC    VIP Relocation Director’s Training Course: No. 520    TX-2-662-352
Century 21 Real Estate LLC    Twenty-One    TX-2-668-404
Century 21 Real Estate LLC    The Century 21 Complete Home Guide    TX-2-668-405
Century 21 Real Estate LLC    CenturyWriter    TX-2-680-420
Century 21 Real Estate LLC    CenturyNet Guide    TX-2-684-378
Century 21 Real Estate LLC    Administrative Guide    TX-2-684-379
Century 21 Real Estate LLC    Quick Reference-Closing a Transaction-Management Sales & Listing    TX-2-684-414
Century 21 Real Estate LLC    Steps to Success: Regional Overview    TX-2-701-125
Century 21 Real Estate LLC    Steps to Success: Management    TX-2-707-972
Century 21 Real Estate LLC    CenturyNet 4.0 Conversion Training Manual    TX-2-707-973
Century 21 Real Estate LLC    Steps to Success: System Set-up    TX-2-707-974
Century 21 Real Estate LLC    VIP Referral/Relocation Training: Course 101    TX-2-728-452
Century 21 Real Estate LLC    Steps to Success: Sales Associate Overview    TX-2-729-751
Century 21 Real Estate LLC    Steps to Success: Sales Tools    TX-2-729-752
Century 21 Real Estate LLC    Century 21 Presentation Flipchart Instruction Booklet    TX-2-732-090
Century 21 Real Estate LLC    Century 21 Investment Training: Investment Practices Course    TX-2-732-091
Century 21 Real Estate LLC    The Century 21 Complete Home Guide    TX-2-747-278
Century 21 Real Estate LLC    Twenty-One    TX-2-747-279
Century 21 Real Estate LLC    Property Management Support System    TX-2-789-745
Century 21 Real Estate LLC    Breaking Through: Recruiting Presentation, Flipchart Instructional Guide Booklet    TX-2-792-651
Century 21 Real Estate LLC    Managers as Leaders    TX-2-792-652
Century 21 Real Estate LLC    Century 21 Investment Training: Investment Specialist Course    TX-2-792-653
Century 21 Real Estate LLC    Century 21 Management Development Course    TX-2-792-668
Century 21 Real Estate LLC    Twenty-One    TX-2-865-201
Century 21 Real Estate LLC    Twenty-One    TX-2-865-202
Century 21 Real Estate LLC    Operation orbit chartbook and market share intelligence    TX 2-869-323

 

II-89


Owner/Claimant

Name

  

Title

  

Registration

No.

Century 21 Real Estate LLC    Operation orbit notebook of sessions topics    TX 2-892-959
Century 21 Real Estate LLC    CenturyNet FMP Installation and Utilities Guide    TX-2-997-372
Century 21 Real Estate LLC    Setup Guide    TX-2-997-373
Century 21 Real Estate LLC    Twenty-One    TX-3-011-037
Century 21 Real Estate LLC    Twenty-One    TX-3-011-041
Century 21 Real Estate LLC    Twenty-One    TX-3-025-275
Century 21 Real Estate LLC    Century 21 Sellers Service Pledge    TX-3-079-622
Century 21 Real Estate LLC    CenturyNet Financial Management Package: User’s Guide    TX-3-086-254
Century 21 Real Estate LLC    Twenty-One    TX-3-088-127
Century 21 Real Estate LLC    Twenty-One    TX-3-092-347
Century 21 Real Estate LLC    Century 21 Buyer Service Pledge    TX-3-104-464
Century 21 Real Estate LLC    Century 21 Sales Performance System: Sales Associate Workbook    TX-3-110-796
Century 21 Real Estate LLC    VIP Referral/Relocation Training: Course 201 Relocation Director Referral Coordinator    TX-3-110-977
Century 21 Real Estate LLC    Century 21 Sales Performance System: Sales Associate Guide    TX-3-110-978
Century 21 Real Estate LLC    VIP Referral/Relocation Training: Course 301 Broker/Manager    TX-3-110-979
Century 21 Real Estate LLC    CenturyNet Financial Management Package, Version 2.2: FMP Installation & Utilities Guide    TX-3-133-457
Century 21 Real Estate LLC    CenturyNet Financial Management Package: Accounting User Guide    TX-3-137-445
Century 21 Real Estate LLC    Twenty-One    TX-3-197-652
Century 21 Real Estate LLC    Twenty-One    TX-3-197-653
Century 21 Real Estate LLC    Twenty-One    TX-3-200-633
Century 21 Real Estate LLC    VIP Referral/Relocation Training: Course 102    TX-3-701-774
Century 21 Real Estate LLC    Recruiting Flipchart Coach’s Guide    TX-3-788-291
Century 21 Real Estate LLC    1982 Centurion Lapel Pin    VA-339-820
Century 21 Real Estate LLC    Centurion Statue    VA-355-168
Century 21 Real Estate LLC    Centurion, 1987    VA-355-169
Century 21 Real Estate LLC    1988 Centurion Lapel Pin    VAu-168-301

Century 21 Real Estate LLC

& Meredith Corporation

   At home with Century 21. (winter 04)    TX 6-025-339

Century 21 Real Estate LLC

& Meredith Corporation

   At Home with Century 21    TX-6-231-001
Coldwell Banker Real Estate LLC    Fast start / produced by Multi-Media Presentations, Inc.    PA-135-639

 

II-90


Owner/Claimant

Name

  

Title

  

Registration

No.

Coldwell Banker Real Estate LLC    Foundation for Success    TX-6-196-069
Coldwell Banker Real Estate LLC    Coldwell Banker Real Estate Corporation Personal retriever dog sign rider    VA-1-134-268
Coldwell Banker Real Estate, Inc. i    The Action plan    TX-1-783-795
Coldwell Banker Residential Real Estate LLC    Fast start training manual (instructor’s guide) : pt. II    TX-2-079-881
Coldwell Banker Residential Real Estate LLC    Masterscourse Farming: MS-501    TX-2-081-904
Coldwell Banker Residential Real Estate LLC    MS-201-technicalskills Workshops    TX-2-082-769
Coldwell Banker Residential Real Estate LLC    Fast Start Sales Associate Workbook    TX-2-083-845
Coldwell Banker Residential Real Estate LLC    Fast start training manual (instructor’s guide) : pt. I    TX-2-083-909
Coldwell Banker Residential Real Estate LLC    SuccessTrack    TX-2-084-735
Coldwell Banker Residential Real Estate LLC    The Home price comparison index : Jan. 1987    TX-2-408-262
Coldwell Banker Residential Real Estate LLC    First quarter 1988 quotables    TX-2-595-842
Coldwell Banker Residential Real Estate LLC    Home price comparison index : a guide for comparing home prices across the nation.    TX-2-628-430
Coldwell Banker Residential Real Estate LLC    Coldwell Banker makes real estate a black tie affair.    TX-2-711-365
Coldwell Banker Residential Real Estate LLC    Homeowners compu-tax delight / by Jack D. Gravis.    TXu-130-810
Coldwell Banker Residential Real Estate LLC    Homebuyers compu-tax delight.    TXu-168-442
Electronic Realty Associates, Inc. ii    Mortgage Watch    VAu-79-570
ERA Franchise Systems LLC iii    ERA management manual; 13-week action program    A451958
ERA Franchise Systems LLC    Methods of management    A564564
ERA Franchise Systems LLC    Operations manual    A564991
ERA Franchise Systems LLC    Buyers protection plan maintenance-service agreement    A845644

 

II-91


Owner/Claimant

Name

  

Title

  

Registration

No.

ERA Franchise Systems LLC    Application buyers protection plan    A852707
ERA Franchise Systems LLC    ERA sales training program; cassette text, filmstrips no. 1-13    A869381
ERA Franchise Systems LLC    Agent training manual    A877902
ERA Franchise Systems LLC    Buyers protection plan agreement    A903945
ERA Franchise Systems LLC    Residential seller’s warranty agreement    A903946
ERA Franchise Systems LLC    Buyers protection plan sellers assignment    A903947
ERA Franchise Systems LLC    Home sellers protection plan application    A906702
ERA Franchise Systems LLC    ERA guaranteed sales plan sales and equity advance program    JP20364
ERA Franchise Systems LLC    Showing the home    JP20365
ERA Franchise Systems LLC    Handling listing objections    JP20366
ERA Franchise Systems LLC    Obtaining buyer prospects    JP20367
ERA Franchise Systems LLC    Listing sources    JP20368
ERA Franchise Systems LLC    Servicing the listing; filmstrip    JP20369
ERA Franchise Systems LLC    Listing appointment techniques    JP20370
ERA Franchise Systems LLC    Overcoming buyer objections    JP20371
ERA Franchise Systems LLC    Presenting the offer    JP20372
ERA Franchise Systems LLC    Counseling the buyer    JP20373
ERA Franchise Systems LLC    Agent listing training    N43818
ERA Franchise Systems LLC    Listing appointment techniques    N43819
ERA Franchise Systems LLC    Listing sources    N43820
ERA Franchise Systems LLC    Showing the home    N43821
ERA Franchise Systems LLC    Career opportunity I    N43822
ERA Franchise Systems LLC    Obtaining buyer prospects    N43823
ERA Franchise Systems LLC    Handling listing objections    N43824
ERA Franchise Systems LLC    Overcoming buyer objections    N43825
ERA Franchise Systems LLC    Servicing the listing    N43826
ERA Franchise Systems LLC    ERA guaranteed sales plan and equity advance program    N43827
ERA Franchise Systems LLC    Counseling the buyer    N43828
ERA Franchise Systems LLC    Career opportunity II    N43829
ERA Franchise Systems LLC    Presenting the offer    N43830
ERA Franchise Systems LLC    [EIS]    TX 3-501-505
ERA Franchise Systems LLC    The Blueprint-II Program Suite    TX-2-000-230
ERA Franchise Systems LLC    The Moving Experience: ERA real estate consumer guide to relocation.    TX-269-524
ERA Franchise Systems LLC    ERA sales training program; cassette text, filmstrips no. 1-13    TX-2-949
ERA Franchise Systems LLC.    ERA Home Buyer Program: Appraisal Authorization    TX-352-806
ERA Franchise Systems LLC    ERA Home Buyer Program: ERA Broker’s Application for Sellers    TX-352-807
ERA Franchise Systems LLC.    Workbook for Certification Training, ERA Certified Real Estate Specialist    TX-382-801
ERA Franchise Systems LLC    Answers: The 91 Most Frequently Asked Questions and Answers about Buying or Selling a Home    TX-4-331-188
ERA Franchise Systems LLC    ERA Affiliate Internet Manager: User Manual    TX-4-776-598
ERA Franchise Systems LLC    ERA Advertiser    TX-70-933

 

II-92


Owner/Claimant

Name

  

Title

  

Registration

No.

ERA Franchise Systems LLC    The Home Sellers Guide    TX-744-046
ERA Franchise Systems LLC    Blueprint for Success: Basics of Successful Real Estate Business Management    TX-840-298
ERA Franchise Systems LLC.    No Down Payment (Louisiana)    TX-929-991
ERA Franchise Systems LLC    Reduced Interest Rate (Louisiana)    TX-929-992
ERA Franchise Systems LLC    Reduce Interest Rate    TX-929-993
ERA Franchise Systems LLC    No Down Payment    TX-929-994
ERA Franchise Systems LLC    No Down Payment (Louisiana)    TX-929-995
ERA Franchise Systems LLC    Reduced Interest Rate (Louisiana)    TX-929-996
ERA Franchise Systems LLC    No Down Payment    TX-929-997
ERA Franchise Systems LLC    Reduced Interest Rate    TX-929-998
ERA Franchise Systems LLC    Co-ownership Agreement (Louisiana)    TX-929-999
ERA Franchise Systems LLC.    Co-ownership Agreement    TX-930-000

 

i

Coldwell Banker Real Estate, Inc. changed its name to Coldwell Banker Real Estate Services, Inc. in January 1991 and then dissolved and was replaced by Coldwell Banker Real Estate Services LLC.

ii

Electronic Realty Associates, Inc.’s assets were purchased by ERA Acquisition Co. which was formed in January 1996 and then changed its name to ERA Franchise Systems, Inc. on February 26, 1996. ERA Franchise Systems, Inc. changed its name to ERA Franchise Systems LLC in July 2007.

iii

ERA Franchise Systems, Inc. changed its name to ERA Franchise Systems LLC in July 2007. An Affidavit of Name Change was sent to the U.S. Copyright Office for recordation on January 14, 2010. As of January 13, 2011, a Certificate of Recordation has not yet been received.

 

II-93


Schedule III to the

Collateral Agreement

COMMERCIAL TORT CLAIMS

ERA Franchise Systems, Inc. v. TMG Real Estate Services, L.L.C., Michael Herman Levitin, Sandra Morgan Levitin, Sandra J. Holmes, and H – Towne Realty.com, L.L.C. – The amount at issue was $8,295,429, as ERA seeks past due and other fees resulting from to defendants’ breaches of the Franchise Agreement. The case was venued in the United States District Court for the Southern District of Texas, Case No.: H-06-cv-02765. A settlement was reached in or around July, 2007 requiring defendants to pay $3.5 million. A Stipulation on Settlement was filed with the court on 12/31/07. The settlement required defendants to make one $10K payment, then monthly payments starting 1/1/08. The first $10K payment was sent to the lock-box on 12/21/07. Since then, Defendants have made sporadic payments. Our outside counsel has sent multiple default letters.

Century 21 Real Estate LLC f/k/a Century 21 Real Estate Corporation v. Bic Pho, David McCain, Century 21 Su Casa and Century 21 Ruby; Su Casa Realty/Investment, Inc. Vision Quest 21, Inc. and Does 1 through 100 – The amount at issue is $1,305,480.12, as Century 21 seeks past due and other fees resulting from the defendants’ breaches of the Franchise Agreement. The case is venued in the Superior Court of California, County of Santa Clara, Case No. 106CV067150. On April 1, 2008, the court entered judgment against David McCain in the amount of $1,940,596.82. Mr. McCain filed for chapter 7 bankruptcy on June 11, 2008 and received a discharge on December 1, 2008, although the trustee is continuing to search for assets. Other than the $27,487 Century 21 previously received, the trustee’s final report indicated that Century 21 will receive no additional distribution from the estate.

Sotheby’s International Realty Affiliates, Inc. v. Kimberly K. Poston and Poston Properties, LLC, formerly d/b/a Poston Properties Sotheby’s International Realty – The amount at issue is $1,025,621.48, as Sotheby’s seeks past due and other fees resulting from the defendants’ breaches of the Franchise Agreement. The case is venued in the Superior Court of New Jersey, County of Morris, Docket No: MRS-L-1535-06. Judgment was entered in the amount of $1,190,992.26. Kimberly Poston obtained a Chapter 7 discharge, but our judgment was deemed non-dischargeable and survived. Aubyn Shettle has the judgment for collection. The franchisee-LLC is inactive.

In re: Timothy Robert Fore and Patti Jo Fore (a/k/a Patti Jo Veneklase-Fore). Debtors Century 21 Real Estate LLC v. Timothy R. Fore and Patti Jo Fore – The amount at issue is $5,230,489.05, as Century 21 seeks past due and other fees resulting from defendants’ breaches of the Franchise Agreement. The case is venued in the Unites States Bankruptcy Court for the Western District of Michigan, Case No.: 06-05482 (JRH). On November 26, 2007, the chapter 7 trustee filed a pleading advising creditors of a potential distribution and setting a bar date for the filing of proofs of claim 90 days from November 26, 2007. As C21 has already filed a proof of claim, it does not need to take any action at this time. Any distributions to creditors will be

 

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minor. On October 28, 2008, the chapter 7 trustee filed a proposed final report which reflects that the trustee has generated an additional $13,500 in the Pearson-Cook bankruptcy estate. The trustee’s proposed final report proposes to pay this amount to chapter 7 administrative creditors and priority creditors. Secured creditors are to receive no additional distribution under the final report and unsecured creditors are to receive no distribution. We did not object to the trustee’s proposed final report. The bankruptcy case of the franchisee is closed.

Century 21 Real Estate, LLC vs. Perfect Gulf Properties, Inc, Perfect Gulf Properties I, LLC, Hudson Morgan Investments, Inc., T&W Management, Inc d/b/a T&W Management, LLC, Douglas McPherson, Robert C.E. Williams, Jimmy Aviram, Michael Weber, Clifford R. Morgan, II, Arthur J. Hudson, Pam Wolters-. On August 5, 2010, the Court entered judgment in favor of Century 21 Real Estate, LLC and against Perfect Gulf Properties I, LLC, Douglas McPherson, Robert C.E. Williams, Jimmy Aviram and Michael Weber, jointly and severally, in the amount of $35,711.73. The court further ordered that Century 21 Real Estate, LLC shall further recover from Perfect Gulf Properties I, LLC, Douglas McPherson, Robert C.E. Williams, Jimmy Aviram and Michael Weber, jointly and severally, the additional sum of $1,352,475.40 and that Century 21 Real Estate, LLC shall further recover from Robert C.E. Williams, Jimmy Aviram and Michael Weber, jointly and severally, the additional sum of $6,959.00. The judgment has been forwarded to collection counsel. Douglas McPherson filed for Bankruptcy protection.

Century 21 Real Estate LLC v. William T. Mountain, John R. Kersten and Carol Mountain – This matter was filed on September 15, 2008. The amount at issue was $185,000.00 due under a Promissory Note on which the Defendants failed to make payments when they became due. Judgment in the amount of $179,623.65 was entered in the State of Michigan in the Circuit Court for the County of Oakland, Case No. 08-094554-CK on 9/15/2008. William Mountain and Carol Mountain filed for chapter 7 bankruptcy on December 23, 2010.

Century 21 Real Estate LLC v. John R. Kersten and Elizabeth Kersten – This matter was filed on September 15, 2008. The amount at issue is $987,364.35 due under Promissory Notes on which the Defendants failed to make the required payments when they became due. Judgment in the amount of $987,364.35 was entered in the State of Michigan in the Circuit Court for the County of Oakland, Case No. 08-094555-CK on 9/15/2008. Collection action was undertaken against Mr. Kersten until he filed for bankruptcy protection in mid-2009. To our knowledge, Mrs. Kersten has not yet filed for bankruptcy, and further collection action may be permitted against her. Kersten was discharged from the bankruptcy. However, the trustee is still attempting to liquidate assets.

Century 21 Real Estate LLC v. Town & Country – Sterling Heights, Inc, d/b/a Century 21 Town and Country, and John Kersten, jointly and severally – This matter was filed on September 15, 2008. The amount at issue is $4,319,866.66, plus interest, late charges, attorney’s fees and other costs as Century 21 seeks collection due to breach of various franchise agreements and promissory notes and guaranties entered into between Plaintiff and Defendants’. The case is venued in the State of Michigan, in the Circuit Court for the County of Oakland, Case No. 08-094547-CK, and a Judgment was entered against all Defendants October 15, 2008. Collection action was initiated against Sterling Heights, Inc. until it filed for bankruptcy protection in early

 

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2009. Collection action was also initiated against Mr. Kersten until he filed for bankruptcy protection in mid-2009.

Coldwell Banker Real Estate Corporation v. CBD Realty, Corp d/b a Coldwell Banker Dynamic Realty; Henry Melendez; Joel Olivas d/b/a Coldwell Banker Dynamic Realty and Citywide Enterprises, Inc. – The amount at issue is $1,150,000.00 as Coldwell Banker seeks collection of a Judgment previously entered in the Superior Court of California, County of Los Angeles, East District, Case No. KC045564 J in the amount of $388,795.40 on September 20, 2005 as well as past due and other fees resulting from the defendants’ breaches of the Franchise Agreement which were encompassed in a settlement agreement reached between the parties on January 31, 2008. The case was venued in the United States District Court, Central District of California, Case No. EDCV07-00447 SGL (OPX). Defendants breached the terms of the settlement agreement and as a result, judgment was entered in the amount of $1,150,000.00 on March 18, 2008. Coldwell Banker is currently trying to collect on this judgment.

NRT New England LLC d/b/a Coldwell Banker Residential Brokerage v. Lennar Hingham Holdings, LLC; Portside LR Associates LLC; LR Overlook Phase II LLC, Lennar Corporation, Roseland Property Company. This matter relates to a termination of sales and marketing agreements on three condominium projects. The amounts at issue consist of marketing fees of approximately $535,000, termination fees of approximately $1,000,000 and substantial lost profits and other damages. The case was filed in December 2007 and is venued in the Business Litigation Division of the Suffolk County Superior Court, Boston Massachusetts.

In Re: Robert Dyson and Loraine Dyson-. On October 31, 2008, Robert and Loraine Dyson (the “Dyson’s”) filed a voluntary chapter 7 bankruptcy proceeding with the United States Bankruptcy Court for the Southern District of California. The Dyson’s along with Dyson & Dyson of California, Inc. and Dyson & Dyson of Las Vegas, Inc. are makers and co-makers under a Development Advance Promissory Note held by Sotheby’s International Realty Affiliates LLC dated October 9, 2007 in the amount of $1,479,618.00. The obligations of the borrowers are secured as set forth in the Security Agreement dated October 9, 2007. We filed a Proof of Claim in the bankruptcy action in the amount of $11,004,094.15 which consists of outstanding royalties, lost future profits and Development Advance Promissory Note obligation. The Dyson’s were discharged. However, the trustee is attempting to liquidate assets.

Century 21 Real Estate LLC v. HT Brown Real Estate, Inc. and Hollis T. Brown – judgment obtained for $405,534.95 based on confession of judgment in promissory note for outstanding royalty fees. On November 5, 2010, we obtained a second judgment in the amount of $3,234,019.15. The judgment has been forwarded to collection counsel. The court recently entered a show cause order requiring Mr. Brown to appear for an asset deposition in February 2011.

Coldwell Banker Real Estate LLC v. Stucky & Associates, Inc. f/d/b/a Coldwell Banker Stucky & Associates Realtors and Franklin J. Stucky – Stucky currently owes and is indebted

 

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to Coldwell Banker the total sum of $1,110,729.24. Judgment has been entered against Stucky in New Jersey for $466,501.17. The judgment is being domesticated and executed upon in Kansas. In July, 2009, a second action was commenced in Kansas for $644,228.07, for the remaining fees and notes due and owing from Stucky. The second action is still pending.

NRT New York LLC d/b/a Corcoran Sunshine Marketing Group v. Turks, Ltd. This matter relates to a termination of an exclusive marketing agreement for a new development condominium project located in the Turks and Caicos. The amounts at issue consists of accrued and reimbursable expenses in the amount of approximately $40,000, termination fees of approximately $474,000 and progress payments on commissions in the amount of approximately $993,075.13. The case was filed in April 2009 and is venued in the United States District Court, Southern District of New York before Justice Hellerstein. In approximately October of 2009, a Receiver in Turks and Caicos was appointed for the Defendant. A Consent Judgment was entered into in the amount of $2,041,890.38 (which includes NY statutory interest) and a claim was filed in said amount with the Receiver by local counsel.

Sotheby’s International Realty, Inc. v. Donald Deutsch – The amount at issue is $1,800,000, resulting from Deutsch’s breach of a listing agreement with Sotheby’s International Realty (“SIR”). Deutsch engaged SIR to sell his properties located in Amaganset, New York. SIR procured a buyer for Deutsch’s properties, and Deutsch closed on the sale of the properties for a purchase price of $30,000,000 to the buyer procured by SIR in October 2010. Deutsch defaulted on his obligations to pay SIR a commission. The Verified Complaint was filed on January 11, 2011 and the case is venued in New York State Supreme Court in New York County, Index Number 650078/2011. SIR is seeking damages against Deutsch for breach of contract, quantum meruit and fraud.

ERA Franchise Systems LLC v. Champion Real Estate Services, LLC & Paul Hogge; ERA FranchiseSystems LLC v. Champion Real Estate Services, LLC & Champion Homes Realty, LLC . The amount at issue is $1,306,073. One judgment, in the amount of $149,095.74, was entered against Champion Real Estate Services, LLC (former franchisee) and Paul Hogge on June 10, 2009. A second lawsuit was filed on August 18, 2009. We have a claim against the successor company to the former franchisee (Champion Homes Realty, LLC), as a result of the fraudulent transfers of assets.

Century 21 Real Estate LLC v. Oyoque and Espinoza, Inc., Oyoque Martinez, Inc., Excellence Real Estate & Investments, Inc., Oyoque Enterprises, Inc., Excellence of Alhambra, Inc, Excellence of Lynwood, Inc., Miguel Oyoque, Gracie Oyoque, et al.– Case No.  435594 – Oyoque and a number of corporate entities owned by him owe Century 21 a total sum of $2,097,302.65. All of the franchise agreements are terminated. A lawsuit was filed on April 14, 2010. The action is being litigated.

Century 21 Real Estate LLC v. Dabbs & Associates, Inc., a/k/a Dabbs & Associates Realty, Inc. (“Dabbs & Associates”), Dabbs South, Inc., Dabbs Southwest, Inc., Dabbs Corporate, Inc., and Dabbs Executives, Inc. – Century 21 received a judgment against the multiple

 

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corporate entities of this terminated franchisee in the amount of $1,087,992.50 in total. The matter was withdrawn against the guarantor Karen Capriotti due to a bankruptcy filing, but is being re-filed due to the bankruptcy petition being dismissed.

NRT New York LLC d/b/a Citihabitats v. FD Herald Towers  This matter concerns a breach of an exclusive marketing agreement for a rental to condominium conversion project located in New York, New York. The amounts at issue arise from unreimbursed marketing and other expenses in the amount of $825,000, lost commissions in the amount of approximately $1,899,752 and a termination fee in the amount of $200,000. The case was filed in November of 2008 in the Supreme Court of the State of New York, County of New York. The parties are engaged in discovery.

Century 21 Real Estate LLC, f/k/a Century 21 Real Estate Corporation v. AKS Associates, Inc., a New Hampshire Corporation, d/b/a Century 21 Thackston & Co.; and Richard H. Thackston, III, and Individual.  On December 11, 2009, the Superior Court of New Jersey, Law Division, Morris County entered judgment in favor of Century 21 Real Estate LLC and against AKS Associates, Inc. and Richard H. Thackston, III, jointly and severally, in the amount of $1,343,588.85, plus post judgment interest. Richard Thackston, III filed for Chapter 7 Bankruptcy on or about April 30, 2010. He received a discharge on or about October 28, 2010, and a no asset report was filed.

COLDWELL BANKER REAL ESTATE LLC v. EJL Investment, a California Corporation doing business as COLDWELL BANKER PENINSULA; BERNARD LEUNG, individually and doing business as COLDWELL BANKER PENINSULA; MARLENE NABONG, individually and doing business as COLDWELL BANKER PENINSULA, and DOES 1 through 10.  On September 14, 2010, the Superior Court of California, County of San Mateo, entered Default Judgment in favor Coldwell Banker Real Estate, LLC and against Defendants EJL Investment, a California corporation doing business as Coldwell Banker Peninsula, Bernard Leung, an individual, and Marlene Nabong, an individual, jointly and severally, in the amount of $1,535,549.10. The Judgment has been forwarded to collection counsel.

Janki v. AK Capital 5, L.L.C. This matter arises out of an apparent fraud committed by a person (“Imposter”) who falsely claimed to have authority to sell a vacant lot owned by a corporation, AK Capital 5, L.L.C. (“AK Capital”). A TRG owned company, American Title Company of Houston (“ATC”), acted as title agent on the “sale,” that closed on or about September 30, 2008. Following the filing of a lawsuit involving the innocent purchaser and AK Capital, the title insurance underwriter ended up incurring costs of approximately $649,000 to resolve the claim made by the innocent buyer under her title insurance policy. Thereafter, ATC indemnified the underwriter for the loss. ATC is seeking to recover those funds from Theophilis, L.L.C d/b/a Century 21 Premier Gold Properties, the real estate broker who listed the property on behalf of the Imposter, claiming negligence, negligent misrepresentation, and statutory fraud.

 

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PHH Mortgage Corporation f/k/a Cendant Mortgage Corporation and Apex Real Estate Information Services, LLP n/k/a/ Title Resource Group Settlement Services, LLC v. Posner, Posner & Associates, P.C., Jane Posner, Esq., and Martin Posner, Esq. On January 20, 2009, PHH and TRGSS files its Complaint against the Posners, former closing attorneys/agents for PHH, assigned by TRGSS in the Supreme Court of New York, New York County. Between 2002 and 2006, the Posners, in acting as closing attorneys/agents, failed to timely record transaction-related documents in connection with approximately 320 closings. Pursuant to a November 24, 2010 settlement agreement, Posners paid plaintiffs $400,000 which was split equally between PHH and TRGSS. PHH has contacted the Putnam County DA’s office, however, they have declined to file criminal charges against the Posners. Mrs. Posner was convicted in relation to closings involving another lender.

Skyline Title, LLC and Title Resource Group Affiliates Holdings, LLC v. Liberty Agency Holdings, LLC, Liberty Title Agency, LLC, Brain H. Madden and Albert Yorio. On or about April 1, 2009, Skyline and TRG filed its Complaint against Liberty Title, Madden and Yorio. Liberty Agency was the managing partner of the joint venture with TRG, Skyline Title Agency. TRG learned that Liberty Agency was misappropriating Skyline’s clients and Skyline’s monies totaling approximately $690,000 and that the JV was underfunded by approximately $300,000. On or about May 1, 2009, we amended our complaint to include Elizabeth D. Madden; Brownstone Abstract, LLC, Liberty Title Agency of Westchester, LLC, and Liberty Westchester, LLC. At the prompting of the court on a motion to dismiss, the complaint against Melissa was withdrawn because all of the known transfers to her have been recovered. TRG dismissed its claims against Elizabeth in exchange for $25,000. In addition to the civil complaint, TRG/Skyline simultaneously notified the Nassau County District Attorney’s office. Brian Madden was promptly indicted. On December 14, 2010, pursuant to a plead deal, Mr. Madden pled guilty to wire fraud and insurance fraud. Sentencing is scheduled for March 29, 2011.

 

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Schedule IV to the

Collateral Agreement

FILING OFFICES

 

Grantor

  

Location of Filing Office

Burrow Escrow Services, Inc.

   California

Coldwell Banker Real Estate LLC

   California

Coldwell Banker Residential Brokerage Company

   California

Coldwell Banker Residential Real Estate LLC

   California

Coldwell Banker Residential Referral Network

   California

Cornerstone Title Company

   California

Equity Title Company

   California

Guardian Title Company

   California

National Coordination Alliance LLC

   California

Realogy Operations LLC

   California

Referral Network Plus, Inc.

   California

Valley of California, Inc.

   California

West Coast Escrow Company

   California

Colorado Commercial, LLC

   Colorado

Guardian Title Agency, LLC

   Colorado

NRT Colorado LLC

   Colorado

Referral Network, LLC

   Colorado

Associated Client Referral LLC

   Delaware

Better Homes and Gardens Real Estate Licensee LLC

   Delaware

Better Homes and Gardens Real Estate LLC

   Delaware

Burgdorff LLC

   Delaware

Burgdorff Referral Associates LLC

   Delaware

Career Development Center, LLC

   Delaware

Cartus Asset Recovery Corporation

   Delaware

Cartus Corporation

   Delaware

Cartus Partner Corporation

   Delaware

CDRE TM LLC

   Delaware

Century 21 Real Estate LLC

   Delaware

CGRN, Inc.

   Delaware

Coldwell Banker LLC

   Delaware

Coldwell Banker Real Estate Services LLC

   Delaware

 

IV-1


Grantor

  

Location of Filing Office

Coldwell Banker Residential Brokerage LLC

   Delaware

Domus Intermediate Holdings Corp.

   Delaware

Equity Title Messenger Service Holding LLC

   Delaware

ERA Franchise Systems LLC

   Delaware

FedState Strategic Consulting, Incorporated

   Delaware

First California Escrow Corporation

   Delaware

Franchise Settlement Services LLC

   Delaware

FSA Membership Services, LLC

   Delaware

Global Client Solutions LLC

   Delaware

Guardian Holding Company

   Delaware

Gulf South Settlement Services, LLC

   Delaware

Jack Gaughen LLC

   Delaware

Keystone Closing Services LLC

   Delaware

NRT Arizona Commercial LLC

   Delaware

NRT Arizona LLC

   Delaware

NRT Arizona Referral LLC

   Delaware

NRT Columbus LLC

   Delaware

NRT Commercial LLC

   Delaware

NRT Commercial Utah LLC

   Delaware

NRT Development Advisors LLC

   Delaware

NRT Devonshire LLC

   Delaware

NRT Hawaii Referral, LLC

   Delaware

NRT LLC

   Delaware

NRT Mid-Atlantic LLC

   Delaware

NRT Missouri LLC

   Delaware

NRT Missouri Referral Network LLC

   Delaware

NRT New England LLC

   Delaware

NRT New York LLC

   Delaware

NRT Northfork LLC

   Delaware

NRT Philadelphia LLC

   Delaware

NRT Pittsburgh LLC

   Delaware

NRT Referral Network LLC

   Delaware

NRT Relocation LLC

   Delaware

NRT REOExperts LLC

   Delaware

NRT Settlement Services of Missouri LLC

   Delaware

 

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Grantor

  

Location of Filing Office

NRT Settlement Services of Texas LLC

   Delaware

NRT Sunshine Inc.

   Delaware

NRT Utah LLC

   Delaware

ONCOR International LLC

   Delaware

Real Estate Referral LLC

   Delaware

Real Estate Referrals LLC

   Delaware

Real Estate Services LLC

   Delaware

Realogy Corporation

   Delaware

Realogy Franchise Group LLC

   Delaware

Realogy Global Services LLC

   Delaware

Realogy Licensing LLC

   Delaware

Realogy Services Group LLC

   Delaware

Realogy Services Venture Partner LLC

   Delaware

Secured Land Transfers LLC

   Delaware

Sotheby’s International Realty Affiliates LLC

   Delaware

Sotheby’s International Realty Licensee LLC

   Delaware

Sotheby’s International Realty Referral Company, LLC

   Delaware

Title Resource Group Affiliates Holdings LLC

   Delaware

Title Resource Group Holdings LLC

   Delaware

Title Resource Group LLC

   Delaware

Title Resource Group Services LLC

   Delaware

Title Resources Incorporated

   Delaware

TRG Services, Escrow, Inc.

   Delaware

World Real Estate Marketing LLC

   Delaware

WREM, Inc.

   Delaware

Referral Network LLC

   Florida

St. Joe Title Services LLC

   Florida

The Sunshine Group (Florida) Ltd. Corp.

   Florida

Coldwell Banker Commercial Pacific Properties LLC

   Hawaii

Coldwell Banker Pacific Properties LLC

   Hawaii

Mid-Atlantic Settlement Services LLC

   Maryland

NRT Insurance Agency, Inc.

   Massachusetts

Referral Associates of New England LLC

   Massachusetts

Sotheby’s International Realty, Inc.

   Michigan

Burnet Realty LLC

   Minnesota

 

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Grantor

  

Location of Filing Office

Burnet Title Holding LLC

   Minnesota

Burnet Title LLC

   Minnesota

Home Referral Network LLC

   Minnesota

Market Street Settlement Group LLC

   New Hampshire

The Corcoran Group Eastside, Inc.

   New York

The Sunshine Group, Ltd.

   New York

Coldwell Banker Residential Referral Network, Inc.

   Pennsylvania

TRG Settlement Services, LLP

   Pennsylvania

J. W. Riker – Northern R. I., Inc.

   Rhode Island

Lakecrest Title LLC

   Tennessee

Alpha Referral Network LLC

   Texas

American Title Company of Houston

   Texas

ATCOH Holding Company

   Texas

NRT Texas LLC

   Texas

Processing Solutions LLC

   Texas

TAW Holding Inc.

   Texas

Texas American Title Company

   Texas

Waydan Title, Inc.

   Texas

 

i

Coldwell Banker Real Estate, Inc. changed its name to Coldwell Banker Real Estate Services, Inc. in January 1991 and then dissolved and was replaced by Coldwell Banker Real Estate Services LLC.

ii

Electronic Realty Associates, Inc.’s assets were purchased by ERA Acquisition Co. which was formed in January 1996 and then changed its name to ERA Franchise Systems, Inc. on February 26, 1996. ERA Franchise Systems, Inc. changed its name to ERA Franchise Systems LLC in July 2007.

iii

ERA Franchise Systems, Inc. changed its name to ERA Franchise Systems LLC in July 2007. An Affidavit of Name Change was sent to the U.S. Copyright Office for recordation on January 14, 2010. As of January 13, 2011, a Certificate of Recordation has not yet been received.

 

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ACKNOWLEDGMENT AND CONSENT*

The undersigned hereby acknowledges receipt of a copy of the Collateral Agreement, dated as of February 3, 2011 (the “ Agreement ”), made by the Grantors parties thereto for the benefit of THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as collateral agent (the “ Collateral Agent ”). The undersigned agrees for the benefit of the Collateral Agent and the Secured Parties as follows:

1. The undersigned will be bound by the terms of the Agreement and will comply with such terms insofar as such terms are applicable to the undersigned.

2. The undersigned will notify the Collateral Agent promptly in writing of the occurrence of any of the events described in the second sentence of Section 3.02(a) of the Agreement.

 

[NAME OF ISSUER]
By:    
Name:  
Title:  
Address for Notices:
Fax:  

 

* This consent is necessary only with respect to any Subsidiary the Equity Interests of which are pledged hereunder but which is not also a Grantor.


Exhibit I to the

Collateral Agreement

 

  

SUPPLEMENT NO. [•] (this “ Supplement ”) dated as of [•],

201[•] to the Collateral Agreement dated as of February 3, 2011

(this “ Agreement ”), among REALOGY CORPORATION (the

Company ”), DOMUS INTERMEDIATE HOLDINGS CORP.

(“ Intermediate Holdings ”), each Subsidiary Grantor identified

therein and THE BANK OF NEW YORK MELLON TRUST

COMPANY, N.A., as collateral agent (in such capacity, the

Collateral Agent ”) for the Secured Parties (as defined therein).

A. Reference is made to the Indenture dated as of February 3, 2011 (as amended, restated, supplemented, waived or otherwise modified from time to time, the “ Indenture ”), among the Company, Intermediate Holdings, Holdings, the Subsidiaries of the Company party thereto as guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee (in such capacity, the “ Trustee ”), pursuant to which the Company has duly authorized the issue of 7.875% Senior Secured Notes Due 2019 (as further defined in the Indenture, the “ Notes ”).

B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Indenture or the Collateral Agreement referred to therein, as applicable.

C. The Company, Intermediate Holdings and each of the Subsidiary Grantors have entered into the Collateral Agreement in order to induce the Holders to purchase and otherwise acquire the Notes. Section 7.16 of the Collateral Agreement provides that additional Subsidiaries of the Company may become Grantors under the Collateral Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary (the “ New Grantor ”) is executing this Supplement in accordance with the requirements of the Indenture to become a Grantor under the Collateral Agreement.

Accordingly, the Collateral Agent and the New Grantor agree as follows:

SECTION 1. In accordance with Section 7.16 of the Collateral Agreement, the New Grantor by its signature below becomes a Grantor under the Collateral Agreement with the same force and effect as if originally named therein as a Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of the Collateral Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor thereunder are true and correct on and as of the date hereof. In furtherance of the foregoing, the New Grantor, as security for the payment and performance in full of Secured Obligations, does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Grantor’s right, title and interest in and to the Collateral (as defined in the Collateral Agreement) of the New Grantor. Each reference to a “Grantor” and “Guarantor” in the Collateral Agreement shall be deemed to include the New Grantor. The Collateral Agreement is hereby incorporated herein by reference.


SECTION 2. The New Grantor represents and warrants to the Collateral Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance or other similar laws affecting creditors’ rights generally, (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (iii) implied covenants of good faith and fair dealing.

SECTION 3. The New Grantor is a [company] duly [incorporated] under the law of [ name of relevant jurisdiction ].

SECTION 4. The New Grantor confirms that no Default has occurred or would occur as a result of the New Grantor becoming a Guarantor or a Grantor under the Collateral Agreement.

SECTION 5. This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Collateral Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Grantor and the Collateral Agent. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.

SECTION 6. The New Grantor hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct schedule of (i) any and all Pledged Stock and Pledged Debt Securities now owned by the New Grantor and (ii) any and all Intellectual Property now owned by the New Grantor and (b) set forth under its signature hereto, is the true and correct legal name of the New Grantor and its jurisdiction of organization.

SECTION 7. Except as expressly supplemented hereby, the Collateral Agreement shall remain in full force and effect.

SECTION 8. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 9. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Collateral Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 10. All communications and notices hereunder shall (except as otherwise expressly permitted by the Collateral Agreement) be in writing and given as provided

 

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in Section 15.01 of the Indenture. All communications and notices hereunder to the New Grantor shall be given to it in care of the Company as provided in Section 15.01 of the Indenture.

SECTION 11. The New Grantor agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent.

 

3


IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly executed this Supplement to the Collateral Agreement as of the day and year first above written.

 

[NAME OF NEW GRANTOR],
  by  
     
    Name:
    Title:
    Address:
    Legal Name:
    Jurisdiction of Formation:


THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Collateral Agent,
  by  
     
    Name:
    Title:

 

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Schedule I to

Supplement No. [•] to the

Collateral Agreement

Collateral of the New Grantor

EQUITY INTERESTS

 

Issuer

   Number of
Certificate
   Registered
Owner
   Number and
Class of

Equity Interest
   Percentage
of Equity
Interests

PLEDGED DEBT SECURITIES

 

Issuer

   Principal Amount    Date of Note    Maturity Date

INTELLECTUAL PROPERTY

[Follow format of Schedule II to the

Collateral Agreement.]


Exhibit II to the

Collateral Agreement

APPLE RIDGE SECURITIZATION DOCUMENTS

Conformed copies of the Transfer and Servicing Agreement, the Purchase Agreement, the Receivables Purchase Agreement and the Indenture as those terms are defined in Section 7.19 of this Agreement are included as exhibits to that certain Sixth Omnibus Amendment, dated June 6, 2007, a copy of which was filed as Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2009.

Exhibit 10.11

INTERCREDITOR AGREEMENT

Intercreditor Agreement (this “ Agreement ”), dated as of February 3, 2011, among JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity, with its successors and assigns, and as more specifically defined below, the “ First Lien Senior Priority Representative ”) for the First Lien Senior Priority Secured Parties (as defined below), The Bank of New York Mellon Trust Company, N.A., as Collateral Agent (in such capacity, with its successors and assigns, and as more specifically defined below, the “ First Lien Junior Priority Representative ”) for the First Lien Junior Priority Secured Parties (as defined below), REALOGY CORPORATION (the “ Borrower ”) and each of the other Loan Parties (as defined below) party hereto.

WHEREAS, the Borrower, Domus Intermediate Holdings Corp. (“ Holdings ”), the First Lien Senior Priority Representative and certain financial institutions and other entities are parties to the Credit Agreement dated as of April 10, 2007, as amended or modified by the Incremental Assumption Agreement dated as of September 28, 2009, as amended, modified and supplemented from time to time (the “ Second Lien Incremental Assumption Agreement ”), as proposed to be further amended or modified on the date hereof by the First Amendment, to be dated as of the date hereof (the “ First Amendment ”), and as further amended, modified and supplemented from time to time (the “ Existing Credit Agreement ”; capitalized terms used in this Agreement and not otherwise defined herein shall have the respective meanings assigned thereto in the Existing Credit Agreement), pursuant to which such financial institutions and other entities have made and have agreed to make loans and extend other financial accommodations to the Borrower; and

WHEREAS, the Borrower, Holdings, Domus Holdings Corp., the other Loan Parties thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, are parties to that certain Indenture dated as of the date hereof, as amended, modified and supplemented from time to time (the “ First Lien Junior Priority Indenture ”) governing the $700,000,000 of 7.875% Senior Secured Notes due February 15, 2019 (the “ First Lien Junior Priority Notes ”); and

WHEREAS, the Borrower and the other Loan Parties have granted to the First Lien Senior Priority Representative security interests in the Common Collateral as security for payment and performance of the First Lien Senior Priority Obligations; and

WHEREAS, in connection with the First Amendment and the First Lien Junior Priority Indenture, the Borrower and the other Loan Parties propose to grant to the First Lien Junior Priority Representative security interests in the Common Collateral junior to the security interests granted to the First Lien Senior Priority Representative as security for payment and performance of the First Lien Junior Priority Obligations; and

WHEREAS, it is a condition precedent to the effectiveness of the First Lien Junior Priority Indenture that the parties hereto shall have executed and delivered this Agreement for the purpose of setting forth the relative priority of the liens created by the First Lien Senior Priority Security Documents and the First Lien Junior Priority Security Documents (as such terms are hereinafter defined) in respect of the exercise of the rights and remedies and priorities in respect of the Common Collateral and the application of proceeds thereof; and


NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained and other good and valuable consideration, the existence and sufficiency of which are expressly recognized by all of the parties hereto, the parties agree as follows:

SECTION 1. Definitions .

1.1 Defined Terms . The following terms, as used herein, have the following meanings:

Additional First Lien Junior Priority Agreement ” means any agreement permitted to be designated as such by the First Lien Senior Priority Agreement and the First Lien Junior Priority Agreement.

Additional First Lien Senior Priority Agreement ” means any agreement permitted to be designated as such by the First Lien Senior Priority Agreement and the First Lien Junior Priority Agreement.

Agreement ” has the meaning set forth in the introductory paragraph hereof.

Bankruptcy Code ” means the United States Bankruptcy Code (11 U.S.C. §101 et seq.), as amended from time to time.

Borrower ” has the meaning set forth in the introductory paragraph hereof.

Cash Management Obligations ” means, with respect to any Loan Party or any other Subsidiary of the Borrower, any obligations of such Loan Party or Subsidiary owed to any First Lien Senior Priority Secured Party (or any of its affiliates) in respect of overdrafts and related liabilities or arising from treasury, depositary or other cash management services and facilities (including, but not limited to, intraday, ACH and purchasing card/T&E services) or arising from any automated-clearing-house transfers of funds or from other transactions or arrangements referred to in Section 6.01(w) of the Existing Credit Agreement.

Common Collateral ” means all assets that are both First Lien Senior Priority Collateral and First Lien Junior Priority Collateral.

Comparable First Lien Junior Priority Security Document ” means, in relation to any Common Collateral subject to any First Lien Senior Priority Security Document, the applicable First Lien Junior Priority Security Document that creates a security interest in such Common Collateral, granted by the same Loan Party, as applicable.

DIP Financing ” has the meaning set forth in Section 5.2.

 

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Enforcement Action ” means, with respect to the First Lien Senior Priority Obligations or the First Lien Junior Priority Obligations, the exercise of any rights and remedies with respect to any Common Collateral securing such obligations or the commencement or prosecution of enforcement of any of the rights and remedies with respect to the Common Collateral under, as applicable, the First Lien Senior Priority Documents or the First Lien Junior Priority Documents, or applicable law, including without limitation the exercise of any rights of set-off or recoupment, and the exercise of any rights or remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction or under the Bankruptcy Code.

Existing Credit Agreement ” has the meaning set forth in the first WHEREAS clause of this Agreement.

First Lien Junior Priority Agreement ” means the collective reference to (a) the First Lien Junior Priority Indenture, (b) the First Lien Junior Priority Notes, (c) any Additional First Lien Junior Priority Agreement and (d) any other credit agreement, loan agreement, note agreement, promissory note, indenture, or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, increase, renew, refund, replace (whether upon or after termination or otherwise) or refinance (including by means of sales of debt securities to institutional investors) in whole or in part from time to time (i) the First Lien Junior Priority Notes or (ii) any indebtedness and other obligations outstanding under (x) the First Lien Junior Priority Indenture that is secured pari passu with the First Lien Junior Priority Refinancing Notes, (y) any Additional First Lien Junior Priority Agreement or (z) any other agreement or instrument referred to in this clause (c). Any reference to the First Lien Junior Priority Agreement hereunder shall be deemed a reference to any First Lien Junior Priority Agreement then extant.

First Lien Junior Priority Collateral ” means all assets, whether now owned or hereafter acquired by the Borrower or any other Loan Party, in which a Lien is granted or purported to be granted to any First Lien Junior Priority Secured Party as security for any First Lien Junior Priority Obligation.

First Lien Junior Priority Collateral Agreement ” means the Collateral Agreement, dated as of the date hereof, among Holdings, the Borrower, the other grantors party thereto, and the First Lien Junior Priority Representative, as amended, modified and supplemented from time to time, and any other agreements and documents purporting to grant rights in First Lien Junior Priority Collateral executed and delivered pursuant to any Additional First Lien Junior Priority Agreement.

First Lien Junior Priority Creditors ” means the holders of the First Lien Junior Priority Notes, any holders of Additional First Lien Junior Priority Obligations and any Persons that are otherwise “Secured Parties” (as defined in the First Lien Junior Priority Collateral Agreement) with a First Lien Junior Priority Lien.

First Lien Junior Priority Documents ” means each First Lien Junior Priority Agreement, each First Lien Junior Priority Security Document and each First Lien Junior Priority Guarantee.

First Lien Junior Priority Guarantee ” means any guarantee by any Loan Party of any or all of the First Lien Junior Priority Obligations.

 

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First Lien Junior Priority Indenture ” has the meaning set forth in the third WHEREAS clause of this Agreement.

First Lien Junior Priority Lien ” means any Lien created by the First Lien Junior Priority Security Documents.

First Lien Junior Priority Notes ” has the meaning set forth in the third WHEREAS clause of this Agreement.

First Lien Junior Priority Obligations ” means (a) with respect to the First Lien Junior Priority Indenture and First Lien Junior Priority Notes, all “Secured Obligations” of each Loan Party as defined in the First Lien Junior Priority Collateral Agreement and (b) with respect to each other First Lien Junior Priority Agreement, (i) all principal of and interest (including without limitation any Post-Petition Interest) and premium (if any) on all indebtedness under the First Lien Junior Priority Agreement, and (ii) all guarantee obligations, fees, expenses (including, without limitation, reasonable fees, expenses and disbursements of agents, professional advisers and counsel) and other amounts payable from time to time pursuant to such First Lien Junior Priority Agreement, in each case whether or not allowed or allowable in an Insolvency Proceeding. To the extent any payment with respect to any First Lien Junior Priority Obligation (whether by or on behalf of any Loan Party, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance or a preference in any respect, set aside or required to be paid to a debtor in possession, any First Lien Senior Priority Secured Party, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the First Lien Senior Priority Secured Parties and the First Lien Junior Priority Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.

First Lien Junior Priority Representative ” has the meaning set forth in the introductory paragraph hereof, but shall also include any Person identified as a “First Lien Junior Priority Representative” in any First Lien Junior Priority Agreement other than the First Lien Junior Priority Indenture.

First Lien Junior Priority Secured Parties ” means the First Lien Junior Priority Representative, the First Lien Junior Priority Creditors and any other holders of the First Lien Junior Priority Obligations.

First Lien Junior Priority Security Documents ” means the First Lien Junior Priority Collateral Agreement, each of the security agreements executed and delivered pursuant to any First Lien Junior Priority Agreement and the security agreements and other instruments and documents executed and delivered pursuant to the First Lien Junior Priority Collateral Agreement.

First Lien Senior Priority Agreement ” means the collective reference to (a) the Existing Credit Agreement with respect to any Loans (other than the Second Lien Term Loans or any Loans secured on a pari passu with, or on a junior basis to, such Second Lien Term Loans), (b) any Additional First Lien Senior Priority Agreement and (c) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, increase, renew, refund,

 

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replace (whether upon or after termination or otherwise) or refinance (including by means of sales of debt securities to institutional investors) in whole or in part from time to time the indebtedness and other obligations outstanding under the Existing Credit Agreement that are subject to a First Lien Senior Priority Lien, any Additional First Lien Senior Priority Agreement or any other agreement or instrument referred to in this clause (c) unless such agreement or instrument expressly provides that it is not intended to be and is not a First Lien Senior Priority Agreement hereunder (a “ Replacement First Lien Senior Priority Agreement ”). Any reference to the First Lien Senior Priority Agreement hereunder shall be deemed a reference to any First Lien Senior Priority Agreement then extant, as amended, modified and supplemented from time to time.

First Lien Senior Priority Collateral ” means all assets, whether now owned or hereafter acquired by the Borrower or any other Loan Party, in which a Lien is granted or purported to be granted to any First Lien Senior Priority Secured Party as security for any First Lien Senior Priority Obligation.

First Lien Senior Priority Collateral Agreement ” means the Guarantee and Collateral Agreement, dated as of April 10, 2007, among Holdings, the Borrower, the grantors party thereto and the First Lien Senior Priority Representative, as amended, modified and supplemented from time to time.

First Lien Senior Priority Creditors ” means with respect to (i) the Existing Credit Agreement, “Lenders” with respect to the Term B Loans and the Revolving Facility Loans, “Incremental Revolving Facility Lenders” with respect to Loans secured on a pari passu basis with the Term B Loans, “Incremental Term Lenders” with respect to Loans secured on a pari passu basis with the Term B Loans and “Synthetic L/C Lenders”, “Swingline Lender”, “Issuing Bank” and “Administrative Agent” as such terms are defined in the Existing Credit Agreement, (ii) any other First Lien Senior Priority Agreement, the “Lenders”, “Swingline Lender”, “Issuing Bank” and “Administrative Agent” as such terms are defined in such other First Lien Senior Priority Agreement and (iii) any First Lien Senior Priority Agreement, any Persons that are designated under such First Lien Senior Priority Agreement as the “First Lien Senior Priority Creditors” for purposes of this Agreement or that are otherwise Secured Parties (as defined in the First Lien Senior Priority Collateral Agreement) with a First Lien Senior Priority Lien.

First Lien Senior Priority Documents ” means the First Lien Senior Priority Agreement, each First Lien Senior Priority Security Document and each First Lien Senior Priority Guarantee.

First Lien Senior Priority Guarantee ” means any guarantee by any Loan Party of any or all of the First Lien Senior Priority Obligations.

First Lien Senior Priority Lien ” means any Lien created by the First Lien Senior Priority Security Documents.

First Lien Senior Priority Obligations ” means (a) with respect to the Existing Credit Agreement, all “Loan Obligations” of each Loan Party (as defined in the First Lien Senior Priority Collateral Agreement) that are secured by a First Lien Senior Priority Lien and (b) with respect to each other First Lien Senior Priority Agreement, (i) all principal of and interest (including without limitation any Post-Petition Interest) and premium (if any) on all loans made or other indebtedness issued or incurred pursuant to the First Lien Senior Priority Agreement, (ii) all reimbursement obligations (if any) and

 

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interest thereon (including without limitation any Post-Petition Interest) with respect to any letter of credit or similar instruments issued pursuant to the First Lien Senior Priority Agreement, (iii) all Hedging Obligations, (iv) all Cash Management Obligations, (v) all guarantee obligations, fees, expenses and other amounts payable from time to time pursuant to the First Lien Senior Priority Documents and (vi) any obligations of any Loan Party under or in respect of any Replacement First Lien Senior Priority Agreement. To the extent any payment with respect to any First Lien Senior Priority Obligation (whether by or on behalf of any Loan Party, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance or a preference in any respect, set aside or required to be paid to a debtor in possession, any First Lien Junior Priority Secured Party, any receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the First Lien Senior Priority Secured Parties and the First Lien Junior Priority Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.

First Lien Senior Priority Obligations Payment Date ” means the first date on which (a) the First Lien Senior Priority Obligations (other than those that constitute Unasserted Contingent Obligations) have been paid in full (or cash collateralized or defeased in accordance with the terms of the First Lien Senior Priority Documents), (b) all commitments to extend credit under the First Lien Senior Priority Documents have been terminated, (c) there are no outstanding letters of credit or similar instruments issued under the First Lien Senior Priority Documents (other than such as have been cash collateralized or defeased in accordance with the terms of the First Lien Senior Priority Documents), and (d) the First Lien Senior Priority Representative has delivered a written notice to the First Lien Junior Priority Representative stating that the events described in clauses (a), (b) and (c) have occurred to the satisfaction of the First Lien Senior Priority Secured Parties, which notice shall be delivered by the First Lien Senior Priority Representative promptly after the occurrence of the events described in clauses (a), (b) and (c).

First Lien Senior Priority Representative ” has the meaning set forth in the introductory paragraph hereof. In the case of any Replacement First Lien Senior Priority Agreement, the First Lien Senior Priority Representative shall be the Person identified as such in such Agreement.

First Lien Senior Priority Secured Parties ” means the First Lien Senior Priority Representative, the First Lien Senior Priority Creditors and any other holders of the First Lien Senior Priority Obligations.

First Lien Senior Priority Security Documents ” means the First Lien Senior Priority Collateral Agreement, each of the security agreements executed and delivered pursuant to any First Lien Senior Priority Agreement and the security agreements and other instruments and documents executed and delivered pursuant to the First Lien Senior Priority Collateral Agreement or pursuant to Section 5.09 of the Existing Credit Agreement in order to satisfy the Collateral and Guarantee Requirement, and to cause the Collateral and Guarantee Requirement to be and remain satisfied, with respect to the First Lien Senior Priority Creditors.

Hedging Obligations ” means, with respect to any Loan Party or a Subsidiary of a Loan Party, any obligations of such Loan Party or Subsidiary of a Loan Party owed to any First Lien Senior Priority Creditor (or any of its affiliates) in respect of any commodity, interest rate or currency swap, cap, floor, collar, forward agreement or other exchange or protection agreement or other Swap Agreement any option with respect to any such transaction.

 

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Holdings ” has the meaning set forth in the first WHEREAS clause of this Agreement.

Insolvency Proceeding ” means any proceeding in respect of bankruptcy, insolvency, winding up, receivership, dissolution or assignment for the benefit of creditors, in each of the foregoing events whether under the Bankruptcy Code or any similar federal, state or foreign bankruptcy, insolvency, reorganization, receivership or similar law.

Lien ” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement or any lease in the nature thereof).

Loan Party ” means the Borrower and each direct or indirect subsidiary, affiliate or shareholder (or equivalent) of the Borrower or any of its affiliates that is now or hereafter becomes a party to any First Lien Senior Priority Document or First Lien Junior Priority Document; provided , however , that any Loan Party which is not organized under the laws of the United States of America or any state thereof or the District of Columbia and is not required to be a party to any First Lien Junior Priority Document shall not be considered a Loan Party hereunder. All references in this Agreement to any Loan Party shall include such Loan Party as a debtor-in-possession and any receiver or trustee for such Loan Party in any Insolvency Proceeding.

Person ” means any individual, partnership, limited liability company, joint venture, firm, corporation, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.

Post-Petition Interest ” means any interest or entitlement to fees or expenses or other charges that accrues after the commencement of any Insolvency Proceeding, whether or not allowed or allowable in any such Insolvency Proceeding.

Replacement First Lien Senior Priority Agreement ” has the meaning set forth in the definition of “First Lien Senior Priority Agreement”.

Second Lien Incremental Assumption Agreement ” has the meaning set forth in the first WHEREAS clause of this Agreement.

Second Lien Term Loans ” means the “Second Lien Term Loans” as defined in the Second Lien Incremental Assumption Agreement.

Secured Parties ” means the First Lien Senior Priority Secured Parties and the First Lien Junior Priority Secured Parties.

Subsidiary ” has the meaning set forth in the First Lien Senior Priority Agreement.

 

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Unasserted Contingent Obligations ” shall mean, at any time, First Lien Senior Priority Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (excluding (a) the principal of, and interest and premium (if any) on, and fees and expenses relating to, any First Lien Senior Priority Obligation and (b) contingent reimbursement obligations in respect of amounts that may be drawn under outstanding letters of credit) in respect of which no assertion of liability (whether oral or written) and no claim or demand for payment (whether oral or written) has been made (and, in the case of First Lien Senior Priority Obligations for indemnification, no notice for indemnification has been issued by the indemnitee) at such time.

Uniform Commercial Code ” shall mean the Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.

1.2 Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified, (ii) any reference herein to any Person shall be construed to include such Person’s successors or permitted assigns, (iii) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Sections shall be construed to refer to Sections of this Agreement and (v) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 2. Lien Priorities .

2.1 Subordination of Liens . (a) Any and all Liens now existing or hereafter created or arising in favor of any First Lien Junior Priority Secured Party securing the First Lien Junior Priority Obligations, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise are expressly junior in priority, operation and effect to any and all Liens now existing or hereafter created or arising in favor of the First Lien Senior Priority Secured Parties securing the First Lien Senior Priority Obligations, notwithstanding (i) anything to the contrary contained in any agreement or filing to which any First Lien Junior Priority Secured Party may now or hereafter be a party, and regardless of the time, order or method of grant, attachment, recording or perfection of any financing statements or other security interests, assignments, pledges, deeds, mortgages and other liens, charges or encumbrances or any defect or deficiency or alleged defect or deficiency in any of the foregoing, (ii) any provision of the Uniform Commercial Code, any applicable law or any First Lien Senior Priority Document or First Lien Junior Priority Document or any other circumstance whatsoever and (iii) the fact that any such Liens in favor of any First Lien Senior Priority Secured Party securing any of the First Lien Senior Priority Obligations are (x) subordinated to any Lien securing any obligation of any Loan Party other than the First Lien Junior Priority Obligations or (y) otherwise subordinated, voided, avoided, invalidated or lapsed.

 

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(b) No First Lien Senior Priority Secured Party or First Lien Junior Priority Secured Party shall object to or contest, or support any other Person in contesting or objecting to, in any proceeding (including without limitation, any Insolvency Proceeding), the validity, extent, perfection, priority or enforceability of any security interest in the Common Collateral granted to the other. Notwithstanding any failure by any First Lien Senior Priority Secured Party or First Lien Junior Priority Secured Party to perfect its security interests in the Common Collateral or any avoidance, invalidation or subordination by any third party or court of competent jurisdiction of the security interests in the Common Collateral granted to the First Lien Senior Priority Secured Parties or the First Lien Junior Priority Secured Parties, the priority and rights as between the First Lien Senior Priority Secured Parties and the First Lien Junior Priority Secured Parties with respect to the Common Collateral shall be as set forth herein.

2.2 Nature of First Lien Senior Priority Obligations . The First Lien Junior Priority Representative on behalf of itself and the other First Lien Junior Priority Secured Parties acknowledges that a portion of the First Lien Senior Priority Obligations represents debt that is revolving in nature and that the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, and that the terms of the First Lien Senior Priority Obligations may be modified, extended or amended from time to time, and that the aggregate amount of the First Lien Senior Priority Obligations may be increased, replaced or refinanced, in each event, without notice to or consent by the First Lien Junior Priority Secured Parties and without affecting the provisions hereof. The lien priorities provided in Section 2.1 shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of either the First Lien Senior Priority Obligations or the First Lien Junior Priority Obligations, or any portion thereof.

2.3 Agreements Regarding Actions to Perfect Liens . (a) The First Lien Junior Priority Representative on behalf of itself and the other First Lien Junior Priority Secured Parties agrees that UCC-1 financing statements, patent, trademark or copyright filings or other filings or recordings filed or recorded on behalf of the First Lien Junior Priority Representative shall be in form satisfactory to the First Lien Senior Priority Representative; provided , that , the First Lien Junior Priority Representative shall not be responsible for the filing, form, content or renewal of such UCC financing statements, patent, trademark or copyright filings or other filings or recordings.

(b) The First Lien Junior Priority Representative agrees on behalf of itself and the other First Lien Junior Priority Secured Parties that all mortgages, deeds of trust, deeds and similar instruments (collectively, “ mortgages ”) now or hereafter filed against real property in favor of or for the benefit of The Bank of New York Mellon Trust Company, N.A., as agent of the First Lien Junior Priority Representative and the other First Lien Junior Priority Secured Parties shall be in form satisfactory to the First Lien Senior Priority Representative and shall contain the following notation: “The lien created by this mortgage on the property described herein is junior and subordinate to the lien on such property created by any mortgage, deed of trust or similar instrument now or hereafter granted to the First Lien Senior Priority Representative, and its successors and assigns, in such property, in accordance with the provisions of the Intercreditor Agreement dated as of February 3, 2011 among JPMorgan Chase Bank, N.A., as First Lien Senior Priority Representative, The Bank of New York Mellon Trust Company, N.A., as First Lien Junior Priority Representative, Realogy Corporation, as the Borrower, and the other Loan Parties referred to therein, as amended from time to time.”

(c) The First Lien Senior Priority Representative hereby acknowledges that, to the extent that it holds, or a third party holds on its behalf, physical possession of or “control” (as defined in the Uniform

 

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Commercial Code) over Common Collateral pursuant to the First Lien Senior Priority Security Documents, such possession or control is also for the benefit of, and the First Lien Senior Priority Representative or such third party holds such possession or control as bailee and agent for, the First Lien Junior Priority Representative and the other First Lien Junior Priority Secured Parties solely to the extent required to perfect their security interest in such Common Collateral (such bailment and agency for perfection being intended, among other things, to satisfy the requirements of Sections 8-301(a)(2) and 9-313(c) of the Uniform Commercial Code). Nothing in the preceding sentences shall be construed to impose any duty on the First Lien Senior Priority Representative (or any third party acting on its behalf) with respect to such Common Collateral or provide the First Lien Junior Priority Representative or any other First Lien Junior Priority Secured Party with any rights with respect to such Common Collateral beyond those specified in this Agreement and the First Lien Junior Priority Security Documents, provided that subsequent to the occurrence of the First Lien Senior Priority Obligations Payment Date, the First Lien Senior Priority Representative shall (i) deliver to the First Lien Junior Priority Representative, at the Borrower’s sole cost and expense, the Common Collateral in its possession or control together with any necessary endorsements to the extent required by the First Lien Junior Priority Documents or (ii) direct and deliver such Common Collateral as a court of competent jurisdiction otherwise directs, and provided , further , that the provisions of this Agreement are intended solely to govern the respective Lien priorities as between the First Lien Senior Priority Secured Parties and the First Lien Junior Priority Secured Parties and shall not impose on the First Lien Senior Priority Secured Parties any obligations in respect of the disposition of any Common Collateral (or any proceeds thereof) that would conflict with prior perfected Liens or any claims thereon in favor of any other Person that is not a Secured Party.

2.4 No New Liens . So long as the First Lien Senior Priority Obligations Payment Date has not occurred, the parties hereto agree that (a) there shall be no Lien, and no Loan Party shall have any right to create any Lien, on any assets of any Loan Party securing any First Lien Junior Priority Obligation if these same assets are not subject to, and do not become subject to, a Lien securing the First Lien Senior Priority Obligations and (b) if any First Lien Junior Priority Secured Party shall acquire or hold any Lien on any assets of any Loan Party securing any First Lien Junior Priority Obligation which assets are not also subject to a First Lien Senior Priority Lien, then the First Lien Junior Priority Representative, upon demand by the First Lien Senior Priority Representative, will without the need for any further consent of any other First Lien Junior Priority Secured Party, notwithstanding anything to the contrary in any other First Lien Junior Priority Document either (i) release such Lien or (ii) assign it to the First Lien Senior Priority Representative as security for the First Lien Senior Priority Obligations (in which case the First Lien Junior Priority Representative may retain a junior lien on such assets subject to the terms hereof). To the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and remedies available to the First Lien Senior Priority Secured Parties, the First Lien Junior Priority Representative and the other First Lien Junior Priority Secured Parties agree that any amounts received by or distributed to any of them pursuant to or as a result of Liens granted in contravention of this Section 2.4 shall be subject to Section 4.1.

SECTION 3. Enforcement Rights .

3.1 Exclusive Enforcement . Until the First Lien Senior Priority Obligations Payment Date has occurred, whether or not an Insolvency Proceeding has been commenced by or against any Loan Party, the First Lien Senior Priority Secured Parties shall have the sole and exclusive right to take and continue any Enforcement Action with respect to the Common Collateral, without any consultation with or consent of any First Lien Junior Priority Secured Party, but subject to the proviso set forth in Section 5.1. Upon the occurrence and during the continuance of a default or an event of default under the First Lien Senior Priority Documents, the First Lien Senior Priority Representative and the other First Lien

 

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Senior Priority Secured Parties may take and continue any Enforcement Action with respect to the First Lien Senior Priority Obligations and the Common Collateral in such order and manner as they may determine in their sole discretion.

3.2 Standstill and Waivers . The First Lien Junior Priority Representative, on behalf of itself and the other First Lien Junior Priority Secured Parties, agrees that, until the First Lien Senior Priority Obligations Payment Date has occurred, subject to the proviso set forth in Section 5.1:

(a) they will not take or cause to be taken any Enforcement Action;

(b) they will not take or cause to be taken any action, the purpose or effect of which is to make any Lien in respect of any First Lien Junior Priority Obligation pari passu with or senior to, or to give any First Lien Junior Priority Secured Party any preference or priority relative to, the Liens with respect to the First Lien Senior Priority Obligations or the First Lien Senior Priority Secured Parties with respect to any of the Common Collateral;

(c) they will not contest, oppose, object to, interfere with, hinder or delay, in any manner, whether by judicial proceedings (including without limitation the filing of an Insolvency Proceeding) or otherwise, any foreclosure, sale, lease, exchange, transfer or other disposition of the Common Collateral by any First Lien Senior Priority Secured Party or any other Enforcement Action taken (or any forbearance from taking any Enforcement Action) by or on behalf of any First Lien Senior Priority Secured Party;

(d) they have no right to (i) direct either the First Lien Senior Priority Representative or any other First Lien Senior Priority Secured Party to exercise any right, remedy or power with respect to the Common Collateral or pursuant to the First Lien Senior Priority Security Documents or (ii) consent or object to the exercise by the First Lien Senior Priority Representative or any other First Lien Senior Priority Secured Party of any right, remedy or power with respect to the Common Collateral or pursuant to the First Lien Senior Priority Security Documents or to the timing or manner in which any such right is exercised or not exercised (or, to the extent they may have any such right described in this clause (d), whether as a junior lien creditor or otherwise, they hereby irrevocably waive such right);

(e) they will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against any First Lien Senior Priority Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, and no First Lien Senior Priority Secured Party shall be liable for, any action taken or omitted to be taken by any First Lien Senior Priority Secured Party with respect to the Common Collateral or pursuant to the First Lien Senior Priority Documents; and

(f) they will not seek, and hereby waive any right, to have the Common Collateral or any part thereof marshaled upon any foreclosure or other disposition of the Common Collateral.

3.3 Judgment Creditors . Except as otherwise specifically set forth in Sections 3.1 and 3.2, the First Lien Junior Priority Representative and the First Lien Junior Priority Secured Parties may

 

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exercise rights and remedies as unsecured creditors against the Borrower or any other Loan Party in accordance with the terms of the First Lien Junior Priority Documents and applicable law; provided that in the event that any First Lien Junior Priority Secured Party becomes a judgment lien creditor as a result of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subject to the terms of this Agreement for all purposes (including in relation to the First Lien Senior Priority Liens and the First Lien Senior Priority Obligations) to the same extent as all other Liens securing the First Lien Junior Priority Obligations are subject to the terms of this Agreement.

3.4 Cooperation . The First Lien Junior Priority Representative, on behalf of itself and the other First Lien Junior Priority Secured Parties, agrees that each of them shall take such actions, at the sole cost and expense of the Loan Parties, as the First Lien Senior Priority Representative shall reasonably request in connection with the exercise by the First Lien Senior Priority Secured Parties of their rights set forth herein.

3.5 No Additional Rights For the Loan Parties Hereunder . Except as provided in Section 3.6, if any First Lien Senior Priority Secured Party or First Lien Junior Priority Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, no Loan Party shall be entitled to use such violation as a defense to any action by any First Lien Senior Priority Secured Party or First Lien Junior Priority Secured Party, nor to assert such violation as a counterclaim or basis for set off or recoupment against any First Lien Senior Priority Secured Party or First Lien Junior Priority Secured Party.

3.6 Actions Upon Breach . (a) If any First Lien Junior Priority Secured Party, contrary to this Agreement, commences or participates in any action or proceeding against any Loan Party or the Common Collateral, such Loan Party, with the prior written consent of the First Priority Secured Representative, may interpose as a defense or dilatory plea the making of this Agreement, and any First Lien Senior Priority Secured Party may intervene and interpose such defense or plea in its or their name or in the name of such Loan Party.

(b) Should any First Lien Junior Priority Secured Party, contrary to this Agreement, in any way take, attempt to or threaten to take any action with respect to the Common Collateral (including, without limitation, any attempt to realize upon or enforce any remedy with respect to this Agreement), or fail to take any action required by this Agreement, any First Lien Senior Priority Secured Party (in its own name or in the name of the relevant Loan Party) or the relevant Loan Party may obtain relief against such First Lien Junior Priority Secured Party by injunction, specific performance and/or other appropriate equitable relief, it being understood and agreed by the First Lien Junior Priority Representative on behalf of each First Lien Junior Priority Secured Party that (i) the First Lien Senior Priority Secured Parties’ damages from its actions may at that time be difficult to ascertain and may be irreparable, and (ii) each First Lien Junior Priority Secured Party waives any defense that the Loan Parties and/or the First Lien Senior Priority Secured Parties cannot demonstrate damage and/or be made whole by the awarding of damages.

SECTION 4. Application of Proceeds of Common Collateral; Dispositions and Releases of Common Collateral; Inspection and Insurance.

4.1 Application of Proceeds; Turnover Provisions . All proceeds of Common Collateral (including without limitation any interest earned thereon) resulting from the sale, collection or other

 

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disposition of Common Collateral in connection with an Enforcement Action, whether or not pursuant to an Insolvency Proceeding, shall be distributed as follows: first to the First Lien Senior Priority Representative for application to the First Lien Senior Priority Obligations in accordance with the terms of the First Lien Senior Priority Documents, until the First Lien Senior Priority Obligations Payment Date has occurred and thereafter , to the First Lien Junior Priority Representative for application to the First Lien Junior Priority Obligations in accordance with the terms of the First Lien Junior Priority Documents. Until the occurrence of the First Lien Senior Priority Obligations Payment Date, any Common Collateral, including without limitation any such Common Collateral constituting proceeds, that may be received by any First Lien Junior Priority Secured Party in violation of this Agreement shall be segregated and held in trust and promptly paid over to the First Lien Senior Priority Representative, for the benefit of the First Lien Senior Priority Secured Parties, in the same form as received, with any necessary endorsements, and each First Lien Junior Priority Secured Party hereby authorizes the First Lien Senior Priority Representative to make any such endorsements as agent for the First Lien Junior Priority Representative (which authorization, being coupled with an interest, is irrevocable).

4.2 Releases of First Lien Junior Priority Lien . (a) Upon any release, sale or disposition of Common Collateral permitted pursuant to the terms of the First Lien Senior Priority Documents that results in the release of the First Lien Senior Priority Lien on any Common Collateral (excluding any sale or other disposition that is expressly prohibited by the First Lien Junior Priority Agreement as in effect on the date hereof unless such sale or disposition is consummated in connection with an Enforcement Action or consummated after the institution of any Insolvency Proceeding), the First Lien Junior Priority Lien on such Common Collateral (excluding any portion of the proceeds of such Common Collateral remaining after the First Lien Senior Priority Obligations Payment Date occurs) shall be automatically and unconditionally released with no further consent or action of any Person.

(b) The First Lien Junior Priority Representative shall promptly execute and deliver such release documents and instruments, in form and substance satisfactory to the Administrative Agent, and shall take such further actions, at the sole cost and expense of the Loan Parties, as the First Lien Senior Priority Representative shall reasonably request to evidence any release of the First Lien Junior Priority Lien described in paragraph (a). The First Lien Junior Priority Representative hereby appoints the First Lien Senior Priority Representative and any officer or duly authorized person of the First Lien Senior Priority Representative, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of the First Lien Junior Priority Representative and in the name of the First Lien Junior Priority Representative or in the First Lien Senior Priority Representative’s own name, from time to time, in the First Lien Senior Priority Representative’s sole discretion, for the purposes of carrying out the terms of this Section 4.2, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this Section 4.2, including, without limitation, any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable).

4.3 Inspection Rights and Insurance . (a) Any First Lien Senior Priority Secured Party and its representatives and invitees may at any time inspect, repossess, remove and otherwise deal with the Common Collateral, and the First Lien Senior Priority Representative may advertise and conduct public auctions or private sales of the Common Collateral, in each case without notice to, the involvement of or interference by any First Lien Junior Priority Secured Party or liability to any First Lien Junior Priority Secured Party.

 

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(b) Until the First Lien Senior Priority Obligations Payment Date has occurred, the First Lien Senior Priority Representative will have the sole and exclusive right (i) to be named as additional insured and loss payee under any insurance policies maintained from time to time by any Loan Party (except that the First Lien Junior Priority Representative shall have the right to be named as additional insured and loss payee so long as its junior lien status is identified in a manner satisfactory to the First Lien Senior Priority Representative); (ii) as among the Secured Parties, to adjust or settle any insurance policy or claim covering the Common Collateral in the event of any loss thereunder and (iii) as among the Secured Parties, to approve any award granted in any condemnation or similar proceeding affecting the Common Collateral.

SECTION 5. Insolvency Proceedings.

5.1 Filing of Motions . Until the First Lien Senior Priority Obligations Payment Date has occurred, the First Lien Junior Priority Representative agrees on behalf of itself and the other First Lien Junior Priority Secured Parties that no First Lien Junior Priority Secured Party shall, in or in connection with any Insolvency Proceeding, file any pleadings or motions, take any position at any hearing or proceeding of any nature, or otherwise take any action whatsoever, in each case that (a) violates, or is prohibited by, this Section 5 (or, in the absence of an Insolvency Proceeding, otherwise would violate or be prohibited by this Agreement), (b) asserts any right, benefit or privilege that arises in favor of the First Lien Junior Priority Representative or First Lien Junior Priority Secured Parties, in whole or in part, as a result of their interest in the Common Collateral or in the First Lien Junior Priority Lien (unless the assertion of such right is expressly permitted by this Agreement) or (c) challenges the validity, priority, enforceability or voidability of any Liens or claims held by the First Lien Senior Priority Representative or any other First Lien Senior Priority Secured Party, or the extent to which the First Lien Senior Priority Obligations constitute secured claims under Section 506(a) of the Bankruptcy Code or otherwise; provided that the First Lien Junior Priority Representative may file a proof of claim in an Insolvency Proceeding, subject to the limitations contained in this Agreement and only if consistent with the terms and the limitations on the First Lien Junior Priority Representative imposed hereby.

5.2 Financing Matters . If any Loan Party becomes subject to any Insolvency Proceeding, and if the First Lien Senior Priority Representative or the other First Lien Senior Priority Secured Parties desire to consent (or not object) to the use of cash collateral under the Bankruptcy Code or to provide financing to any Loan Party under the Bankruptcy Code or to consent (or not object) to the provision of such financing to any Loan Party by any third party (any such financing, “ DIP Financing ”), then the First Lien Junior Priority Representative agrees, on behalf of itself and the other First Lien Junior Priority Secured Parties, that each First Lien Junior Priority Secured Party (a) will be deemed to have consented to, will raise no objection to, nor support any other Person objecting to, the use of such cash collateral or to such DIP Financing, (b) will not request or accept adequate protection or any other relief in connection with the use of such cash collateral or such DIP Financing except as set forth in paragraph 5.4 below, (c) will subordinate (and will be deemed hereunder to have subordinated) the First Lien Junior Priority Liens (i) (x) to such DIP Financing on the same terms as the First Lien Senior Priority Liens are subordinated thereto or (y) if such DIP Financing is secured by Liens which are equally and ratably ranked with the First Lien Senior Priority Liens, to such DIP Financing on the same terms as the First Lien Junior Priority Liens are subordinated to the First Lien Senior Priority Liens (and any such subordination under clause (x) or (y) will not alter in any manner the terms of this Agreement), (ii) to any adequate protection provided to the First Lien Senior Priority Secured Parties and (iii) to any “carve-out” agreed to by the First Lien Senior Priority Representative or the other First Lien Senior Priority Secured Parties, and (d) agrees that notice received two Business Days prior to the entry of an order approving such usage of cash collateral or approving such financing shall be adequate notice.

 

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5.3 Relief From the Automatic Stay . The First Lien Junior Priority Representative agrees, on behalf of itself and the other First Lien Junior Priority Secured Parties, that none of them will seek relief from the automatic stay or from any other stay in any Insolvency Proceeding or take any action in derogation thereof, in each case in respect of any Common Collateral, without the prior written consent of the First Lien Senior Priority Representative.

5.4 Adequate Protection . The First Lien Junior Priority Representative, on behalf of itself and the other First Lien Junior Priority Secured Parties, agrees that none of them shall object, contest, or support any other Person objecting to or contesting, (a) any request by the First Lien Senior Priority Representative or the other First Lien Senior Priority Secured Parties for adequate protection or any adequate protection provided to the First Lien Senior Priority Representative or the other First Lien Senior Priority Secured Parties or (b) any objection by the First Lien Senior Priority Representative or any other First Lien Senior Priority Secured Parties to any motion, relief, action or proceeding based on a claim of a lack of adequate protection or (c) the payment of interest, fees, expenses or other amounts to the First Lien Senior Priority Representative or any other First Lien Senior Priority Secured Party under Section 506(b) or 506(c) of the Bankruptcy Code or otherwise. Notwithstanding anything contained in this Section and in Section 5.2(b) (but subject to all other provisions of this Agreement, including, without limitation, Sections 5.2(a) and 5.3), in any Insolvency Proceeding, (i) if the First Lien Senior Priority Secured Parties (or any subset thereof) are granted adequate protection consisting of additional collateral (with replacement liens on such additional collateral) and superpriority claims in connection with any DIP Financing or use of cash collateral, then in connection with any such DIP Financing or use of cash collateral the First Lien Junior Priority Representative, on behalf of itself and any of the First Lien Junior Priority Secured Parties, may seek or accept adequate protection consisting solely of (x) a replacement Lien on the same additional collateral, subordinated to the Liens securing the First Lien Senior Priority Obligations and such DIP Financing on the same basis as the other Liens securing the First Lien Junior Priority Obligations are so subordinated to the First Lien Senior Priority Obligations under this Agreement, (y) superpriority claims junior in all respects to the superpriority claims granted to the First Lien Senior Priority Secured Parties and (z) without prejudice to any right of any First Lien Senior Priority Secured Party to object thereto, the payment of post-petition interest (provided, in the case of this clause (z), that the First Lien Senior Priority Secured Parties have been granted adequate protection in the form of post-petition interest reasonably satisfactory to them), provided , however , that the First Lien Junior Priority Representative shall have irrevocably agreed, pursuant to Section 1129(a)(9) of the Bankruptcy Code, on behalf of itself and the First Lien Junior Priority Secured Parties, in any stipulation and/or order granting such adequate protection, that such junior superpriority claims may be paid under any plan of reorganization in any combination of cash, debt, equity or other property having a value on the effective date of such plan equal to the allowed amount of such claims and (ii) in the event the First Lien Junior Priority Representative, on behalf of itself and the First Lien Junior Priority Secured Parties, seeks or accepts adequate protection in accordance with clause (i) above and such adequate protection is granted in the form of additional collateral, then the First Lien Junior Priority Representative, on behalf of itself or any of the First Lien Junior Priority Secured Parties, agrees that the First Lien Senior Priority Representative shall also be granted a senior Lien on such additional collateral as security for the First Lien Senior Priority Obligations and any such DIP Financing and that any Lien on such additional collateral securing the First Lien Junior Priority Obligations shall be subordinated to the Liens on such collateral securing the First Lien Senior Priority Obligations and any such DIP Financing (and all obligations relating thereto) and any other Liens granted to the First Lien Senior Priority Secured Parties as adequate protection, with such subordination to be on the same terms that the other Liens securing the First Lien Junior Priority Obligations are subordinated to such First Lien Senior Priority Obligations under this Agreement. The First Lien Junior Priority Representative, on behalf of itself and the other First Lien Junior Priority Secured Parties, agrees that except as expressly set forth in this Section none of them shall seek or accept adequate protection without the prior written consent of the First Lien Senior Priority Representative.

 

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5.5 Avoidance Issues . If any First Lien Senior Priority Secured Party is required in any Insolvency Proceeding or otherwise to disgorge, turn over or otherwise pay to the estate of any Loan Party, because such amount was avoided or ordered to be paid or disgorged for any reason, including without limitation because it was found to be a fraudulent or preferential transfer, any amount (a “ Recovery ”), whether received as proceeds of security, enforcement of any right of set-off or otherwise, then the First Lien Senior Priority Obligations shall be reinstated to the extent of such Recovery and deemed to be outstanding as if such payment had not occurred and the First Lien Senior Priority Obligations Payment Date shall be deemed not to have occurred. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto. Prior to the First Lien Senior Priority Obligations Payment Date (but subject to the first sentence of this Section 5.5), the First Lien Junior Priority Secured Parties agree that none of them shall be entitled to benefit from any avoidance action affecting or otherwise relating to any distribution or allocation made in accordance with this Agreement, whether by preference or otherwise, it being understood and agreed that the benefit of such avoidance action otherwise allocable to them shall instead be allocated and turned over for application in accordance with the priorities set forth in this Agreement.

5.6 Asset Dispositions in an Insolvency Proceeding . In an Insolvency Proceeding, neither the First Lien Junior Priority Representative nor any other First Lien Junior Priority Secured Party shall oppose any sale or disposition of any assets of any Loan Party that is supported by the First Lien Senior Priority Secured Parties, and the First Lien Junior Priority Representative and each other First Lien Junior Priority Secured Party will be deemed to have consented under Section 363 of the Bankruptcy Code (and otherwise) to any sale supported by the First Lien Senior Priority Secured Parties and to have released their Liens on such assets (provided that the First Lien Junior Priority Lien on any proceeds constituting Common Collateral from such sale or disposition remaining after the First Lien Senior Priority Obligations Payment Date occurs shall continue).

5.7 Separate Grants of Security and Separate Classification . Each Secured Party acknowledges and agrees that (a) the grants of Liens pursuant to the First Lien Senior Priority Security Documents and the First Lien Junior Priority Security Documents constitute two separate and distinct grants of Liens and (b) because of, among other things, their differing rights in the Common Collateral, the First Lien Senior Priority Obligations and the First Lien Junior Priority Obligations are fundamentally different from each other and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the First Lien Senior Priority Secured Parties and First Lien Junior Priority Secured Parties in respect of the Common Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then the First Lien Junior Priority Secured Parties hereby acknowledge and agree that all distributions shall be made as if there were separate classes of senior and junior secured claims against the Loan Parties in respect of the Common Collateral, with the effect being that, to the extent that the aggregate value of the Common Collateral is sufficient (for this purpose ignoring all claims held by the First Lien Junior Priority Secured Parties), the First Lien Senior Priority Secured Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of Post-Petition Interest before any distribution is made in respect of the claims held by the First Lien Junior Priority Secured Parties. The First Lien Junior Priority Secured Parties hereby acknowledge and agree to turn over to the First Lien Senior Priority Secured Parties upon written request therefor amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of the preceding sentence, even if such turnover has the effect of reducing the claim or recovery of the First Lien Junior Priority Secured Parties.

 

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5.8 No Waivers of Rights of First Lien Senior Priority Secured Parties . Nothing contained herein shall prohibit or in any way limit the First Lien Senior Priority Representative or any other First Lien Senior Priority Secured Party from objecting in any Insolvency Proceeding or otherwise to any action taken by any First Lien Junior Priority Secured Party not expressly permitted hereunder, including the seeking by any First Lien Junior Priority Secured Party of adequate protection (except as provided in Section 5.4).

5.9 Other Matters . To the extent that the First Lien Junior Priority Representative or any First Lien Junior Priority Secured Party has or acquires rights under Section 363 or Section 364 of the Bankruptcy Code with respect to any of the Common Collateral, the First Lien Junior Priority Representative agrees, on behalf of itself and the other First Lien Junior Priority Secured Parties not to assert any of such rights without the prior written consent of the First Lien Senior Priority Representative unless expressly permitted to do so hereunder.

5.10 Effectiveness in Insolvency Proceedings . This Agreement, which the parties hereto expressly acknowledge is a “subordination agreement” under section 510(a) of the Bankruptcy Code, shall be effective before, during and after the commencement of an Insolvency Proceeding.

SECTION 6. Security Documents.

(a) Each Loan Party and the First Lien Junior Priority Representative, on behalf of itself and the First Lien Junior Priority Secured Parties, agrees that it shall not at any time execute or deliver any amendment or other modification to any of the First Lien Junior Priority Documents inconsistent with or in violation of this Agreement.

(b) Each Loan Party and the First Lien Senior Priority Representative, on behalf of itself and the First Lien Senior Priority Secured Parties, agrees that it shall not at any time execute or deliver any amendment or other modification to any of the First Lien Senior Priority Documents inconsistent with or in violation of this Agreement.

(c) In the event the First Lien Senior Priority Representative enters into any amendment, waiver or consent in respect of any of the First Lien Senior Priority Security Documents for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any First Lien Senior Priority Security Document or changing in any manner the rights of any parties thereunder, then such amendment, waiver or consent shall apply automatically to any comparable provision of the Comparable First Lien Junior Priority Security Document without the consent of or action by any First Lien Junior Priority Secured Party (with all such amendments, waivers and modifications subject to the terms hereof); provided that (other than with respect to amendments, modifications or waivers that secure additional extensions of credit and add additional secured creditors and do not violate the express provisions of the First Lien Junior Priority Agreements), (i) no such amendment, waiver or consent shall have the effect of removing assets subject to the Lien of any First Lien Junior Priority Security Document, except to the extent that a release of such Lien is permitted by Section 4.2, (ii) any such amendment, waiver or consent that materially and adversely affects the rights of the First Lien Junior Priority Secured Parties (other than the First Lien Junior Priority Representative) and does not affect the First Lien Senior Priority Secured Parties in a like or similar manner shall not apply to the First Lien Junior Priority Security Documents without the consent of the First Lien Junior Priority

 

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Representative, (iii) no such amendment, waiver or consent with respect to any provision applicable to the First Lien Junior Priority Representative under the First Lien Junior Priority Documents shall be made without the prior written consent of the First Lien Junior Priority Representative and (iv) notice of such amendment, waiver or consent shall be given to the First Lien Junior Priority Representative no later than 30 days after its effectiveness, provided that the failure to give such notice shall not affect the effectiveness and validity thereof.

SECTION 7. Reliance; Waivers; etc.

7.1 Reliance . The First Lien Senior Priority Documents are deemed to have been executed and delivered, and all extensions of credit thereunder are deemed to have been made or incurred, in reliance upon this Agreement. The First Lien Junior Priority Representative, on behalf of itself and the First Lien Junior Priority Secured Parties, expressly waives all notice of the acceptance of and reliance on this Agreement by the First Lien Senior Priority Secured Parties. The First Lien Junior Priority Documents are deemed to have been executed and delivered and all extensions of credit thereunder are deemed to have been made or incurred, in reliance upon this Agreement. The First Lien Senior Priority Representative expressly waives all notices of the acceptance of and reliance by the First Lien Junior Priority Representative and the First Lien Junior Priority Secured Parties.

7.2 No Warranties or Liability. The First Lien Junior Priority Representative and the First Lien Senior Priority Representative acknowledge and agree that neither has made any representation or warranty with respect to the execution, validity, legality, completeness, collectibility or enforceability of any other First Lien Senior Priority Document or any First Lien Junior Priority Document. Except as otherwise provided in this Agreement, the First Lien Junior Priority Representative and the First Lien Senior Priority Representative will be entitled to manage and supervise their respective extensions of credit to any Loan Party in accordance with law and their usual practices, modified from time to time as they deem appropriate.

7.3 No Waivers. No right or benefit of any party hereunder shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of such party or any other party hereto or by any noncompliance by any Loan Party with the terms and conditions of any of the First Lien Senior Priority Documents or the First Lien Junior Priority Documents.

SECTION 8. Obligations Unconditional.

8.1 First Lien Senior Priority Obligations Unconditional . All rights and interests of the First Lien Senior Priority Secured Parties hereunder, and all agreements and obligations of the First Lien Junior Priority Secured Parties (and, to the extent applicable, the Loan Parties) hereunder, shall remain in full force and effect irrespective of:

(a) any lack of validity or enforceability of any First Lien Senior Priority Document;

(b) any change in the time, place or manner of payment of, or in any other term of, all or any portion of the First Lien Senior Priority Obligations, or any amendment, waiver or other modification,

 

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whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any First Lien Senior Priority Document;

(c) prior to the First Lien Senior Priority Obligations Payment Date, any exchange, release, voiding, avoidance or non-perfection of any security interest in any Common Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of all or any portion of the First Lien Senior Priority Obligations or any guarantee or guaranty thereof; or

(d) any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the First Lien Senior Priority Obligations, or of any of the First Lien Junior Priority Representative, or any Loan Party, to the extent applicable, in respect of this Agreement.

8.2 First Lien Junior Priority Obligations Unconditional. All rights and interests of the First Lien Junior Priority Secured Parties hereunder, and all agreements and obligations of the First Lien Senior Priority Secured Parties (and, to the extent applicable, the Loan Parties) hereunder, shall remain in full force and effect irrespective of:

(a) any lack of validity or enforceability of any First Lien Junior Priority Document;

(b) any change in the time, place or manner of payment of, or in any other term of, all or any portion of the Second Priority Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any First Lien Junior Priority Document;

(c) any exchange, release, voiding, avoidance or non-perfection of any security interest in any Common Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of all or any portion of the First Lien Junior Priority Obligations or any guarantee or guaranty thereof; or

(d) any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the Second Priority Obligations or any First Lien Senior Priority Secured Party in respect of this Agreement.

SECTION 9. Miscellaneous.

9.1 Conflicts . In the event of any conflict between the provisions of this Agreement and the provisions of any First Lien Senior Priority Document or any First Lien Junior Priority Document, the provisions of this Agreement shall govern. Notwithstanding the foregoing, the parties hereto acknowledge that the terms of this Agreement are not intended to and shall not, as between the Loan Parties and the Secured Parties, negate, waive or cancel any rights granted to, or create any liability or obligation of, any Loan Party in the First Lien Senior Priority Documents and the First Lien Junior

 

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Priority Documents or impose any additional obligations on the Loan Parties (other than as expressly set forth herein).

9.2 Continuing Nature of Provisions . This Agreement shall continue to be effective, and shall not be revocable by any party hereto, until the First Lien Senior Priority Obligation Payment Date shall have occurred. This is a continuing agreement and the First Lien Senior Priority Secured Parties and the First Lien Junior Priority Secured Parties may continue, at any time and without notice to the other parties hereto, to extend credit and other financial accommodations, lend monies and provide indebtedness to, or for the benefit of, Borrower or any other Loan Party on the faith hereof.

9.3 Amendments; Waivers . (a) No amendment or modification of any of the provisions of this Agreement shall be effective unless the same shall be in writing and signed by the First Lien Senior Priority Representative and the First Lien Junior Priority Representative and, in the case of amendments or modifications of Sections 3.5, 3.6, 5.2, 5.4, 9.3, 9.5 or 9.6, the Loan Parties and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the parties making such waiver or the obligations of the other parties to such party in any other respect or at any other time. Anything herein to the contrary notwithstanding, no consent of any Loan Party shall be required for amendments, modifications or waivers of any other provisions of this Agreement other than those that (i) directly affect any obligation or right of the Loan Parties hereunder or under the First Lien Senior Priority Documents or the First Lien Junior Priority Documents or that would impose any additional obligations on the Loan Parties or (ii) change the rights of the Loan Parties to refinance the First Lien Senior Priority Obligations or the First Lien Junior Priority Obligations.

(b) It is understood that the First Lien Senior Priority Representative, without the consent of any other First Lien Senior Priority Secured Party or First Lien Junior Priority Secured Party, may in its discretion determine that a supplemental agreement (which may take the form of an amendment and restatement of this Agreement) is necessary or appropriate to facilitate having additional indebtedness or other obligations (“ Additional Debt ”) of any of the Loan Parties become First Lien Senior Priority Obligations or First Lien Junior Priority Obligations, as the case may be, under this Agreement, which supplemental agreement shall specify whether such Additional Debt constitutes First Lien Senior Priority Obligations or First Lien Junior Priority Obligations, provided , that (i) such Additional Debt is permitted to be incurred by the First Lien Senior Priority Agreement and First Lien Junior Priority Agreement then extant, and is permitted by said Agreements to be subject to the provisions of this Agreement as First Lien Senior Priority Obligations or First Lien Junior Priority Obligations, as applicable, (ii) in the case of any Additional Debt that constitutes a First Lien Junior Priority Obligation, notice of the incurrence thereof is given to the First Lien Senior Priority Representative and (iii) all proceeds of the Common Collateral remaining after the First Lien Senior Priority Obligations Payment Date shall be payable to the First Lien Junior Priority Representative and the representative for any Additional Debt constituting First Lien Junior Priority Obligations (“ Additional First Lien Junior Debt ”) on a pro rata basis based on the aggregate outstanding principal amount of First Lien Junior Priority Obligations under the First Lien Junior Priority Indenture and First Lien Junior Priority Notes and under such Additional First Lien Junior Debt. Such a supplemental agreement shall not be required unless the First Lien Senior Priority Representative notifies the Borrower that it requires a supplemental agreement.

9.4 Information Concerning Financial Condition of the Borrower and the other Loan Parties. Each of the First Lien Junior Priority Secured Parties and the First Lien Senior Priority Secured Parties assumes responsibility for keeping itself informed of the financial condition of the Borrower and each of the other Loan Parties and all other circumstances bearing upon the risk of nonpayment of the First Lien

 

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Senior Priority Obligations or the First Lien Junior Priority Obligations. The First Lien Junior Priority Representative and the First Lien Senior Priority Representative hereby agree that no party shall have any duty to advise any other party of information known to it regarding such condition or any such circumstances. In the event the First Lien Junior Priority Representative or the First Lien Senior Priority Representative, in its sole discretion, undertakes at any time or from time to time to provide any information to any other party to this Agreement, it shall be under no obligation (a) to provide any such information to such other party or any other party on any subsequent occasion, (b) to undertake any investigation not a part of its regular business routine, or (c) to disclose any other information.

9.5 Governing Law . This Agreement shall be construed in accordance with and governed by the law of the State of New York.

9.6 Submission to Jurisdiction . (a) Each First Lien Senior Priority Secured Party, each First Lien Junior Priority Secured Party and each Loan Party hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each such party hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each such party agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the any First Lien Senior Priority Secured Party or First Lien Junior Priority Secured Party may otherwise have to bring any action or proceeding against any Loan Party or its properties in the courts of any jurisdiction.

(b) Each First Lien Senior Priority Secured Party, each First Lien Junior Priority Secured Party and each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so (i) any objection it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (a) of this Section and (ii) the defense of an inconvenient forum to the maintenance of such action or proceeding.

(c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.7. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

9.7 Notices. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, or sent by overnight express courier service or United States mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or five days after deposit in the United States mail (certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section) shall be as set forth below each party’s name on the signature pages hereof, or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties. The First Lien Junior Priority Representative agrees to accept and act upon instructions or directions pursuant to this Agreement sent by unsecured e-mail, facsimile transmission or other similar

 

21


unsecured electronic methods. The First Lien Junior Priority Representative shall not be liable for any losses, costs or expenses arising directly or indirectly from the First Lien Junior Priority Representative’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the First Lien Junior Priority Representative, including without limitation the risk of the First Lien Junior Priority Representative acting on unauthorized instructions, and the risk or interception and misuse by third parties.

9.8 Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and each of the First Lien Senior Priority Secured Parties and First Lien Junior Priority Secured Parties and their respective successors and permitted assigns, and nothing herein is intended, or shall be construed to give, any other Person any right, remedy or claim under, to or in respect of this Agreement or any Common Collateral.

9.9 Headings . Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

9.10 Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

9.11 Other Remedies . For avoidance of doubt, it is understood that nothing in this Agreement shall prevent any First Lien Junior Priority Secured Party from exercising any available remedy to accelerate the maturity of any indebtedness or other obligations owing under the First Lien Junior Priority Agreement or to demand payment under any guarantee in respect thereof, subject to the provisions of this Agreement.

9.12 Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by email or telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement shall become effective when it shall have been executed by each party hereto.

9.13 WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

9.14 Additional Loan Parties . Each Person that becomes a Loan Party after the date hereof shall become a party to this Agreement upon execution and delivery by such Person of a Supplement in

 

22


the form of Exhibit I to the First Lien Senior Priority Collateral Agreement. In addition, the Borrower will cause each such Loan Party to execute a joinder to this Agreement in form satisfactory to the First Lien Senior Priority Representative.

9.15 Protection of First Lien Junior Priority Representative . The parties hereto agree that the First Lien Junior Priority Representative shall be afforded all of the rights, immunities, indemnities and privileges afforded to the First Lien Junior Priority Representative under the First Lien Junior Priority Indenture including, but not limited to, those set forth in Article 7 of the First Lien Junior Priority Indenture. For the avoidance of doubt, the First Lien Junior Priority Representative agrees that its claims for indemnities, fees and expenses under and in respect of the First Lien Junior Priority Indenture and the other First Lien Junior Priority Documents are claims secured under the First Lien Junior Priority Documents and not under the First Lien Senior Priority Documents, and it shall have no claims for indemnities from the First Lien Senior Priority Secured Parties. It is understood and agreed that The Bank of New York Mellon Trust Company, N.A. is entering into this Agreement in its capacity as Collateral Agent under the First Lien Junior Priority Indenture and not in its individual capacity and in no event shall The Bank of New York Mellon Trust Company, N.A. incur any liability in connection with this Agreement or be personally liable for or on account of the statements, representations, warranties, covenants or obligations stated to be those of the First Lien Junior Priority Representative or any First Lien Junior Priority Secured Party hereunder, all such liability, if any, being expressly waived by the parties hereto and any person claiming by, through or under such party.

 

23


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

 

JPMORGAN CHASE BANK, N.A., as First Lien Senior Priority Representative for and on behalf of the First Lien Senior Priority Secured Parties
By:   /s/ Neil R. Boylan
Name:   Neil R. Boylan
Title:   Managing Director

 

Address for Notices:
Attention:
Telecopy No.:

[Signature Page to Intercreditor Agreement]


THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in its capacity as Collateral Agent, as First Lien Junior Priority Representative for and on behalf of the First Lien Junior Priority Secured Parties
By:   /s/ Justin Huff
Name:   Justin Huff
Title:   Senior Associate

 

Address for Notices:
525 William Penn Place, 38 th Floor
Pittsburgh, Pennsylvania 15259

Attention: Coprorate Trust Administration

Telecopy No.: (412) 234-7535

[Signature Page to Intercreditor Agreement]


REALOGY CORPORATION
  By:   /s/ Anthony E. Hull
    Name: Anthony E. Hull
    Title: Chief Financial Officer
  Address for Notices: Realogy Corporation
                                     One Campus Drive
                                     Parsippany, NJ 07054
  Attention: Anthony E. Hull
DOMUS INTERMEDIATE HOLDINGS CORP.
  By:   /s/ Anthony E. Hull
    Name: Anthony E. Hull
    Title: Chief Financial Officer
  Address for Notices: Realogy Corporation
                                     One Campus Drive
                                     Parsippany, NJ 07054
  Attention: Anthony E. Hull
DOMUS HOLDINGS CORP.
  By:   /s/ Anthony E. Hull
    Name: Anthony E. Hull
    Title: Chief Financial Officer
  Address for Notices: Realogy Corporation
                                     One Campus Drive
                                     Parsippany, NJ 07054
  Attention: Anthony E. Hull

[Signature Page to Intercreditor Agreement]


CARTUS CORPORATION

 

CDRE TM LLC

 

DOMUS INTERMEDIATE HOLDINGS CORP.

 

NRT INSURANCE AGENCY, INC.

 

REALOGY CORPORATION

 

REALOGY OPERATIONS LLC

 

REALOGY SERVICES GROUP LLC

 

REALOGY SERVICES VENTURE PARTNER LLC

 

SOTHEBY’S INTERNATIONAL REALTY LICENSEE LLC

 

WREM, INC.

  By:   /s/ Anthony E. Hull
    Name: Anthony E. Hull
    Title: Chief Financial Officer
  Address for Notices: Realogy Corporation
                                     One Campus Drive
                                     Parsippany, NJ 07054
  Attention: Anthony E. Hull

[Signature Page to Intercreditor Agreement]


CARTUS ASSET RECOVERY CORPORATION

 

CARTUS PARTNER CORPORATION

 

J. W. RIKER – NORTHERN R.I., INC.

 

FEDSTATE STRATEGIC CONSULTING, INCORPORATED

 

LAKECREST TITLE, LLC

 

NRT PHILADELPHIA LLC

 

REFERRAL NETWORK LLC

 

THE CORCORAN GROUP EASTSIDE, INC.

  By:   /s/ Anthony E. Hull
    Name: Anthony E. Hull
    Title: Executive Vice President & Treasurer
  Address for Notices: Realogy Corporation
                                     One Campus Drive
                                     Parsippany, NJ 07054
  Attention: Anthony E. Hull

[Signature Page to Intercreditor Agreement]


AMERICAN TITLE COMPANY OF HOUSTON

 

ATCOH HOLDING COMPANY

 

BURNET TITLE LLC

 

BURNET TITLE HOLDING LLC

 

BURROW ESCROW SERVICES, INC.

 

CORNERSTONE TITLE COMPANY

 

EQUITY TITLE COMPANY

 

EQUITY TITLE MESSENGER SERVICE HOLDING LLC

 

FIRST CALIFORNIA ESCROW CORPORATION

 

FRANCHISE SETTLEMENT SERVICES LLC

 

GUARDIAN HOLDING COMPANY

 

GUARDIAN TITLE AGENCY, LLC

 

GUARDIAN TITLE COMPANY

 

GULF SOUTH SETTLEMENT SERVICES, LLC

 

KEYSTONE CLOSING SERVICES LLC

 

MARKET STREET SETTLEMENT GROUP LLC

 

MID-ATLANTIC SETTLEMENT SERVICES LLC

 

NATIONAL COORDINATION ALLIANCE LLC

 

NRT SETTLEMENT SERVICES OF MISSOURI LLC

 

NRT SETTLEMENT SERVICES OF TEXAS LLC

 

PROCESSING SOLUTIONS LLC

 

SECURED LAND TRANSFERS LLC

 

ST. JOE TITLE SERVICES LLC

  By:   /s/ Thomas N. Rispoli
    Name: Thomas N. Rispoli
    Title: Chief Financial Officer

 

        Address for Notices: Realogy Corporation
                                           One Campus Drive
                                           Parsippany, NJ 07054
        Attention: Anthony E. Hull

[Signature Page to Intercreditor Agreement]


TAW HOLDING INC.

 

TEXAS AMERICAN TITLE COMPANY

 

TITLE RESOURCE GROUP AFFILIATES HOLDINGS LLC

 

TITLE RESOURCE GROUP HOLDINGS LLC

 

TITLE RESOURCE GROUP LLC

 

TITLE RESOURCE GROUP SERVICES LLC

 

TITLE RESOURCES INCORPORATED

 

TRG SERVICES, ESCROW, INC.

 

TRG SETTLEMENT SERVICES, LLP

 

WAYDAN TITLE, INC.

 

WEST COAST ESCROW COMPANY

        By:   /s/ Thomas Rispoli
  Name: Thomas N. Rispoli
  Title: Chief Financial Officer

 

        Address for Notices: Realogy Corporation
                                           One Campus Drive
                                           Parsippany, NJ 07054
        Attention: Anthony E. Hull

[Signature Page to Intercreditor Agreement]


BETTER HOMES AND GARDENS REAL ESTATE LLC

 

BETTER HOMES AND GARDENS REAL ESTATE LICENSEE LLC

 

CENTURY 21 REAL ESTATE LLC

 

CGRN, INC.

 

COLDWELL BANKER LLC

 

COLDWELL BANKER REAL ESTATE LLC

 

ERA FRANCHISE SYSTEMS LLC

 

GLOBAL CLIENT SOLUTIONS LLC

 

ONCOR INTERNATIONAL LLC

 

REALOGY FRANCHISE GROUP LLC

 

REALOGY GLOBAL SERVICES LLC

 

REALOGY LICENSING LLC

 

SOTHEBY’S INTERNATIONAL REALTY AFFILIATES LLC

 

WORLD REAL ESTATE MARKETING LLC

        By:   /s/ Andrew G. Napurano
  Name: Andrew G. Napurano
  Title: Chief Financial Officer

 

        Address for Notices: Realogy Corporation
                                           One Campus Drive
                                           Parsippany, NJ 07054
        Attention: Anthony E. Hull

[Signature Page to Intercreditor Agreement]


FSA MEMBERSHIP SERVICES, LLC
        By:   /s/ Marilyn J. Wasser
  Name: Marilyn J. Wasser
  Title: Executive Vice President

 

        Address for Notices: Realogy Corporation
                                           One Campus Drive
                                           Parsippany, NJ 07054
        Attention: Anthony E. Hull

[Signature Page to Intercreditor Agreement]


ALPHA REFERRAL NETWORK LLC

 

ASSOCIATED CLIENT REFERRAL LLC

 

BURGDORFF LLC

 

BURGDORFF REFERRAL ASSOCIATES LLC

 

BURNET REALTY LLC

 

CAREER DEVELOPMENT CENTER, LLC

 

COLDWELL BANKER COMMERCIAL PACIFIC PROPERTIES LLC

 

COLDWELL BANKER PACIFIC PROPERTIES LLC

 

COLDWELL BANKER REAL ESTATE SERVICES LLC

 

COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY

 

COLDWELL BANKER RESIDENTIAL BROKERAGE LLC

 

COLDWELL BANKER RESIDENTIAL REAL ESTATE LLC

 

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK

 

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK, INC.

 

COLORADO COMMERCIAL, LLC

 

HOME REFERRAL NETWORK LLC

 

JACK GAUGHEN LLC

 

NRT ARIZONA LLC

 

NRT ARIZONA COMMERCIAL LLC

 

NRT ARIZONA REFERRAL LLC

 

NRT COLORADO LLC

        By:   /s/ Kevin R. Greene
  Name: Kevin R. Greene
  Title: Chief Financial Officer

 

        Address for Notices: Realogy Corporation
                                           One Campus Drive
                                           Parsippany, NJ 07054
        Attention: Anthony E. Hull

[Signature Page to Intercreditor Agreement]


NRT COLUMBUS LLC

 

NRT COMMERCIAL LLC

 

NRT COMMERCIAL UTAH LLC

 

NRT DEVELOPMENT ADVISORS LLC

 

NRT DEVONSHIRE LLC

 

NRT HAWAII REFERRAL, LLC

 

NRT LLC

 

NRT MID-ATLANTIC LLC

 

NRT MISSOURI LLC

 

NRT MISSOURI REFERRAL NETWORK LLC

 

NRT NEW ENGLAND LLC

 

NRT NEW YORK LLC

 

NRT NORTHFORK LLC

 

NRT PITTSBURGH LLC

 

NRT REFERRAL NETWORK LLC

 

NRT RELOCATION LLC

 

NRT REOEXPERTS LLC

 

NRT SUNSHINE INC.

 

NRT TEXAS LLC

 

NRT UTAH LLC

 

REAL ESTATE REFERRAL LLC

 

REAL ESTATE REFERRALS LLC

 

REAL ESTATE SERVICES LLC

 

REFERRAL ASSOCIATES OF NEW ENGLAND LLC

 

REFERRAL NETWORK, LLC

        By:   /s/ Kevin R. Greene
  Name: Kevin R. Greene
  Title: Chief Financial Officer

 

        Address for Notices: Realogy Corporation
                                           One Campus Drive
                                           Parsippany, NJ 07054
        Attention: Anthony E. Hull

[Signature Page to Intercreditor Agreement]


REFERRAL NETWORK PLUS, INC.

 

SOTHEBY’S INTERNATIONAL REALTY, INC.

 

SOTHEBY’S INTERNATIONAL REALTY REFERRAL COMPANY, LLC

 

THE SUNSHINE GROUP (FLORIDA) LTD. CORP.

 

THE SUNSHINE GROUP, LTD.

 

VALLEY OF CALIFORNIA, INC.

        By:   /s/ Kevin R. Greene
  Name: Kevin R. Greene
  Title: Chief Financial Officer

 

        Address for Notices: Realogy Corporation
                                           One Campus Drive
                                           Parsippany, NJ 07054
        Attention: Anthony E. Hull

[Signature Page to Intercreditor Agreement]

Exhibit 10.13

JOINDER AGREEMENT NO. 1 , dated as of February 3, 2011 (this “ Joinder Agreement ”), to the INTERCREDITOR AGREEMENT, dated as of September 28, 2009 (as amended, modified and supplemented from time to time, the “ Intercreditor Agreement ”), among JPMorgan Chase, N.A., as First Priority Representative (the “Existing First Priority Representative”) for the First Priority Secured Parties (the “Existing First Priority Secured Parties”), Wilmington Trust Company, as Second Priority Representative (the “Second Priority Representative”) for the Second Priority Secured Parties, Realogy Corporation (the “Borrower”) and each of the other Loan Parties party thereto. Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms (or incorporated by reference) in the Intercreditor Agreement.

A. WHEREAS, the Borrower proposes to issue $700,000,000 of 7.875% Senior Secured Notes due February 15, 2019 (the “ First Priority Notes ”) pursuant to that certain Indenture, dated as of February 3, 2011, among the Borrower, Domus Intermediate Holdings Corp. (“ Intermediate ”), Domus Holdings Corp., The Bank of New York Mellon Trust Company, N.A., in its capacity as Collateral Agent and Trustee, and the other Loan Parties thereto (as amended, modified and supplemented from time to time, the “ First Priority Indenture ”); and

B. WHEREAS, the indebtedness incurred under, and the other obligations of the Loan Parties with respect to, the First Priority Notes and the First Priority Indenture constitute Additional Debt under the Intercreditor Agreement, and such Additional Debt is being designated hereby as additional “First Priority Obligations” (the “ Additional First Priority Obligations ”) in accordance with Section 9.3(b) of the Intercreditor Agreement; and

C. WHEREAS, the Person identified on the signature pages hereto as the “Additional First Priority Representative” (the “ Additional First Priority Representative ”) will serve as the collateral agent for the holders of the Additional First Priority Obligations (such holders, together with the Additional First Priority Representative, the “ Additional First Priority Secured Parties ”); and

D. WHEREAS, the Additional First Priority Representative wishes to become a party to the Intercreditor Agreement and to acquire and undertake, for itself and on behalf of the Additional First Priority Secured Parties, the rights and obligations of a “First Priority Representative” thereunder.

NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the existence and sufficiency of which are expressly recognized by all of the parties hereto, the Additional First Priority Representative hereby agrees to, and the other parties hereby acknowledge, the following:

SECTION 1. Effect on Intercreditor Agreement . The First Priority Notes and the First Priority Indenture shall each constitute an Additional First Priority Agreement under the Intercreditor Agreement, and each reference therein to “First Priority Representative” shall be construed to include the Additional First Priority Representative. For the avoidance of doubt and without limiting the foregoing, unless the context requires otherwise (i) each reference in the Intercreditor Agreement to “First Priority Creditors” shall be construed to include the holders of the Additional First Priority Obligations, (ii) the Additional First Priority Obligations are hereby designated as “First Priority Obligations” in accordance with Section 9.3(b) of the Intercreditor Agreement and (iii) each reference in the Intercreditor Agreement to “First Priority Collateral Agreement” shall be construed to include that certain Collateral Agreement, dated and effective as of February 3, 2011, among Intermediate, the Borrower, each other Loan Party identified therein and party thereto and The Bank of New York Mellon Trust Company, N.A., as collateral agent for


the secured parties thereunder (as amended, modified and supplemented from time to time, the “ Additional First Priority Collateral Agreement ”).

SECTION 2. Accession to the Intercreditor Agreement . The Additional First Priority Representative (a) hereby accedes and becomes a party to the Intercreditor Agreement as a First Priority Representative for the Additional First Priority Secured Parties from time to time in respect of the Additional First Priority Obligations, (b) agrees, for itself and on behalf of the Additional First Priority Secured Parties from time to time in respect of the Additional First Priority Obligations, to all of the terms and provisions of the Intercreditor Agreement and (c) shall have all of the rights and obligations of a First Priority Representative under the Intercreditor Agreement.

SECTION 3. Representations, Warranties and Acknowledgement of the Additional First Priority Representative . The Additional First Priority Representative represents and warrants to the Existing First Priority Representative, the Second Priority Representative and the other Secured Parties that (a) it has full power and authority to enter into this Joinder Agreement in its capacity as the Additional First Priority Representative and a First Priority Representative, (b) this Joinder Agreement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of this Joinder Agreement and (c) the First Priority Notes, the First Priority Indenture and the Additional First Priority Collateral Agreement relating to such Additional First Priority Obligations provide that, upon the Additional First Priority Representative’s entry into this Joinder Agreement, the secured parties in respect of such Additional First Priority Obligations will be subject to and bound by the provisions of the Intercreditor Agreement as additional Secured Parties.

SECTION 4. Counterparts . This Joinder Agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Joinder Agreement shall become effective when the Existing First Priority Representative and the Second Priority Representative shall have received a counterpart of this Joinder Agreement that bears the signature of the Additional First Priority Representative and such other parties to the Intercreditor Agreement as the Existing First Priority Representative may require. Delivery of an executed signature page to this Joinder Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually signed counterpart of this Joinder Agreement. It is understood and agreed that The Bank of New York Mellon Trust Company, N.A. is entering into this Joinder Agreement and acceding to and becoming a party to the Intercreditor Agreement in its capacity as Collateral Agent under the First Priority Indenture and not in its individual capacity and in no event shall The Bank of New York Mellon Trust Company, N.A. incur any liability in connection with this Joinder Agreement or the Intercreditor Agreement or be personally liable for or on account of the statements, representations, warranties, covenants or obligations stated to be those of the Additional First Priority Representative hereunder, all such liability, if any, being expressly waived by the parties hereto and any person claiming by, through or under such party.

SECTION 4. Benefit of Agreement . The agreements set forth herein or undertaken pursuant hereto are for the benefit of, and may be enforced by, any party to the Intercreditor Agreement.

SECTION 5. Governing Law; Submission to Jurisdiction . THE PARTIES HERETO HEREBY AGREE THAT SECTION 9.5 AND SECTION 9.6 OF THE INTERCREDITOR AGREEMENT SHALL GOVERN THIS JOINDER AGREEEMNT AS IF SET FORTH HEREIN MUTATIS MUTANDIS.

SECTION 6. Severability . In case any one or more of the provisions contained in this Joinder Agreement should be held invalid, illegal or unenforceable in any respect, none of the parties hereto


shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 7. Notices . All communications and notices hereunder shall be in writing and given as provided in Section 9.7 of the Intercreditor Agreement. All communications and notices hereunder to the Additional First Priority Representative shall be given to it at the address set forth under its signature hereto, which information supplements Section 9.7 of the Intercreditor Agreement.

SECTION 8. Determination of the Existing First Priority Representative; Direction to the Second Priority Representative . (a) In accordance with Section 9.3(b) of the Intercreditor Agreement, the Existing First Priority Representative has determined that this Joinder Agreement is necessary or appropriate to facilitate having the Additional First Priority Obligations become First Priority Obligations and that such Additional First Priority Obligations are permitted by the First Priority Agreement and the Second Priority Agreement to be incurred and to be subject to the provisions of the Intercreditor Agreement as First Priority Obligations. (b) Pursuant to Section 7(a) of the Incremental Assumption Agreement, the Existing First Priority Representative hereby authorizes and directs the Second Priority Representative to enter into this Joinder Agreement.

[Remainder of page intentionally left blank]


IN WITNESS WHEREOF, the Additional First Priority Representative has executed this Agreement as of the date first written above.

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in its capacity as Collateral Agent, as Additional First Priority Representative and a First Priority Representative for and on behalf of the Additional First Priority Secured Parties
By:   /s/ Justin Huff
Name:   Justin Huff
Title:   Senior Associate
 
Address for Notices:
525 William Penn Place, 38 th Floor
Pittsburgh, Pennsylvania 15259
Attention: Coprorate Trust Administration
Telecopy No.: (412) 234-7535

 

[Signature Page to Joinder]


Acknowledged by :

JPMORGAN CHASE BANK, N.A.,

as Existing First Priority Representative for

and on behalf of the Existing First Priority

Secured Parties

By:   /s/ Neil R. Boylan
Name:   Neil R. Boylan
Title:   Managing Director

 

[Signature Page to Joinder]


WILMINGTON TRUST COMPANY,

as Second Priority Representative for and

on behalf of the Second Priority Secured Parties

By:   /s/ Joseph B. Feil
Name:   Joseph B. Feil
Title:   Vice President

 

[Signature Page to Joinder]


REALOGY CORPORATION
        By:   /s/ Anthony E. Hull
  Name: Anthony E. Hull
  Title: Chief Financial Officer

 

          Address for Notices: Realogy Corporation
                                             One Campus Drive
                                             Parsippany, NJ 07054
          Attention: Anthony E. Hull
          Telecopy No.: (973) 407-6651

 

[Signature Page to Joinder]


DOMUS INTERMEDIATE HOLDINGS CORP.
        By:   /s/ Anthony E. Hull
  Name: Anthony E. Hull
  Title: Chief Financial Officer

 

          Address for Notices: Realogy Corporation
                                             One Campus Drive
                                             Parsippany, NJ 07054
          Attention: Anthony E. Hull
          Telecopy No.: (973) 407-6651

 

[Signature Page to Joinder]


CARTUS CORPORATION

 

CDRE TM LLC

 

DOMUS INTERMEDIATE HOLDINGS CORP.

 

NRT INSURANCE AGENCY, INC.

 

REALOGY CORPORATION

 

REALOGY OPERATIONS LLC

 

REALOGY SERVICES GROUP LLC

 

REALOGY SERVICES VENTURE PARTNER LLC

 

SOTHEBY’S INTERNATIONAL REALTY LICENSEE LLC

 

WREM, INC.

        By:   /s/ Anthony E. Hull
  Name: Anthony E. Hull
  Title: Chief Financial Officer

 

          Address for Notices: Realogy Corporation
                                             One Campus Drive
                                             Parsippany, NJ 07054
          Attention: Anthony E. Hull
          Telecopy No.: (973) 407-6651

 

[Signature Page to Joinder]


CARTUS ASSET RECOVERY CORPORATION

 

CARTUS PARTNER CORPORATION

 

J. W. RIKER – NORTHERN R.I., INC.

 

FEDSTATE STRATEGIC CONSULTING, INCORPORATED

 

LAKECREST TITLE, LLC

 

NRT PHILADELPHIA LLC

 

REFERRAL NETWORK LLC

 

THE CORCORAN GROUP EASTSIDE, INC.

        By:   /s/ Anthony E. Hull
  Name: Anthony E. Hull
  Title: Executive Vice President & Treasurer

 

          Address for Notices: Realogy Corporation
                                             One Campus Drive
                                             Parsippany, NJ 07054
          Attention: Anthony E. Hull
          Telecopy No.: (973) 407-6651

 

[Signature Page to Joinder]


AMERICAN TITLE COMPANY OF HOUSTON

 

ATCOH HOLDING COMPANY

 

BURNET TITLE LLC

 

BURNET TITLE HOLDING LLC

 

BURROW ESCROW SERVICES, INC.

 

CORNERSTONE TITLE COMPANY

 

EQUITY TITLE COMPANY

 

EQUITY TITLE MESSENGER SERVICE HOLDING LLC

 

FIRST CALIFORNIA ESCROW CORPORATION

 

FRANCHISE SETTLEMENT SERVICES LLC

 

GUARDIAN HOLDING COMPANY

 

GUARDIAN TITLE AGENCY, LLC

 

GUARDIAN TITLE COMPANY

 

GULF SOUTH SETTLEMENT SERVICES, LLC

 

KEYSTONE CLOSING SERVICES LLC

 

MARKET STREET SETTLEMENT GROUP LLC

 

MID-ATLANTIC SETTLEMENT SERVICES LLC

 

NATIONAL COORDINATION ALLIANCE LLC

 

NRT SETTLEMENT SERVICES OF MISSOURI LLC

 

NRT SETTLEMENT SERVICES OF TEXAS LLC

 

PROCESSING SOLUTIONS LLC

 

SECURED LAND TRANSFERS LLC

 

ST. JOE TITLE SERVICES LLC

 

TAW HOLDING INC.

 

TEXAS AMERICAN TITLE COMPANY

        By:   /s/ Thomas N. Rispoli
  Name: Thomas N. Rispoli
  Title: Chief Financial Officer

 

          Address for Notices: Realogy Corporation
                                             One Campus Drive
                                             Parsippany, NJ 07054
          Attention: Anthony E. Hull
          Telecopy No.: (973) 407-6651

 

[Signature Page to Joinder]


TITLE RESOURCE GROUP AFFILIATES HOLDINGS LLC

 

TITLE RESOURCE GROUP HOLDINGS LLC

 

TITLE RESOURCE GROUP LLC

 

TITLE RESOURCE GROUP SERVICES LLC

 

TITLE RESOURCES INCORPORATED

 

TRG SERVICES, ESCROW, INC.

 

TRG SETTLEMENT SERVICES, LLP

 

WAYDAN TITLE, INC.

 

WEST COAST ESCROW COMPANY

        By:   /s/ Thomas N. Rispoli
  Name: Thomas N. Rispoli
  Title: Chief Financial Officer

 

          Address for Notices: Realogy Corporation
                                             One Campus Drive
                                             Parsippany, NJ 07054
          Attention: Anthony E. Hull
          Telecopy No.: (973) 407-6651

 

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BETTER HOMES AND GARDENS REAL ESTATE LLC

 

BETTER HOMES AND GARDENS REAL ESTATE LICENSEE LLC

 

CENTURY 21 REAL ESTATE LLC

 

CGRN, INC.

 

COLDWELL BANKER LLC

 

COLDWELL BANKER REAL ESTATE LLC

 

ERA FRANCHISE SYSTEMS LLC

 

GLOBAL CLIENT SOLUTIONS LLC

 

ONCOR INTERNATIONAL LLC

 

REALOGY FRANCHISE GROUP LLC

 

REALOGY GLOBAL SERVICES LLC

 

REALOGY LICENSING LLC

 

SOTHEBY’S INTERNATIONAL REALTY AFFILIATES LLC

 

WORLD REAL ESTATE MARKETING LLC

        By:   /s/ Andrew G. Napurano
  Name: Andrew G. Napurano
  Title: Chief Financial Officer

 

          Address for Notices: Realogy Corporation
                                             One Campus Drive
                                             Parsippany, NJ 07054
          Attention: Anthony E. Hull
          Telecopy No.: (973) 407-6651

 

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FSA MEMBERSHIP SERVICES, LLC
        By:   /s/ Marilyn J. Wasser
  Name: Marilyn J. Wasser
  Title: Executive Vice President

 

          Address for Notices: Realogy Corporation
                                             One Campus Drive
                                             Parsippany, NJ 07054
          Attention: Anthony E. Hull
          Telecopy No.: (973) 407-6651

 

[Signature Page to Joinder]


ALPHA REFERRAL NETWORK LLC

 

ASSOCIATED CLIENT REFERRAL LLC

 

BURGDORFF LLC

 

BURGDORFF REFERRAL ASSOCIATES LLC

 

BURNET REALTY LLC

 

CAREER DEVELOPMENT CENTER, LLC

 

COLDWELL BANKER COMMERCIAL PACIFIC PROPERTIES LLC

 

COLDWELL BANKER PACIFIC PROPERTIES LLC

 

COLDWELL BANKER REAL ESTATE SERVICES LLC

 

COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY

 

COLDWELL BANKER RESIDENTIAL BROKERAGE LLC

 

COLDWELL BANKER RESIDENTIAL REAL ESTATE LLC

 

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK

 

COLDWELL BANKER RESIDENTIAL REFERRAL NETWORK, INC.

 

COLORADO COMMERCIAL, LLC

 

HOME REFERRAL NETWORK LLC

 

JACK GAUGHEN LLC

 

NRT ARIZONA LLC

 

NRT ARIZONA COMMERCIAL LLC

 

NRT ARIZONA REFERRAL LLC

 

NRT COLORADO LLC

        By:   /s/ Kevin R. Greene
  Name: Kevin R. Greene
  Title: Chief Financial Officer

 

          Address for Notices: Realogy Corporation
                                             One Campus Drive
                                             Parsippany, NJ 07054
          Attention: Anthony E. Hull
          Telecopy No.: (973) 407-6651

 

[Signature Page to Joinder]


NRT COLUMBUS LLC

 

NRT COMMERCIAL LLC

 

NRT COMMERCIAL UTAH LLC

 

NRT DEVELOPMENT ADVISORS LLC

 

NRT DEVONSHIRE LLC

 

NRT HAWAII REFERRAL, LLC

 

NRT LLC

 

NRT MID-ATLANTIC LLC

 

NRT MISSOURI LLC

 

NRT MISSOURI REFERRAL NETWORK LLC

 

NRT NEW ENGLAND LLC

 

NRT NEW YORK LLC

 

NRT NORTHFORK LLC

 

NRT PITTSBURGH LLC

 

NRT REFERRAL NETWORK LLC

 

NRT RELOCATION LLC

 

NRT REOEXPERTS LLC

 

NRT SUNSHINE INC.

 

NRT TEXAS LLC

 

NRT UTAH LLC

 

REAL ESTATE REFERRAL LLC

 

REAL ESTATE REFERRALS LLC

 

REAL ESTATE SERVICES LLC

 

REFERRAL ASSOCIATES OF NEW ENGLAND LLC

 

REFERRAL NETWORK, LLC

        By:   /s/ Kevin R. Greene
  Name: Kevin R. Greene
  Title: Chief Financial Officer

 

          Address for Notices: Realogy Corporation
                                             One Campus Drive
                                             Parsippany, NJ 07054
          Attention: Anthony E. Hull
          Telecopy No.: (973) 407-6651

 

[Signature Page to Joinder]


REFERRAL NETWORK PLUS, INC.

 

SOTHEBY’S INTERNATIONAL REALTY, INC.

 

SOTHEBY’S INTERNATIONAL REALTY REFERRAL COMPANY, LLC

 

THE SUNSHINE GROUP (FLORIDA) LTD. CORP.

 

THE SUNSHINE GROUP, LTD.

 

VALLEY OF CALIFORNIA, INC.

        By:   /s/ Kevin R. Greene
  Name: Kevin R. Greene
  Title: Chief Financial Officer

 

          Address for Notices: Realogy Corporation
                                             One Campus Drive
                                             Parsippany, NJ 07054
          Attention: Anthony E. Hull
          Telecopy No.: (973) 407-6651

 

[Signature Page to Joinder]

Exhibit 10.19

 

  

EMPLOYMENT AGREEMENT (this

Agreement ”) dated as of April 10, 2007, between

REALOGY CORPORATION , a Delaware

corporation, (the “ Company ”) and RICHARD A.

SMITH (“ Executive ”).

WHEREAS, pursuant to the Agreement and Plan of Merger, made and entered into as of the 15th day of December, 2006, by and among Domus Holdings Corp. (the “ Parent ”), the Company and Domus Acquisition Corp. (the “ Merger Agreement ”), Domus Acquisition Corp. will be merged with and into the Company (the “ Transaction ”), and the Company will be the surviving corporation in the Transaction;

WHEREAS, in connection with the Transaction, the Company desires to employ Executive and Executive desires to be employed by the Company;

WHEREAS, the Company and Executive are parties to that certain employment agreement dated as of the effective date of the spin-off of the Company from Cendant Corporation, a Delaware corporation, as such employment agreement has been amended or supplemented through the Effective Date (as defined in Section 1) (the “ Prior Agreement ”); and

WHEREAS, Executive, as a condition of his employment, will make a substantial investment in the Parent concurrently with the closing of the Transaction by purchasing 830,000 shares of common stock of the Parent, par value $0.01 (“ Common Stock ”), at a price of $10.00 per share;

NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Employment Period .

The initial term of Executive’s employment hereunder shall be for a period of five (5) years (the “ Initial Term ”) commencing on the closing of the Transaction (the “ Effective Date ”) and ending on the fifth anniversary of the Effective Date, unless terminated earlier pursuant to Section 3 (the “ Employment Period ”); provided , however , that the Employment Period shall automatically be renewed for an additional period of one (1) year upon the expiration of the Initial Term unless either party gives at least ninety (90) days’ written notice of its intention not to renew the Employment Period. Upon Executive’s termination of employment with the Company for any reason, he shall immediately resign all positions with the Company or any of its subsidiaries or affiliates, including any position as a member of the Parent’s Board of Directors and a member of the Company’s Board of Directors (the “ Board ”).

Section 2. Terms of Employment .

(a) Position . During the term of Executive’s employment under this Agreement, Executive shall serve as Vice Chairman and President of the Company and, effective as of January 1, 2008 (or such earlier date as the Company’s current Chief Executive Officer


ceases serving in such position), Chief Executive Officer of the Company and shall have such duties and responsibilities as shall be assigned to Executive by the Board. In performing his duties hereunder, Executive shall report directly to the Board. Executive shall also serve as a member of the Board during the Employment Period. At the request of the Company, Executive shall also serve as an officer of any of its subsidiaries or affiliates without additional compensation.

(b) Duties . During the Employment Period, Executive agrees to devote all of his business time to the business and affairs of the Company and to use Executive’s reasonable best efforts to perform faithfully, effectively and efficiently his responsibilities and obligations hereunder. Notwithstanding the foregoing, nothing herein shall prohibit Executive from (i) serving on civic or charitable boards or committees and (ii) managing personal investments, so long as such activities do not materially interfere with the performance of Executive’s responsibilities hereunder.

(c) Compensation .

(i) Base Salary . During the Employment Period, Executive shall receive an initial annual base salary in an amount equal to $1,000,000.00, which shall be paid in accordance with the customary payroll practices of the Company (the “ Annual Base Salary ”). Executive’s Annual Base Salary shall be reviewed at least annually by the Board but may not be reduced, and in the event of any increase thereof, all references to “Annual Base Salary” as used in this Agreement shall refer to such increased amount.

(ii) Bonuses . The Company shall establish a performance-based bonus plan (the “ Plan ”) to be applicable for each fiscal year of the Company (a “ Fiscal Year ”) ending during the Employment Period pursuant to which Executive will be eligible to receive an annual bonus (the “ Bonus ”) with respect to each Fiscal Year of the Company ending during the Employment Period (each, a “ Bonus Year ”). The Board or the Compensation Committee of the Board (the “ Compensation Committee ”) will administer the Plan and, in consultation with Executive, shall establish performance objectives for each Fiscal Year, which performance objectives shall be reasonably related to the Company’s business objectives. In the event that, with respect to the applicable Fiscal Year of the Company ending during the Employment Period, the Company achieves the pre-established target performance goals based on actual performance, Executive shall be entitled to receive a Bonus in an amount equal to 200% of Executive’s Annual Base Salary (“ Target Bonus ”) (and in the event the Board or the Compensation Committee increases Executive’s Target Bonus after the Effective Date, all references to “Target Bonus” as used in this Agreement shall refer to such increased amount). Subject to Section 4, Executive will be entitled to receive the Bonus only upon the Company’s achievement of the specified performance objectives and if Executive is employed on the last day of the applicable Bonus Year. The Bonus shall become payable on March 15 of the year following the end of the applicable Bonus Year, provided that the Board or Compensation Committee finally determines (x) that the Company has achieved the applicable performance objectives and (y) the amount of the bonus that shall be paid to each executive entitled to receive a bonus for the applicable Bonus Year. If the Board or Compensation Committee has not made such final determination by March 15 of such year, the Bonus (if any) shall instead be paid as soon as practicable thereafter during such year.

 

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(iii) Benefits .

(1) During the Employment Period, Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other senior executives of the Company and shall be eligible for participation in, and shall receive all benefits under, welfare benefit plans, practices, policies and programs provided by the Company to the extent applicable generally to other senior executives of the Company (“ Benefit Plans ”). The benefits provided to Executive shall be, in the aggregate, comparable to those benefits that Executive was receiving at the Company immediately prior to the Effective Date, but excluding those benefits under any nonqualified deferred compensation plans that are being amended or terminated in connection with the Transaction or that relate to or provide benefits or compensation measured with respect to the Company’s common stock. In addition to the foregoing, the Company shall continue to maintain the life insurance policy arrangement (pursuant to which the Company issues Executive a bonus payment, the net- after-tax proceeds of which are sufficient to pay the amount of the premiums due on such policy) on the same terms and conditions under which the Company maintains this arrangement prior to the Effective Date.

(2) The Company (and any successor to the business of the Company) acknowledges and agrees to provide Executive the following benefits notwithstanding anything in this Agreement to the contrary, and further acknowledges and agrees that this provision shall survive any termination of Executive’s employment or any termination of this Agreement. In addition to any payments or benefits under the applicable provisions of Section 4 of this Agreement, upon Executive’s termination of employment from the Company and its subsidiaries for any reason, including, without limitation, due to or following any non-renewal of this Agreement, resignation, or termination by the Company with or without Cause, Executive and each person who is his covered dependent at such time under each applicable Welfare Benefit Plan (defined below), shall remain eligible to continue to participate in all of such plans (as they may be modified from time to time with respect to all senior executive officers), or such other welfare benefit plans subsequently made available to senior executive officers of the Company or any successor Company (the “ Post-Employment Plans ”) until the end of the plan year in which Executive reaches, or would have reached, age seventy-five (75) (such benefits, the “ Post-Employment Benefits ”). Executive is currently eligible to participate in the following plans: Executive Physical Exams, Medical Expense Reimbursement Plan (MERP), Medical Insurance, Dental Insurance, Group Life Insurance (up to $1 million coverage on Executive’s life), Vision Service Plan (collectively, the “ Welfare Benefit Plans ”). Coverage under such Post-Employment Plans shall be subject to Executive and/or such dependents, as applicable, continuing to pay the applicable employee portion of any premiums, co-payments, deductibles and similar costs (as if Executive was still an employee of the Company). Solely with respect to Executive’s dependents, such coverage shall terminate upon such earlier date if and when they become ineligible for any such benefits under the terms of such Welfare Benefit Plans or Post-Employment Plans, as applicable, and provided , that once Executive or his dependents become eligible for Medicare or any other government-sponsored medical insurance plan, or if Executive is eligible to participate in any other company’s medical insurance plan as an employee after the termination of his employment, Executive or his dependents shall utilize such government plan or other company plan, and the Company’s insurance obligations as part of the Post-Employment Benefits hereunder shall become secondary to such government plan or other company plan. Notwithstanding the foregoing, the Company may meet any of its foregoing obligations under the Post-Employment Plans by paying for, or providing for the payment of, such benefits directly

 

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or through alternative plans or individual policies which are no less favorable in all material respects (with respect to both coverage and cost to Executive) to the Post-Employment Plans, provided that the Company shall use its best efforts to assure that provision of the Post-Employments Benefits complies with Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”).

(iv) Expenses . During the term of Executive’s employment, Executive shall be entitled to receive reimbursement for all reasonable business expenses incurred by Executive in performance of his duties hereunder, provided that Executive provides all necessary documentation in accordance with Company policy.

(v) Stock Options . Concurrent with the closing of the Transaction, the Company shall cause the Parent to grant Executive a stock option (the “ Option Grant ”) to purchase 3,112,500 shares of Common Stock, at an exercise price of $10.00 per share. The Option Grant will be pursuant and subject to the terms and conditions set forth in the Parent’s 2007 Stock Incentive Plan (the “ Stock Incentive Plan ”) and Executive’s option agreement associated with the Option Grant (the “ Option Agreement ”, which is attached hereto as Appendix A), and Executive’s purchase of the Purchased Shares as provided in Section 2(c)(vii) below.

(vi) Restricted Stock . Concurrent with the closing of the Transaction, the Company shall cause the Parent to grant Executive a grant (the “ Restricted Stock Grant ”) of restricted shares of Common Stock (“ Restricted Shares ”). The Restricted Stock Grant will be pursuant and subject to the terms and conditions set forth in the Stock Incentive Plan and the restricted stock agreement evidencing such grant (the “ Restricted Stock Agreement ”, which is attached hereto as Appendix B). The Restricted Stock Grant will be comprised of 100,000 Restricted Shares and shall be subject to the vesting, termination and other terms set forth in the Restricted Stock Agreement.

(vii) Investment . Concurrent with the closing of the Transaction, Executive shall purchase 830,000 shares of Common Stock, at a price of $10.00 per share (the “ Purchased Shares ”). The Purchased Shares shall be subject to the terms of the Stock Incentive Plan and Executive’s Subscription Agreement (attached hereto as Appendix C) and Executive’s Contribution Agreements (attached hereto as Appendix D). All of the Purchased Shares will be fully vested at the Effective Date.

(viii) Investment Bonus . The Company acknowledges that, in connection with the consummation of the Transaction, Executive is entitled to receive a one-time bonus in an amount equal to (i) $5 million, less (ii) applicable withholding taxes (such amount, less such taxes, the “ Investment Bonus ”). Executive hereby elects to receive the Investment Bonus in the form of fully vested shares of Common Stock (using a per share price equal to $10.00 for purposes of determining the number of such shares), which the Company will deliver to Executive no later than five days after the Effective Date. Executive acknowledges and agrees that the Common Stock that Executive receives pursuant to the Investment Bonus is in addition to any other purchase of Common Stock that Executive has agreed to make, including without limitation, any such purchase pursuant to the Subscription Agreement; provided however that the amount invested pursuant to the Investment Bonus shall offset the amounts that Executive is

 

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otherwise required to invest. The Investment Bonus shall not be taken into account in computing any benefits or entitlements under any benefit or incentive plan of the Company or its affiliates or agreement between the Company or any of its affiliates and Executive, including, without limitation, this Agreement, and shall not be subject to deferral.

(ix) Management Investor Rights Agreement . All Purchased Shares, shares purchased pursuant to the Investment Bonus, Restricted Shares, the Option Grant and Common Stock held by Executive pursuant to the vesting of Restricted Shares and the exercise of the Option Grant will be subject to the terms and conditions of the Management Investor Rights Agreement by and among the Parent, Executive, and other signatories thereto (the “ Management Investor Rights Agreement ”), including the restrictive covenants contained in Annex I to Section 8 thereof. The Option Agreement, Stock Incentive Plan, Restricted Stock Agreement, Management Investor Rights Agreement, Subscription Agreement and any other stock or stock-based award agreement entered into by and between the Company and Executive after the date hereof, collectively, (the “ Equity Documents ”).

Section 3. Termination of Employment .

(a) Death or Disability . Executive’s employment hereunder shall terminate automatically upon Executive’s death. If Executive becomes subject to a Disability during the Employment Period (pursuant to the definition of Disability set forth below), the Company may give Executive written notice in accordance with Sections 3(e) and 10(h) of its intention to terminate Executive’s employment. For purposes of this Agreement, “ Disability ” means (i) Executive’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) Executive is, by reason of any medically determinable physical of mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Company. Whether Executive has incurred a “Disability” shall be determined by a physician selected by the Company or its insurers.

(b) Cause . Executive’s employment may be terminated at any time by the Company for Cause. For purposes of this Agreement, “ Cause ” shall mean (i) Executive’s willful failure to substantially perform his duties as an employee of the Company or any subsidiary (other than any such failure resulting from incapacity due to physical or mental illness), (ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Company or any subsidiary, (iii) Executive’s conviction of, or plea of guilty or nolo contendere to a charge of commission of, a felony or crime involving moral turpitude, (iv) Executive’s indictment for a charge of commission of a felony or any crime involving moral turpitude, provided that the Board determines in good faith that such indictment would result in a material adverse impact to the business or reputation of the Company, (v) Executive’s gross negligence in the performance of his duties, or (vi) Executive purposefully or negligently makes (or has been found to have made) a false certification to the Company pertaining to its financial statements; a termination will not be for “Cause” pursuant to clause (i), (ii) or (v), to the extent such conduct is curable, unless the Company shall have notified Executive in writing describing such conduct and Executive shall have failed to cure such conduct within ten (10) business days after his receipt of such written notice.

 

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(c) Termination Without Cause . The Company may terminate Executive’s employment hereunder without Cause at any time.

(d) Good Reason . Executive’s employment may be terminated at any time by Executive for Good Reason or without Good Reason upon 90 days’ prior written notice, provided, in the case of a termination for Good Reason, that Executive provides such notice within 60 days after the occurrence of the event giving rise to the termination for Good Reason. For purposes of this Agreement, “ Good Reason ” means voluntary resignation after any of the following actions taken by the Company or any of its subsidiaries without Executive’s consent: (i) removal from, or failure to be elected or re-elected to, the Board; (ii) a material reduction of Executive’s duties and responsibilities to the Company, (iii) a reduction in Executive’s Annual Base Salary or Target Bonus (not including any diminution related to a broader compensation reduction that (A) is made in consultation with Executive and (B) is applied to all senior executives of the Company in a relatively proportionate manner); (iv) the relocation of Executive’s primary office to a location more than 30 miles from the prior location; (v) delivery of notice of non-renewal of the Employment Period by the Company (other than non-renewal by the Company due to Executive’s Disability, termination for Cause or termination by Executive); or (vi) a material breach by the Company of a material provision of this Agreement (which for the avoidance of doubt includes Section 2(a) of this Agreement); a termination shall not be for “Good Reason” pursuant to clause (i), (ii), (iii) or (iv), unless Executive shall have given written notice of his intention to resign for Good Reason and the Company shall have failed to cure the event giving rise to Good Reason within ten (10 ) business days after the Company’s receipt of such written notice.

(e) Notice of Termination . Any termination by the Company for Cause or without Cause, or by Executive for Good Reason or without Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 10(h). For purposes of this Agreement, a “ Notice of Termination ” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date. The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company hereunder or preclude Executive or the Company from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder.

(f) Date of Termination . “ Date of Termination ” means (i) if Executive’s employment is terminated by the Company for Cause, without Cause or by reason of Disability, or by Executive for Good Reason or without Good Reason, the date of receipt of the Notice of Termination (in the case of a termination with or without Good Reason, provided such notice is in accordance with Section 3(d)) or any later date specified therein pursuant to Section 3(e), as the case may be and (ii) if Executive’s employment is terminated by reason of death, the date of death.

 

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Section 4. Obligations of the Company upon Termination .

(a) With Good Reason; Without Cause . If during the Employment Period, the Company shall terminate Executive’s employment without Cause or Executive shall terminate his employment for Good Reason, then the Company will provide Executive with the following severance payments and/or benefits:

(i) Prior to the thirtieth day following the Date of Termination, the Company shall pay to Executive in a lump sum, to the extent not previously paid, (i) the Annual Base Salary through the Date of Termination, and (ii) the Bonus earned for any Bonus Year ended prior to the year in which the Date of Termination occurs, provided that Executive was employed on the last day of such Bonus Year (the “ Accrued Obligations ”); and

(ii) The Company will pay Executive an aggregate sum of 300% of Executive’s Annual Base Salary and Target Bonus (such amount, the “ Cash Severance ”) as follows: (i) one-half of the Cash Severance shall be payable to Executive in a lump sum, within 30 business days of the Date of Termination and (ii) the remaining one-half of the Cash Severance will be payable to Executive in thirty-six (36) equal monthly installments commencing as of the first day of the calendar month following the month in which the Date of Termination occurs.

Notwithstanding the foregoing provisions of this Section 4(a), to the extent required in order to comply with Section 409A of the Code, amounts to be paid under this Section 4(a) shall be paid to Executive on the first business day after the date that is six months following Executive’s “separation from service” within the meaning of Section 409A of the Code.

(b) Death or Disability . If Executive’s employment shall be terminated by reason of Executive’s death or Disability, then the Company will provide Executive (or his estate or legal representative) with the following severance payments and/or benefits: (A) the Accrued Obligations; (B) a lump sum equal to 100% of Executive’s Annual Base Salary; and (C) the Welfare Benefits. Notwithstanding the foregoing provisions of this Section 4(b), to the extent required in order to comply with Section 409A of Code, amounts to be paid under this Section 4(b) shall be paid to Executive on the first business day after the date that is six months following Executive’s “separation from service” within the meaning of Section 409A of the Code. Thereafter, the Company shall have no further obligation to Executive or his legal representatives, other than any rights to vested benefits under any Benefit Plans, indemnification rights he may have under this Agreement and any rights he may have under the Equity Documents.

(c) Cause; Other than for Good Reason . If Executive’s employment shall be terminated by the Company for Cause or by Executive without Good Reason, then the Company shall have no further payment obligations to Executive other than the Accrued Obligations.

 

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Thereafter, the Company shall have no further obligation to Executive or his legal representatives, other than any rights to vested benefits under any Benefit Plans, indemnification rights he may have under this Agreement, and any rights he may have under the Equity Documents.

(d) General Release . The Company’s obligations to make payments under Sections 4(a) and in the case of Disability under Section 4(b) are conditioned on Executive’s or his legal representative’s (as applicable) executing a general release of claims against the Company and its subsidiaries and affiliates and their successors and assigns (and the officers and directors of such entities) substantially in the form attached hereto as Exhibit A (the “ Release ”). For the avoidance of doubt, the Company’s obligations under Section 2(c)(iii)(2), 7 and 9 of this Agreement, the Benefit Plans, and the Equity Documents shall not be subject to Executive’s execution of the Release nor to Executive’s obligations under Section 5 of this Agreement, unless otherwise specifically provided in such other arrangements.

Section 5. Restrictive Covenants . Executive shall be subject to the restrictive covenants set forth in Annex I to Section 8 of the Management Investor Rights Agreement in accordance with its terms, provided that the restrictive periods set forth in Sections 1 and 2 of such Annex I shall in each case be three years.

Section 6. Severance Payments. In addition to the foregoing, and not in any way in limitation of any right or remedy otherwise available to the Company, if the Board reasonably and in good faith believes Executive has violated or is in violation of any provision of Annex I of the Management Investor Rights Agreement (as modified by Section 5 hereof), the Board may unilaterally suspend Executive’s right to receive any Cash Severance then or thereafter due from the Company to Executive, provided that the Board (a) gives Executive advance written notice of such suspension and (b) initiates an action or claim to enforce the Company’s rights in respect of such restrictive covenants promptly after such suspension. In the event that the Company prevails on such action or claim, Executive’s right to receive, and the Company’s obligation to pay, any additional Cash Severance, including any previously suspended amounts, shall be terminated immediately, and Executive shall have no further rights to Cash Severance. In the event that Executive prevails on such action or claim, the Company shall be required to pay to Executive in a lump sum within thirty (30) days of such adjudication (or, to the extent required in order to comply with Section 409A of the Code on the first business day after the date that is six months following Executive’s “separation from service” within the meaning of Section 409A of the Code) any Cash Severance the payment of which was delayed due to such suspension, plus interest for any period during which the payment of the Cash Severance was suspended at the prime rate, as published in the Wall Street Journal on the date of such suspension, and to commence payment of future installments of Cash Severance in accordance with Section 4(a)(ii).

Section 7. Excess Parachute Payments . The provisions of Section X of the Prior Agreement are hereby incorporated by reference and made a part of this Agreement; provided , however , that the references to Section VII contained therein shall be references to Section 4(a) of this Agreement; provided , further that, in the event that the payments and benefits payable or provided by the Company are eligible for exemption from the definition of “parachute payment” under Q&A 5 and/or Q&A 6 of Section 1.280G-1 of the Department of Treasury Regulations under the Code (the “ 280G Regulations ”), Executive shall cooperate in good faith with the

 

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Company to satisfy such exemptions, which shall include taking such actions as are necessary so that the Company may satisfy the shareholder approval requirements under Q&A 7 of the 280G Regulations, provided that this shall not require Executive to waive his rights to any payments or benefits that he is entitled to receive pursuant to the Equity Documents.

Section 8. Executive’s Representations, Warranties and Covenants .

(a) Executive hereby represents and warrants to the Company and its subsidiaries that:

(1) Executive has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by Executive;

(2) the execution, delivery and performance of this Agreement by Executive does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Executive is a party or any judgment, order or decree to which Executive is subject;

(3) Executive is not a party to or bound by any employment agreement, consulting agreement, non-compete agreement, fee for services agreement, confidentiality agreement or similar agreement with any other Person other than the Company;

(4) upon the execution and delivery of this Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of Executive, enforceable in accordance with its terms;

(5) Executive understands that Parent and the Company will rely upon the accuracy and truth of the representations and warranties of Executive set forth herein and Executive consents to such reliance; and

(6) as of the date of execution of this Agreement, Executive is not in breach of any of its terms, including having committed any acts that would form the basis for a Cause termination if such act had occurred after the Effective Date.

(b) The Company and its subsidiaries hereby represent and warrant to Executive that:

(1) the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by the Company;

(2) the execution, delivery and performance of this Agreement by the Company does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which the Company is a party or any judgment, order or decree to which the Company is subject;

 

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(3) upon the execution and delivery of this Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of the Company, enforceable in accordance with its terms; and

(4) the Company understands that Executive will rely upon the accuracy and truth of the representations and warranties of the Company set forth herein and the Company consents to such reliance.

Section 9. Indemnification .

The Company shall indemnify Executive to the maximum extent permitted under the General Corporate Law of Delaware for acts taken within the scope of his employment. To the extent that the Company obtains coverage under a director and officer indemnification policy, Executive will be entitled to such coverage on a basis that is no less favorable than the coverage provided to any other officer or director of the Company.

Section 10. General Provisions .

(a) Severability . It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable under any present or future law, and if the rights and obligations of any party under this Agreement will not be materially and adversely affected thereby, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction; furthermore, in lieu of such invalid or unenforceable provision there will be added automatically as a part of this Agreement, a legal, valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

(b) Entire Agreement . This Agreement and the Equity Documents embody the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way (including, without limitation, any other employment, severance or change-in-control agreement or understanding). For the avoidance of doubt, Executive, the Company and the Subsidiaries acknowledge that any agreement between Executive and the Company or Cendant Corporation or any subsidiary or affiliate of any of the foregoing, entered into prior to the Effective Date, including without limitation, the Prior Agreement, shall be void ab initio as of immediately before the Effective Date.

 

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(c) Counterparts . This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

(d) Successors and Assigns .

(i) This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(ii) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law, or otherwise.

(e) Governing Law . THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

(f) Enforcement .

(i) Arbitration . Except for the Company or its Affiliate’s right to obtain injunctive relief for violation of Section 5 of this Agreement or in Annex I to Section 8 of the Management Investor Rights Agreement, any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation, breach or enforcement which the parties are unable to resolve by mutual agreement, shall be settled by submission by either party of the controversy, claim or dispute to binding arbitration in New York (unless the parties agree in writing to a different location), before a single arbitrator in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association then in effect. In any such arbitration proceeding the parties agree to provide all discovery deemed necessary by the arbitrator. The decision and award made by the arbitrator shall be final, binding and conclusive on all parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof. Each party shall bear its or his costs and expenses in any such arbitration and one-half of the arbitrator’s fees and costs; provided , however , if Executive prevails on substantially all material claims, the Company shall reimburse Executive for all of his reasonable attorney’s fees and costs.

 

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(ii) Remedies . All remedies hereunder are cumulative, are in addition to any other remedies provided for by law and may, to the extent permitted by law, be exercised concurrently or separately, and the exercise of any one remedy shall not be deemed to be an election of such remedy or to preclude the exercise of any other remedy.

(iii) Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

(g) Amendment and Waiver . The provisions of this Agreement may be amended and waived only with the prior written consent of the Company and Executive and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall be construed as a waiver of such provisions or affect the validity, binding effect or enforceability of this Agreement or any provision hereof.

(h) Notices . Any notice provided for in this Agreement must be in writing and must be either personally delivered, transmitted via telecopier, mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated or at such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given hereunder and received when delivered personally, when received if transmitted via telecopier, five days after deposit in the U.S. mail and one day after deposit for overnight delivery with a reputable overnight courier service.

If to the Company, to:

Realogy Corporation

c/o Apollo Management VI, L.P.

9 West 57th Street

New York, New York 10019

Facsimile: (212) 515-3288

Attention: Marc Becker

with a copy (which shall not constitute notice) to:

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 Executive, to:

Executive’s home address most recently on file with the Company.

 

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with a copy (which shall not constitute notice) to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Attention: Andrea K. Wahlquist, Esq.

(i) Withholding . The Company may withhold from any amounts payable or benefits to be provided to Executive under this Agreement or otherwise all Federal, state, city or other taxes and other amounts that the Company may reasonably determine are required to be withheld pursuant to any applicable law or regulation.

(j) Survival of Representations, Warranties and Agreements . All representations, warranties and agreements contained herein shall survive this Agreement and the Employment Period indefinitely.

(k) Effectiveness . Notwithstanding the foregoing, none of Parent, the Company or its subsidiaries shall have any obligations to Executive or his beneficiaries under this Agreement, in the event Executive is unable to perform his duties hereunder, including due to death or Disability or Executive commits an act that would constitute Cause, in each case prior to the closing of the Transaction, in which case this Agreement shall be of no force and effect. Further, this Agreement shall be null and void and of no further effect in the event that the Merger Agreement is terminated or the Effective Date does not occur.

(l) Descriptive Headings . The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. All references to a “Section” in this Agreement are to a section of the Agreement unless otherwise noted.

(m) Construction . Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party.

(n) Code Section 409A . Notwithstanding anything herein or elsewhere to the contrary, to the extent Executive or the Company notifies the other that this Agreement may result in Executive being subject to the penalties of Section 409A of the Code, Executive and the Company agree to negotiate (and the Company shall cause any affiliate to negotiate), in good faith alternatives to avoid such penalties.

 

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

 

REALOGY CORPORATION
By:  

/s/ David J. Weaving

Name:   David J. Weaving
Title:  

Executive Vice President and

Chief Administrative Officer

RICHARD A. SMITH
Signature:  

/s/ Richard A. Smith


Exhibit A

Form of Release

THIS RELEASE (the “ Release ”) is entered into between Richard A. Smith (“ Executive ”) and Realogy Corporation, a Delaware corporation (“ Realogy ”), for the benefit of Realogy. The entering into and non-revocation of this Release is a condition to Executive’s right to receive the payments under Section 4 [(a)][(b)] of the employment agreement entered into by and between Executive and Realogy, dated as of April 10, 2007 (the “ Employment Agreement ”). Capitalized terms used and not defined herein shall have the meaning provided in the Employment Agreement.

Accordingly, Executive and Realogy agree as follows.

1. In consideration for the payments and other benefits provided to Executive by the Employment Agreement, to which Executive is not otherwise entitled, and the sufficiency of which Executive acknowledges, Executive represents and agrees, as follows:

(a) Executive, for himself, his heirs, administrators, representatives, executors, successors and assigns (collectively “ Releasers ”), hereby irrevocably and unconditionally releases, acquits and forever discharges and agrees not to sue Realogy or any of its parents, subsidiaries, divisions, affiliates and related entities and its current and former directors, officers, shareholders, trustees, employees, consultants, independent contractors, representatives, agents, servants, successors and assigns and all persons acting by, through or under or in concert with any of them (collectively “ Releasees ”), from all claims, rights and liabilities up to and including the date of this Release arising from or relating to Executive’s employment with, or termination of employment from, the Company, under the Employment Agreement and from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of actions, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected and any claims of wrongful discharge, breach of contract, implied contract, promissory estoppel, defamation, slander, libel, tortious conduct, employment discrimination or claims under any federal, state or local employment statute, law, order or ordinance, including any rights or claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq. (“ADEA”), or any other federal, state or municipal ordinance relating to discrimination in employment. Nothing contained herein shall restrict the parties’ rights to enforce the terms of this Release.

(b) To the maximum extent permitted by law, Executive agrees that he has not filed, nor will he ever file, a lawsuit asserting any claims which are released by this Release, or to accept any benefit from any lawsuit which might be filed by another person or government entity based in whole or in part on any event, act, or omission which is the subject of this Release.

(c) This Release specifically excludes Executive’s rights and Realogy’s obligations under Sections 2(c)(iii)(2), 7 and 9 of the Employment Agreement, the Benefit Plans, and the Equity Documents. Executive’s entitlement to vested benefits under the Benefit Plans and the


Equity Documents shall be determined in accordance with the provisions of the Benefit Plans or Equity Documents, as the case may be. Nothing contained in this Release shall release Executive from his obligations, including any obligations to abide by restrictive covenants, under the Employment Agreement, the Equity Documents or the Benefit Plans that continue or are to be performed following termination of employment.

(d) Executive represents that he is not aware of any facts or circumstances that would give rise, based on his actions, to any claims or lawsuits against Realogy or any Releasee.

(e) The parties agree that this Release shall not affect the rights and responsibilities of the US Equal Employment Opportunity Commission (hereinafter “ EEOC ”) to enforce ADEA and other laws. In addition, the parties agree that this Release shall not be used to justify interfering with Executive’s protected right to file a charge or participate in an investigation or proceeding conducted by the EEOC. The parties further agree that Executive knowingly and voluntarily waives all rights or claims (that arose prior to Executive’s execution of this Release) the Releasers may have against the Releasees, or any of them, to receive any benefit or remedial relief (including, but not limited to, reinstatement, back pay, front pay, damages, attorneys’ fees, experts’ fees) as a consequence of any investigation or proceeding conducted by the EEOC.

2. Executive acknowledges that Realogy has specifically advised him of the right to seek the advice of an attorney concerning the terms and conditions of this Release. Executive further acknowledges that he has been furnished with a copy of this Release, and he has been afforded twenty-one (21) days in which to consider the terms and conditions set forth above prior to this Release. By executing this Release, Executive affirmatively states that he has had sufficient and reasonable time to review this Release and to consult with an attorney concerning his legal rights prior to the final execution of this Release. Executive further agrees that he has carefully read this Release and fully understands its terms. Executive understands that he may revoke this Release within seven (7) days after signing this Release. Revocation of this Release must be made in writing and must be received by Marc Becker at Apollo Management, L.P., 9 West 57th Street, 43rd Floor, New York, NY 10019 within the time period set forth above.

3. This Release will be governed by and construed in accordance with the laws of the state of Delaware, without giving effect to any choice of law or conflicting provision or rule (whether of the state of Delaware or any other jurisdiction) that would cause the laws of any jurisdiction other than the state of Delaware to be applied. In furtherance of the foregoing, the internal law of the state of Delaware will control the interpretation and construction of this agreement, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply. The provisions of this Release are severable, and if any part or portion of it is found to be unenforceable, the other paragraphs shall remain fully valid and enforceable. This Release shall become effective and enforceable on the eighth day following its execution by Executive, provided he does not exercise his right of revocation as described above. If Executive fails to sign and deliver this Release or revokes his signature, this Release will be without force or effect, and Executive shall not be entitled to the payment under Section 4 [(a)][(b)] of the Employment Agreement.

Exhibit 10.20

 

  

EMPLOYMENT AGREEMENT (this

Agreement ”) dated as of April 10, 2007, between

REALOGY CORPORATION , a Delaware

corporation, (the “ Company ”) and ANTHONY E.

HULL (“ Executive ”).

WHEREAS, pursuant to the Agreement and Plan of Merger, made and entered into as of the 15th day of December, 2006, by and among Domus Holdings Corp. (the “ Parent ”), the Company and Domus Acquisition Corp. (the “ Merger Agreement ”), Domus Acquisition Corp. will be merged with and into the Company (the “ Transaction ”), and the Company will be the surviving corporation in the Transaction;

WHEREAS, in connection with the Transaction, the Company desires to employ Executive and Executive desires to be employed by the Company;

WHEREAS, the Company and Executive are parties to that certain employment agreement dated as of the effective date of the spin-off of the Company from Cendant Corporation, a Delaware corporation, as such employment agreement has been amended or supplemented through the Effective Date (as defined in Section 1) (the “ Prior Agreement ”); and

WHEREAS, Executive, as a condition of his employment, will make a substantial investment in the Parent concurrently with the closing of the Transaction by purchasing 200,000 shares of common stock of the Parent, par value $0.01 (“ Common Stock ”), at a price of $10.00 per share;

NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Employment Period .

The initial term of Executive’s employment hereunder shall be for a period of five (5) years (the “ Initial Term ”) commencing on the closing of the Transaction (the “ Effective Date ”) and ending on the fifth anniversary of the Effective Date, unless terminated earlier pursuant to Section 3 (the “ Employment Period ”); provided , however , that the Employment Period shall automatically be renewed for an additional period of one (1) year upon the expiration of the Initial Term unless either party gives at least ninety (90) days’ written notice of its intention not to renew the Employment Period. Upon Executive’s termination of employment with the Company for any reason, he shall immediately resign all positions with the Company or any of its subsidiaries or affiliates, including any position as a member of the Parent’s Board of Directors and a member of the Company’s Board of Directors (the “ Board ”).

Section 2. Terms of Employment .

(a) Position . During the term of Executive’s employment under this Agreement, Executive shall serve as Executive Vice President, Chief Financial Officer and Treasurer of the Company and shall have such duties and responsibilities as shall be assigned to


Executive by the President of the Company (or, if the President of the Company as of the Effective Date is no longer serving in such position, the Chief Executive Officer of the Company) (such individual, the “ Reporting Person ”). In performing his duties hereunder, Executive shall report directly to the Reporting Person. At the request of the Company, Executive shall also serve as an officer of any of its subsidiaries or affiliates without additional compensation.

(b) Duties . During the Employment Period, Executive agrees to devote all of his business time to the business and affairs of the Company and to use Executive’s reasonable best efforts to perform faithfully, effectively and efficiently his responsibilities and obligations hereunder. Notwithstanding the foregoing, nothing herein shall prohibit Executive from (i) serving on civic or charitable boards or committees and (ii) managing personal investments, so long as such activities do not materially interfere with the performance of Executive’s responsibilities hereunder.

(c) Compensation .

(i) Base Salary . During the Employment Period, Executive shall receive an initial annual base salary in an amount equal to $500,000, which shall be paid in accordance with the customary payroll practices of the Company (the “ Annual Base Salary ”). Executive’s Annual Base Salary shall be reviewed at least annually by the Board but may not be reduced, and in the event of any increase thereof, all references to “Annual Base Salary” as used in this Agreement shall refer to such increased amount.

(ii) Bonuses . The Company shall establish a performance-based bonus plan (the “ Plan ”) to be applicable for each fiscal year of the Company (a “ Fiscal Year ”) ending during the Employment Period pursuant to which Executive will be eligible to receive an annual bonus (the “ Bonus ”) with respect to each Fiscal Year of the Company ending during the Employment Period (each, a “ Bonus Year ”). The Board or the Compensation Committee of the Board (the “ Compensation Committee ”) will administer the Plan and shall establish performance objectives for each Fiscal Year, which performance objectives shall be reasonably related to the Company’s business objectives. In the event that, with respect to the applicable Fiscal Year of the Company ending during the Employment Period, the Company achieves the pre-established target performance goals based on actual performance, Executive shall be entitled to receive a Bonus in an amount equal to 100% of Executive’s Annual Base Salary (“ Target Bonus ”), (and in the event the Board or the Compensation Committee increases Executive’s Target Bonus after the Effective Date, all references to “Target Bonus” as used in this Agreement shall refer to such increased amount). Subject to Section 4, Executive will be entitled to receive the Bonus only upon the Company’s achievement of the specified performance objectives and if Executive is employed on the last day of the applicable Bonus Year. The Bonus shall become payable on March 15 of the year following the end of the applicable Bonus Year, provided that the Board or Compensation Committee finally determines (x) that the Company has achieved the applicable performance objectives and (y) the amount of the bonus that shall be paid to each executive entitled to receive a bonus for the applicable Bonus Year. If the Board or Compensation Committee has not made such final determination by March 15 of such year, the Bonus (if any) shall instead be paid as soon as practicable thereafter during such year.

(iii) Benefits . During the Employment Period, Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other senior executives of the Company and shall be eligible for

 

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participation in, and shall receive all benefits under, welfare benefit plans, practices, policies and programs provided by the Company to the extent applicable generally to other senior executives of the Company (“ Benefit Plans ”). The benefits provided to Executive shall be, in the aggregate, comparable to those benefits that Executive was receiving at the Company immediately prior to the Effective Date, but excluding those benefits under any nonqualified deferred compensation plans that are being amended or terminated in connection with the Transaction or that relate to or provide benefits or compensation measured with respect to the Company’s common stock.

(iv) Expenses . During the term of Executive’s employment, Executive shall be entitled to receive reimbursement for all reasonable business expenses incurred by Executive in performance of his duties hereunder, provided that Executive provides all necessary documentation in accordance with Company policy.

(v) Stock Options . Concurrent with the closing of the Transaction, the Company shall cause the Parent to grant Executive a stock option (the “ Option Grant ”) to purchase 750,000 shares of Common Stock, at an exercise price of $10.00 per share. The Option Grant will be pursuant and subject to the terms and conditions set forth in the Parent’s 2007 Stock Incentive Plan (the “ Stock Incentive Plan ”) and Executive’s option agreement associated with the Option Grant (the “ Option Agreement ”, which is attached hereto as Appendix A), and Executive’s purchase of the Purchased Shares as provided in Section 2(c)(vii) below.

(vi) Restricted Stock . Concurrent with the closing of the Transaction, the Company shall cause the Parent to grant Executive a grant (the “ Restricted Stock Grant ”) of restricted shares of Common Stock (“ Restricted Shares ”). The Restricted Stock Grant will be pursuant and subject to the terms and conditions set forth in the Stock Incentive Plan and the restricted stock agreement evidencing such grant (the “ Restricted Stock Agreement ”, which is attached hereto as Appendix B). The Restricted Stock Grant will be comprised of 100,000 Restricted Shares and shall be subject to the vesting, termination and other terms set forth in the Restricted Stock Agreement.

(vii) Investment . Concurrent with the closing of the Transaction, Executive shall purchase 200,000 shares of Common Stock, at a price of $10.00 per share (the “ Purchased Shares ”). The Purchased Shares shall be subject to the terms of the Stock Incentive Plan and Executive’s Subscription Agreement (attached hereto as Appendix C) and Executive’s Contribution Agreement (attached hereto as Appendix D). All of the Purchased Shares will be fully vested at the Effective Date.

(viii) Management Investor Rights Agreement . All Purchased Shares, shares purchased pursuant to the Restricted Shares, the Option Grant and Common Stock held by Executive pursuant to the vesting of Restricted Shares and the exercise of the Option Grant will be subject to the terms and conditions of the Management Investor Rights Agreement by and among the Parent, Executive, and other signatories thereto (the “ Management Investor Rights Agreement ”), including the restrictive covenants contained in Annex I to Section 8 thereof. The Option Agreement, Stock Incentive Plan, Restricted Stock Agreement, Management Investor Rights Agreement, Subscription Agreement and any other stock or stock-based award agreement entered into by and between the Company and Executive after the date hereof, collectively, the “ Equity Documents ”.

 

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Section 3. Termination of Employment .

(a) Death or Disability . Executive’s employment hereunder shall terminate automatically upon Executive’s death. If Executive becomes subject to a Disability during the Employment Period (pursuant to the definition of Disability set forth below), the Company may give Executive written notice in accordance with Sections 3(e) and 9(h) of its intention to terminate Executive’s employment. For purposes of this Agreement, “ Disability ” means (i) Executive’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) Executive is, by reason of any medically determinable physical of mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Company. Whether Executive has incurred a “Disability” shall be determined by a physician selected by the Company or its insurers.

(b) Cause . Executive’s employment may be terminated at any time by the Company for Cause. For purposes of this Agreement, “ Cause ” shall mean (i) Executive’s willful failure to substantially perform his duties as an employee of the Company or any subsidiary (other than any such failure resulting from incapacity due to physical or mental illness), (ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Company or any subsidiary, (iii) Executive’s conviction of, or plea of guilty or nolo contendere to a charge of commission of, a felony or crime involving moral turpitude, (iv) Executive’s indictment for a charge of commission of a felony or any crime involving moral turpitude, provided that the Board determines in good faith that such indictment would result in a material adverse impact to the business or reputation of the Company, (v) Executive’s gross negligence in the performance of his duties, or (vi) Executive purposefully or negligently makes (or has been found to have made) a false certification to the Company pertaining to its financial statements; a termination will not be for “Cause” pursuant to clause (i), (ii) or (v), to the extent such conduct is curable, unless the Company shall have notified Executive in writing describing such conduct and Executive shall have failed to cure such conduct within ten (10) business days after his receipt of such written notice.

(c) Termination Without Cause . The Company may terminate Executive’s employment hereunder without Cause at any time.

(d) Good Reason . Executive’s employment may be terminated at any time by Executive for Good Reason or without Good Reason upon 90 days’ prior written notice, provided, in the case of a termination for Good Reason, that Executive provides such notice within 60 days after the occurrence of the event giving rise to the termination for Good Reason. For purposes of this Agreement, “ Good Reason ” means voluntary resignation after any of the following actions taken by the Company or any of its subsidiaries without Executive’s consent: (i) a material reduction of Executive’s duties and responsibilities to the Company, (ii) a reduction in Executive’s Annual Base Salary or Target Bonus (not including any diminution related to a broader compensation reduction that (A) is made in consultation with the Reporting Person and (B) is applied to all senior executives of the Company in a relatively proportionate manner); (iii) the relocation of

 

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Executive’s primary office to a location more than 30 miles from the prior location; (iv) delivery of notice of non-renewal of the Employment Period by the Company (other than non-renewal by the Company due to Executive’s Disability, termination for Cause or termination by Executive); or (v) a material breach by the Company of a material provision of this Agreement (which for the avoidance of doubt includes Section 2(a) of this Agreement, but which would not include any promotion or lateral assignment); a termination shall not be for “Good Reason” pursuant to clause (i), (ii), or (iii), unless Executive shall have given written notice of his intention to resign for Good Reason and the Company shall have failed to cure the event giving rise to Good Reason within ten (10 ) business days after the Company’s receipt of such written notice.

(e) Notice of Termination . Any termination by the Company for Cause or without Cause, or by Executive for Good Reason or without Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 9(h). For purposes of this Agreement, a “ Notice of Termination ” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date. The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company hereunder or preclude Executive or the Company from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder.

(f) Date of Termination . “ Date of Termination ” means (i) if Executive’s employment is terminated by the Company for Cause, without Cause or by reason of Disability, or by Executive for Good Reason or without Good Reason, the date of receipt of the Notice of Termination (in the case of a termination with or without Good Reason, provided such notice is in accordance with Section 3(d)) or any later date specified therein pursuant to Section 3(e), as the case may be and (ii) if Executive’s employment is terminated by reason of death, the date of death.

Section 4. Obligations of the Company upon Termination .

(a) With Good Reason; Without Cause . If during the Employment Period, the Company shall terminate Executive’s employment without Cause or Executive shall terminate his employment for Good Reason, then the Company will provide Executive with the following severance payments and/or benefits:

(i) Prior to the thirtieth day following the Date of Termination, the Company shall pay to Executive in a lump sum, to the extent not previously paid, (i) the Annual Base Salary through the Date of Termination, and (ii) the Bonus earned for any Bonus Year ended prior to the year in which the Date of Termination occurs, provided that Executive was employed on the last day of such Bonus Year (the “ Accrued Obligations ”); and

(ii) The Company will pay Executive an aggregate sum of 200% of Executive’s Annual Base Salary and Target Bonus (such amount, the “ Cash Severance ”) as

 

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follows: (i) one-half of the Cash Severance shall be payable to Executive in a lump sum, within 30 business days of the Date of Termination and (ii) the remaining one-half of the Cash Severance will be payable to Executive in twenty-four (24) equal monthly installments commencing as of the first day of the calendar month following the month in which the Date of Termination occurs; and

(iii) From the period beginning on the Date of Termination through the earlier to occur of (x) the second anniversary of the Date of Termination and (y) the date Executive becomes eligible to participate in another employer’s medical and dental benefit plans, as applicable (the “New Employer Plan”), Executive shall be entitled to participate in the same medical and dental benefit plans maintained by the Company for its active employees, on the same terms (including employee-paid portions of insurance premiums and co-pays) as such active employees, all as in effect from time to time during such period; provided, however, that Executive acknowledges and agrees that such benefit continuation coverage shall run concurrently with the benefit continuation coverage to which Executive would be entitled to elect to receive under the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”); and provided, further, however, that, if applicable, Executive shall be required to notify the Company of the date on which Executive shall become eligible to participate in any New Employer Plan promptly after Executive being advised of such date by such other employer.

Notwithstanding the foregoing provisions of this Section 4(a), to the extent required in order to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), amounts to be paid under this Section 4(a) shall be paid to Executive on the first business day after the date that is six months following Executive’s “separation from service” within the meaning of Section 409A of the Code.

(b) Death or Disability . If Executive’s employment shall be terminated by reason of Executive’s death or Disability, then the Company will provide Executive (or his estate or legal representative) with the following severance payments and/or benefits: (A) the Accrued Obligations; (B) a lump sum equal to 100% of Executive’s Annual Base Salary; and (C) the Welfare Benefits. Notwithstanding the foregoing provisions of this Section 4(b), to the extent required in order to comply with Section 409A of Code, amounts to be paid under this Section 4(b) shall be paid to Executive on the first business day after the date that is six months following Executive’s “separation from service” within the meaning of Section 409A of the Code. Thereafter, the Company shall have no further obligation to Executive or his legal representatives, other than any rights to vested benefits under any Benefit Plans, indemnification rights he may have under this Agreement and any rights he may have under the Equity Documents.

(c) Cause; Other than for Good Reason . If Executive’s employment shall be terminated by the Company for Cause or by Executive without Good Reason, then the Company shall have no further payment obligations to Executive other than the Accrued Obligations. Thereafter, the Company shall have no further obligation to Executive or his legal representatives, other than any rights to vested benefits under any Benefit Plans, indemnification rights he may have under this Agreement, and any rights he may have under the Equity Documents.

(d) General Release . The Company’s obligations to make payments under Sections 4(a) and in the case of Disability under Section 4(b) are conditioned on Executive’s or his legal representative’s (as applicable) executing a general release of claims against the Company and its subsidiaries and affiliates and their successors and assigns (and the officers and directors of such entities) substantially in the form attached hereto as Exhibit A (the “ Release ”). For the avoidance of doubt, the Company’s obligations under Section 8 of this Agreement, the Benefit Plans, and the Equity Documents shall not be subject to Executive’s execution of the Release nor to Executive’s obligations under Section 5 of this Agreement, unless otherwise specifically provided in such other arrangements.

Section 5. Restrictive Covenants . Executive shall be subject to the restrictive covenants set forth in Annex I to Section 8 of the Management Investor Rights Agreement in accordance with its terms.

Section 6. Severance Payments. In addition to the foregoing, and not in any way in limitation of any right or remedy otherwise available to the Company, if the Board reasonably

 

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and in good faith believes Executive has violated or is in violation of any provision of Annex I of the Management Investor Rights Agreement, the Board may unilaterally suspend Executive’s right to receive any Cash Severance then or thereafter due from the Company to Executive, provided that the Board (a) gives Executive advance written notice of such suspension and (b) initiates an action or claim to enforce the Company’s rights in respect of such restrictive covenants promptly after such suspension. In the event that the Company prevails on such action or claim, Executive’s right to receive, and the Company’s obligation to pay, any additional Cash Severance, including any previously suspended amounts, shall be terminated immediately, and Executive shall have no further rights to Cash Severance. In the event that Executive prevails on such action or claim, the Company shall be required to pay to Executive in a lump sum within thirty (30) days of such adjudication (or, to the extent required in order to comply with Section 409A of the Code on the first business day after the date that is six months following Executive’s “separation from service” within the meaning of Section 409A of the Code) any Cash Severance the payment of which was delayed due to such suspension, plus interest for any period during which the payment of the Cash Severance was suspended at the prime rate, as published in the Wall Street Journal on the date of such suspension, and to commence payment of future installments of Cash Severance in accordance with Section 4(a)(ii).

Section 7. Executive’s Representations, Warranties and Covenants .

(a) Executive hereby represents and warrants to the Company and its subsidiaries that:

(1) Executive has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by Executive;

(2) the execution, delivery and performance of this Agreement by Executive does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Executive is a party or any judgment, order or decree to which Executive is subject;

(3) Executive is not a party to or bound by any employment agreement, consulting agreement, non-compete agreement, fee for services agreement, confidentiality agreement or similar agreement with any other Person other than the Company;

(4) upon the execution and delivery of this Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of Executive, enforceable in accordance with its terms;

(5) Executive understands that Parent and the Company will rely upon the accuracy and truth of the representations and warranties of Executive set forth herein and Executive consents to such reliance; and

(6) as of the date of execution of this Agreement, Executive is not in breach of any of its terms, including having committed any acts that would form the basis for a Cause termination if such act had occurred after the Effective Date.

 

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(b) The Company and its subsidiaries hereby represent and warrant to Executive that:

(1) the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by the Company;

(2) the execution, delivery and performance of this Agreement by the Company does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which the Company is a party or any judgment, order or decree to which the Company is subject;

(3) upon the execution and delivery of this Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of the Company, enforceable in accordance with its terms; and

(4) the Company understands that Executive will rely upon the accuracy and truth of the representations and warranties of the Company set forth herein and the Company consents to such reliance.

Section 8. Indemnification .

The Company shall indemnify Executive to the maximum extent permitted under the General Corporate Law of Delaware for acts taken within the scope of his employment. To the extent that the Company obtains coverage under a director and officer indemnification policy, Executive will be entitled to such coverage on a basis that is no less favorable than the coverage provided to any other officer or director of the Company.

Section 9. General Provisions .

(a) Severability . It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable under any present or future law, and if the rights and obligations of any party under this Agreement will not be materially and adversely affected thereby, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction; furthermore, in lieu of such invalid or unenforceable provision there will be added automatically as a part of this Agreement, a legal, valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

(b) Entire Agreement . This Agreement and the Equity Documents embody the complete agreement and understanding among the parties hereto with respect to the subject

 

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matter hereof and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way (including, without limitation, any other employment, severance or change-in-control agreement or understanding). For the avoidance of doubt, Executive, the Company and the Subsidiaries acknowledge that any agreement between Executive and the Company or Cendant Corporation or any subsidiary or affiliate of any of the foregoing, entered into prior to the Effective Date, including without limitation, the Prior Agreement, shall be void ab initio as of immediately before the Effective Date.

(c) Counterparts . This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

(d) Successors and Assigns .

(i) This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(ii) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law, or otherwise.

(e) Governing Law . THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

(f) Enforcement .

(i) Arbitration . Except for the Company or its Affiliate’s right to obtain injunctive relief for violation of Section 5 of this Agreement or in Annex I to Section 8 of the Management Investor Rights Agreement, any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation, breach or

 

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enforcement which the parties are unable to resolve by mutual agreement, shall be settled by submission by either party of the controversy, claim or dispute to binding arbitration in New York (unless the parties agree in writing to a different location), before a single arbitrator in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association then in effect. In any such arbitration proceeding the parties agree to provide all discovery deemed necessary by the arbitrator. The decision and award made by the arbitrator shall be final, binding and conclusive on all parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof. Each party shall bear its or his costs and expenses in any such arbitration and one-half of the arbitrator’s fees and costs; provided , however , if Executive prevails on substantially all material claims, the Company shall reimburse Executive for all of his reasonable attorney’s fees and costs.

(ii) Remedies . All remedies hereunder are cumulative, are in addition to any other remedies provided for by law and may, to the extent permitted by law, be exercised concurrently or separately, and the exercise of any one remedy shall not be deemed to be an election of such remedy or to preclude the exercise of any other remedy.

(iii) Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

(g) Amendment and Waiver . The provisions of this Agreement may be amended and waived only with the prior written consent of the Company and Executive and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall be construed as a waiver of such provisions or affect the validity, binding effect or enforceability of this Agreement or any provision hereof.

(h) Notices . Any notice provided for in this Agreement must be in writing and must be either personally delivered, transmitted via telecopier, mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated or at such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given hereunder and received when delivered personally, when received if transmitted via telecopier, five days after deposit in the U.S. mail and one day after deposit for overnight delivery with a reputable overnight courier service.

If to the Company, to:

Realogy Corporation

c/o Apollo Management VI, L.P.

9 West 57th Street

New York, New York 10019

Facsimile: (212) 515-3288

Attention: Marc Becker

 

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with a copy (which shall not constitute notice) to:

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 Executive, to:

Executive’s home address most recently on file with the Company.

with a copy (which shall not constitute notice) to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Attention: Andrea K. Wahlquist, Esq.

(i) Withholding . The Company may withhold from any amounts payable or benefits to be provided to Executive under this Agreement or otherwise all Federal, state, city or other taxes and other amounts that the Company may reasonably determine are required to be withheld pursuant to any applicable law or regulation.

(j) Survival of Representations, Warranties and Agreements . All representations, warranties and agreements contained herein shall survive this Agreement and the Employment Period indefinitely.

(k) Effectiveness . Notwithstanding the foregoing, none of Parent, the Company or its subsidiaries shall have any obligations to Executive or his beneficiaries under this Agreement, in the event Executive is unable to perform his duties hereunder, including due to death or Disability or Executive commits an act that would constitute Cause, in each case prior to the closing of the Transaction, in which case this Agreement shall be of no force and effect. Further, this Agreement shall be null and void and of no further effect in the event that the Merger Agreement is terminated or the Effective Date does not occur.

(l) Descriptive Headings . The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. All references to a “Section” in this Agreement are to a section of the Agreement unless otherwise noted.

(m) Construction . Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party.

(n) Code Section 409A . Notwithstanding anything herein or elsewhere to the contrary, to the extent Executive or the Company notifies the other that this Agreement may

 

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result in Executive being subject to the penalties of Section 409A of the Code, Executive and the Company agree to negotiate (and the Company shall cause any affiliate to negotiate), in good faith alternatives to avoid such penalties.

 

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

 

REALOGY CORPORATION
By:  

/s/ David J. Weaving

Name:   David J. Weaving
Title:  

Executive Vice President and

Chief Executive Officer

ANTHONY E. HULL
Signature:  

/s/ Anthony E. Hull


Exhibit A

Form of Release

THIS RELEASE (the “ Release ”) is entered into between Anthony E. Hull (“ Executive ”) and Realogy Corporation, a Delaware corporation (“ Realogy ”), for the benefit of Realogy. The entering into and non-revocation of this Release is a condition to Executive’s right to receive the payments under Section 4 [(a)][(b)] of the employment agreement entered into by and between Executive and Realogy, dated as of April 10, 2007 (the “ Employment Agreement ”). Capitalized terms used and not defined herein shall have the meaning provided in the Employment Agreement.

Accordingly, Executive and Realogy agree as follows.

1. In consideration for the payments and other benefits provided to Executive by the Employment Agreement, to which Executive is not otherwise entitled, and the sufficiency of which Executive acknowledges, Executive represents and agrees, as follows:

(a) Executive, for himself, his heirs, administrators, representatives, executors, successors and assigns (collectively “ Releasers ”), hereby irrevocably and unconditionally releases, acquits and forever discharges and agrees not to sue Realogy or any of its parents, subsidiaries, divisions, affiliates and related entities and its current and former directors, officers, shareholders, trustees, employees, consultants, independent contractors, representatives, agents, servants, successors and assigns and all persons acting by, through or under or in concert with any of them (collectively “ Releasees ”), from all claims, rights and liabilities up to and including the date of this Release arising from or relating to Executive’s employment with, or termination of employment from, the Company, under the Employment Agreement and from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of actions, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected and any claims of wrongful discharge, breach of contract, implied contract, promissory estoppel, defamation, slander, libel, tortious conduct, employment discrimination or claims under any federal, state or local employment statute, law, order or ordinance, including any rights or claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq. (“ADEA”), or any other federal, state or municipal ordinance relating to discrimination in employment. Nothing contained herein shall restrict the parties’ rights to enforce the terms of this Release.

(b) To the maximum extent permitted by law, Executive agrees that he has not filed, nor will he ever file, a lawsuit asserting any claims which are released by this Release, or to accept any benefit from any lawsuit which might be filed by another person or government entity based in whole or in part on any event, act, or omission which is the subject of this Release.

(c) This Release specifically excludes Executive’s rights and Realogy’s obligations under Section 8 of the Employment Agreement, the Benefit Plans, and the Equity Documents. Executive’s entitlement to vested benefits under the Benefit Plans and the Equity Documents


shall be determined in accordance with the provisions of the Benefit Plans or Equity Documents, as the case may be. Nothing contained in this Release shall release Executive from his obligations, including any obligations to abide by restrictive covenants, under the Employment Agreement, the Equity Documents or the Benefit Plans that continue or are to be performed following termination of employment.

(d) Executive represents that he is not aware of any facts or circumstances that would give rise, based on his actions, to any claims or lawsuits against Realogy or any Releasee.

(e) The parties agree that this Release shall not affect the rights and responsibilities of the US Equal Employment Opportunity Commission (hereinafter “ EEOC ”) to enforce ADEA and other laws. In addition, the parties agree that this Release shall not be used to justify interfering with Executive’s protected right to file a charge or participate in an investigation or proceeding conducted by the EEOC. The parties further agree that Executive knowingly and voluntarily waives all rights or claims (that arose prior to Executive’s execution of this Release) the Releasers may have against the Releasees, or any of them, to receive any benefit or remedial relief (including, but not limited to, reinstatement, back pay, front pay, damages, attorneys’ fees, experts’ fees) as a consequence of any investigation or proceeding conducted by the EEOC.

2. Executive acknowledges that Realogy has specifically advised him of the right to seek the advice of an attorney concerning the terms and conditions of this Release. Executive further acknowledges that he has been furnished with a copy of this Release, and he has been afforded twenty-one (21) days in which to consider the terms and conditions set forth above prior to this Release. By executing this Release, Executive affirmatively states that he has had sufficient and reasonable time to review this Release and to consult with an attorney concerning his legal rights prior to the final execution of this Release. Executive further agrees that he has carefully read this Release and fully understands its terms. Executive understands that he may revoke this Release within seven (7) days after signing this Release. Revocation of this Release must be made in writing and must be received by Marc Becker at Apollo Management, L.P., 9 West 57th Street, 43rd Floor, New York, NY 10019 within the time period set forth above.

3. This Release will be governed by and construed in accordance with the laws of the state of Delaware, without giving effect to any choice of law or conflicting provision or rule (whether of the state of Delaware or any other jurisdiction) that would cause the laws of any jurisdiction other than the state of Delaware to be applied. In furtherance of the foregoing, the internal law of the state of Delaware will control the interpretation and construction of this agreement, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply. The provisions of this Release are severable, and if any part or portion of it is found to be unenforceable, the other paragraphs shall remain fully valid and enforceable. This Release shall become effective and enforceable on the eighth day following its execution by Executive, provided he does not exercise his right of revocation as described above. If Executive fails to sign and deliver this Release or revokes his signature, this Release will be without force or effect, and Executive shall not be entitled to the payment under Section 4 [(a)][(b)] of the Employment Agreement.

Exhibit 10.21

 

 

EMPLOYMENT AGREEMENT (this

Agreement ”) dated as of April 10, 2007, between

REALOGY CORPORATION , a Delaware

corporation, (the “ Company ”) and ALEXANDER

E. PERRIELLO, III (“ Executive ”).

WHEREAS, pursuant to the Agreement and Plan of Merger, made and entered into as of the 15th day of December, 2006, by and among Domus Holdings Corp. (the “ Parent ”), the Company and Domus Acquisition Corp. (the “ Merger Agreement ”), Domus Acquisition Corp. will be merged with and into the Company (the “ Transaction ”), and the Company will be the surviving corporation in the Transaction;

WHEREAS, in connection with the Transaction, the Company desires to employ Executive and Executive desires to be employed by the Company;

WHEREAS, the Company and Executive are parties to that letter agreement dated as of November 7, 2006, as such letter agreement has been amended or supplemented through the Effective Date (as defined in Section 1) (the “ Prior Agreement ”); and

WHEREAS, Executive, as a condition of his employment, will make a substantial investment in the Parent concurrently with the closing of the Transaction by purchasing 200,000 shares of common stock of the Parent, par value $0.01 (“ Common Stock ”), at a price of $10.00 per share;

NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Employment Period .

The initial term of Executive’s employment hereunder shall be for a period of five (5) years (the “ Initial Term ”) commencing on the closing of the Transaction (the “ Effective Date ”) and ending on the fifth anniversary of the Effective Date, unless terminated earlier pursuant to Section 3 (the “ Employment Period ”); provided , however , that the Employment Period shall automatically be renewed for an additional period of one (1) year upon the expiration of the Initial Term unless either party gives at least ninety (90) days’ written notice of its intention not to renew the Employment Period. Upon Executive’s termination of employment with the Company for any reason, he shall immediately resign all positions with the Company or any of its subsidiaries or affiliates, including any position as a member of the Parent’s Board of Directors and a member of the Company’s Board of Directors (the “ Board ”).

Section 2. Terms of Employment .

(a) Position . During the term of Executive’s employment under this Agreement, Executive shall serve as President and CEO of President & CEO of the Realogy Franchise Group and shall have such duties and responsibilities as shall be assigned to Executive by the President of the Company (or, if the President of the Company as of the Effective Date is


no longer serving in such position, the Chief Executive Officer of the Company) (such individual, the “ Reporting Person ”). In performing his duties hereunder, Executive shall report directly to the Reporting Person. At the request of the Company, Executive shall also serve as an officer of any of its subsidiaries or affiliates without additional compensation.

(b) Duties . During the Employment Period, Executive agrees to devote all of his business time to the business and affairs of the Company and to use Executive’s reasonable best efforts to perform faithfully, effectively and efficiently his responsibilities and obligations hereunder. Notwithstanding the foregoing, nothing herein shall prohibit Executive from (i) serving on civic or charitable boards or committees and (ii) managing personal investments, so long as such activities do not materially interfere with the performance of Executive’s responsibilities hereunder.

(c) Compensation .

(i) Base Salary . During the Employment Period, Executive shall receive an initial annual base salary in an amount equal to $520,000, which shall be paid in accordance with the customary payroll practices of the Company (the “ Annual Base Salary ”). Executive’s Annual Base Salary shall be reviewed at least annually by the Board but may not be reduced, and in the event of any increase thereof, all references to “Annual Base Salary” as used in this Agreement shall refer to such increased amount.

(ii) Bonuses . The Company shall establish a performance-based bonus plan (the “ Plan ”) to be applicable for each fiscal year of the Company (a “ Fiscal Year ”) ending during the Employment Period pursuant to which Executive will be eligible to receive an annual bonus (the “ Bonus ”) with respect to each Fiscal Year of the Company ending during the Employment Period (each, a “ Bonus Year ”). The Board or the Compensation Committee of the Board (the “ Compensation Committee ”) will administer the Plan and shall establish performance objectives for each Fiscal Year, which performance objectives shall be reasonably related to the Company’s business objectives. In the event that, with respect to the applicable Fiscal Year of the Company ending during the Employment Period, the Company achieves the pre-established target performance goals based on actual performance, Executive shall be entitled to receive a Bonus in an amount equal to 100% of Executive’s Annual Base Salary (“ Target Bonus ”) (and in the event the Board or the Compensation Committee increase Executive’s Target Bonus after the Effective Date, all references to “Target Bonus” as used in this Agreement shall refer to such increased amount). Subject to Section 4, Executive will be entitled to receive the Bonus only upon the Company’s achievement of the specified performance objectives and if Executive is employed on the last day of the applicable Bonus Year. The Bonus shall become payable on March 15 of the year following the end of the applicable Bonus Year, provided that the Board or Compensation Committee finally determines (x) that the Company has achieved the applicable performance objectives and (y) the amount of the bonus that shall be paid to each executive entitled to receive a bonus for the applicable Bonus Year. If the Board or Compensation Committee has not made such final determination by March 15 of such year, the Bonus (if any) shall instead be paid as soon as practicable thereafter during such year.

(iii) Benefits . During the Employment Period, Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other senior executives of the Company and shall be eligible for participation in, and shall receive all benefits under, welfare benefit plans, practices, policies and programs provided by the Company to the extent applicable generally to other senior executives

 

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of the Company (“ Benefit Plans ”). The benefits provided to Executive shall be, in the aggregate, comparable to those benefits that Executive was receiving at the Company immediately prior to the Effective Date, but excluding those benefits under any nonqualified deferred compensation plans that are being amended or terminated in connection with the Transaction or that relate to or provide benefits or compensation measured with respect to the Company’s common stock.

(iv) Expenses . During the term of Executive’s employment, Executive shall be entitled to receive reimbursement for all reasonable business expenses incurred by Executive in performance of his duties hereunder, provided that Executive provides all necessary documentation in accordance with Company policy.

(v) Stock Options . Concurrent with the closing of the Transaction, the Company shall cause the Parent to grant Executive a stock option (the “ Option Grant ”) to purchase 750,000 shares of Common Stock, at an exercise price of $10.00 per share. The Option Grant will be pursuant and subject to the terms and conditions set forth in the Parent’s 2007 Stock Incentive Plan (the “ Stock Incentive Plan ”) and Executive’s option agreement associated with the Option Grant (the “ Option Agreement ”, which is attached hereto as Appendix A), and Executive’s purchase of the Purchased Shares as provided in Section 2(c)(vii) below.

(vi) Restricted Stock . Concurrent with the closing of the Transaction, the Company shall cause the Parent to grant Executive a grant (the “ Restricted Stock Grant ”) of restricted shares of Common Stock (“ Restricted Shares ”). The Restricted Stock Grant will be pursuant and subject to the terms and conditions set forth in the Stock Incentive Plan and the restricted stock agreement evidencing such grant (the “ Restricted Stock Agreement ”, which is attached hereto as Appendix B). The Restricted Stock Grant will be comprised of 50,000 Restricted Shares and shall be subject to the vesting, termination and other terms set forth in the Restricted Stock Agreement.

(vii) Investment . Concurrent with the closing of the Transaction, Executive shall purchase 200,000 shares of Common Stock, at a price of $10.00 per share (the “ Purchased Shares ”). The Purchased Shares shall be subject to the terms of the Stock Incentive Plan and Executive’s Subscription Agreement (attached hereto as Appendix C) and Executive’s Contribution Agreement (attached hereto as Appendix D). All of the Purchased Shares will be fully vested at the Effective Date.

(viii) Management Investor Rights Agreement . All Purchased Shares, shares purchased pursuant to the Restricted Shares, the Option Grant and Common Stock held by Executive pursuant to the vesting of Restricted Shares and the exercise of the Option Grant will be subject to the terms and conditions of the Management Investor Rights Agreement by and among the Parent, Executive, and other signatories thereto (the “ Management Investor Rights Agreement ”), including the restrictive covenants contained in Annex I to Section 8 thereof. The Option Agreement, Stock Incentive Plan, Restricted Stock Agreement, Management Investor Rights Agreement, Subscription Agreement and any other stock or stock-based award agreement entered into by and between the Company and Executive after the date hereof, collectively, the “ Equity Documents ”.

 

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Section 3. Termination of Employment .

(a) Death or Disability . Executive’s employment hereunder shall terminate automatically upon Executive’s death. If Executive becomes subject to a Disability during the Employment Period (pursuant to the definition of Disability set forth below), the Company may give Executive written notice in accordance with Sections 3(e) and 9(h) of its intention to terminate Executive’s employment. For purposes of this Agreement, “ Disability ” means (i) Executive’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) Executive is, by reason of any medically determinable physical of mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Company. Whether Executive has incurred a “Disability” shall be determined by a physician selected by the Company or its insurers.

(b) Cause . Executive’s employment may be terminated at any time by the Company for Cause. For purposes of this Agreement, “ Cause ” shall mean (i) Executive’s willful failure to substantially perform his duties as an employee of the Company or any subsidiary (other than any such failure resulting from incapacity due to physical or mental illness), (ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Company or any subsidiary, (iii) Executive’s conviction of, or plea of guilty or nolo contendere to a charge of commission of, a felony or crime involving moral turpitude, (iv) Executive’s indictment for a charge of commission of a felony or any crime involving moral turpitude, provided that the Board determines in good faith that such indictment would result in a material adverse impact to the business or reputation of the Company, (v) Executive’s gross negligence in the performance of his duties, or (vi) Executive purposefully or negligently makes (or has been found to have made) a false certification to the Company pertaining to its financial statements; a termination will not be for “Cause” pursuant to clause (i), (ii) or (v), to the extent such conduct is curable, unless the Company shall have notified Executive in writing describing such conduct and Executive shall have failed to cure such conduct within ten (10) business days after his receipt of such written notice.

(c) Termination Without Cause . The Company may terminate Executive’s employment hereunder without Cause at any time.

(d) Good Reason . Executive’s employment may be terminated at any time by Executive for Good Reason or without Good Reason upon 90 days’ prior written notice, provided, in the case of a termination for Good Reason, that Executive provides such notice within 60 days after the occurrence of the event giving rise to the termination for Good Reason. For purposes of this Agreement, “ Good Reason ” means voluntary resignation after any of the following actions taken by the Company or any of its subsidiaries without Executive’s consent: (i) a material reduction of Executive’s duties and responsibilities to the Company, (ii) a reduction in Executive’s Annual Base Salary or Target Bonus (not including any diminution related to a broader compensation reduction that (A) is made in consultation with the Reporting Person and (B) is applied to all senior executives of the Company in a relatively proportionate manner); (iii) the relocation of

 

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Executive’s primary office to a location more than 30 miles from the prior location; (iv) delivery of notice of non-renewal of the Employment Period by the Company (other than non-renewal by the Company due to Executive’s Disability, termination for Cause or termination by Executive); or (v) a material breach by the Company of a material provision of this Agreement (which for the avoidance of doubt includes Section 2(a) of this Agreement, but which would not include any promotion or lateral assignment); a termination shall not be for “Good Reason” pursuant to clause (i), (ii), or (iii), unless Executive shall have given written notice of his intention to resign for Good Reason and the Company shall have failed to cure the event giving rise to Good Reason within ten (10) business days after the Company’s receipt of such written notice.

(e) Notice of Termination . Any termination by the Company for Cause or without Cause, or by Executive for Good Reason or without Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 9(h). For purposes of this Agreement, a “ Notice of Termination ” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date. The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company hereunder or preclude Executive or the Company from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder.

(f) Date of Termination . “ Date of Termination ” means (i) if Executive’s employment is terminated by the Company for Cause, without Cause or by reason of Disability, or by Executive for Good Reason or without Good Reason, the date of receipt of the Notice of Termination (in the case of a termination with or without Good Reason, provided such notice is in accordance with Section 3(d)) or any later date specified therein pursuant to Section 3(e), as the case may be and (ii) if Executive’s employment is terminated by reason of death, the date of death.

Section 4. Obligations of the Company upon Termination .

(a) With Good Reason; Without Cause . If during the Employment Period, the Company shall terminate Executive’s employment without Cause or Executive shall terminate his employment for Good Reason, then the Company will provide Executive with the following severance payments and/or benefits:

(i) Prior to the thirtieth day following the Date of Termination, the Company shall pay to Executive in a lump sum, to the extent not previously paid, (i) the Annual Base Salary through the Date of Termination, and (ii) the Bonus earned for any Bonus Year ended prior to the year in which the Date of Termination occurs, provided that Executive was employed on the last day of such Bonus Year (the “ Accrued Obligations ”); and

(ii) The Company will pay Executive an aggregate sum of (x) 200%, in the event any such termination occurs prior to the first anniversary of the Effective Date, or within twelve months after any Change in Control (as such term is defined in the Stock Incentive Plan) that occurs subsequent to the Effective Date (any such period described in this clause (x), a “Protected Period”), or (y) 100% in the event any such termination occurs at any time other than during a Protected Period, of Executive’s Annual Base Salary and Target Bonus (such amount, the “ Cash Severance ”) as

 

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follows: (i) one-half of the Cash Severance shall be payable to Executive in a lump sum, within 30 business days of the Date of Termination and (ii) the remaining one-half of the Cash Severance will be payable to Executive in twelve (12) equal monthly installments commencing as of the first day of the calendar month following the month in which the Date of Termination occurs; and

(iii) From the period beginning on the Date of Termination through the earlier to occur of (x) the second anniversary of the Date of Termination and (y) the date Executive becomes eligible to participate in another employer’s medical and dental benefit plans, as applicable (the “New Employer Plan”), Executive shall be entitled to participate in the same medical and dental benefit plans maintained by the Company for its active employees, on the same terms (including employee-paid portions of insurance premiums and co-pays) as such active employees, all as in effect from time to time during such period; provided, however, that Executive acknowledges and agrees that such benefit continuation coverage shall run concurrently with the benefit continuation coverage to which Executive would be entitled to elect to receive under the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”); and provided, further, however, that, if applicable, Executive shall be required to notify the Company of the date on which Executive shall become eligible to participate in any New Employer Plan promptly after Executive being advised of such date by such other employer.

Notwithstanding the foregoing provisions of this Section 4(a), to the extent required in order to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), amounts to be paid under this Section 4(a) shall be paid to Executive on the first business day after the date that is six months following Executive’s “separation from service” within the meaning of Section 409A of the Code.

(b) Death or Disability . If Executive’s employment shall be terminated by reason of Executive’s death or Disability, then the Company will provide Executive (or his estate or legal representative) with the following severance payments and/or benefits: (A) the Accrued Obligations; (B) a lump sum equal to 100% of Executive’s Annual Base Salary; and (C) the Welfare Benefits. Notwithstanding the foregoing provisions of this Section 4(b), to the extent required in order to comply with Section 409A of Code, amounts to be paid under this Section 4(b) shall be paid to Executive on the first business day after the date that is six months following Executive’s “separation from service” within the meaning of Section 409A of the Code. Thereafter, the Company shall have no further obligation to Executive or his legal representatives, other than any rights to vested benefits under any Benefit Plans, indemnification rights he may have under this Agreement and any rights he may have under the Equity Documents.

(c) Cause; Other than for Good Reason . If Executive’s employment shall be terminated by the Company for Cause or by Executive without Good Reason, then the Company shall have no further payment obligations to Executive other than the Accrued Obligations. Thereafter, the Company shall have no further obligation to Executive or his legal representatives, other than any rights to vested benefits under any Benefit Plans, indemnification rights he may have under this Agreement, and any rights he may have under the Equity Documents.

(d) General Release . The Company’s obligations to make payments under Sections 4(a) and in the case of Disability under Section 4(b) are conditioned on Executive’s or his legal representative’s (as applicable) executing a general release of claims against the Company and its subsidiaries and affiliates and their successors and assigns (and the officers and directors of such entities) substantially in the form attached hereto as Exhibit A (the “ Release ”). For the avoidance of doubt, the Company’s obligations under Section 8 of this Agreement, the Benefit Plans, and the Equity Documents shall not be subject to Executive’s execution of the Release nor to Executive’s obligations under Section 5 of this Agreement, unless otherwise specifically provided in such other arrangements.

Section 5. Restrictive Covenants . Executive shall be subject to the restrictive covenants set forth in Annex I to Section 8 of the Management Investor Rights Agreement in accordance with its terms.

Section 6. Severance Payments . In addition to the foregoing, and not in any way in limitation of any right or remedy otherwise available to the Company, if the Board reasonably

 

6


and in good faith believes Executive has violated or is in violation of any provision of Annex I of the Management Investor Rights Agreement, the Board may unilaterally suspend Executive’s right to receive any Cash Severance then or thereafter due from the Company to Executive, provided that the Board (a) gives Executive advance written notice of such suspension and (b) initiates an action or claim to enforce the Company’s rights in respect of such restrictive covenants promptly after such suspension. In the event that the Company prevails on such action or claim, Executive’s right to receive, and the Company’s obligation to pay, any additional Cash Severance, including any previously suspended amounts, shall be terminated immediately, and Executive shall have no further rights to Cash Severance. In the event that Executive prevails on such action or claim, the Company shall be required to pay to Executive in a lump sum within thirty (30) days of such adjudication (or, to the extent required in order to comply with Section 409A of the Code on the first business day after the date that is six months following Executive’s “separation from service” within the meaning of Section 409A of the Code) any Cash Severance the payment of which was delayed due to such suspension, plus interest for any period during which the payment of the Cash Severance was suspended at the prime rate, as published in the Wall Street Journal on the date of such suspension, and to commence payment of future installments of Cash Severance in accordance with Section 4(a)(ii).

Section 7. Executive’s Representations, Warranties and Covenants .

(a) Executive hereby represents and warrants to the Company and its subsidiaries that:

(1) Executive has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by Executive;

(2) the execution, delivery and performance of this Agreement by Executive does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Executive is a party or any judgment, order or decree to which Executive is subject;

(3) Executive is not a party to or bound by any employment agreement, consulting agreement, non-compete agreement, fee for services agreement, confidentiality agreement or similar agreement with any other Person other than the Company;

(4) upon the execution and delivery of this Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of Executive, enforceable in accordance with its terms;

(5) Executive understands that Parent and the Company will rely upon the accuracy and truth of the representations and warranties of Executive set forth herein and Executive consents to such reliance; and

(6) as of the date of execution of this Agreement, Executive is not in breach of any of its terms, including having committed any acts that would form the basis for a Cause termination if such act had occurred after the Effective Date.

 

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(b) The Company and its subsidiaries hereby represent and warrant to Executive that:

(1) the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by the Company;

(2) the execution, delivery and performance of this Agreement by the Company does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which the Company is a party or any judgment, order or decree to which the Company is subject;

(3) upon the execution and delivery of this Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of the Company, enforceable in accordance with its terms; and

(4) the Company understands that Executive will rely upon the accuracy and truth of the representations and warranties of the Company set forth herein and the Company consents to such reliance.

Section 8. Indemnification .

The Company shall indemnify Executive to the maximum extent permitted under the General Corporate Law of Delaware for acts taken within the scope of his employment. To the extent that the Company obtains coverage under a director and officer indemnification policy, Executive will be entitled to such coverage on a basis that is no less favorable than the coverage provided to any other officer or director of the Company.

Section 9. General Provisions .

(a) Severability . It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable under any present or future law, and if the rights and obligations of any party under this Agreement will not be materially and adversely affected thereby, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction; furthermore, in lieu of such invalid or unenforceable provision there will be added automatically as a part of this Agreement, a legal, valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

(b) Entire Agreement . This Agreement and the Equity Documents embody the complete agreement and understanding among the parties hereto with respect to the subject

 

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matter hereof and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way (including, without limitation, any other employment, severance or change-in-control agreement or understanding). For the avoidance of doubt, Executive, the Company and the Subsidiaries acknowledge that any agreement between Executive and the Company or Cendant Corporation or any subsidiary or affiliate of any of the foregoing, entered into prior to the Effective Date, including without limitation, the Prior Agreement, shall be void ab initio as of immediately before the Effective Date.

(c) Counterparts . This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

(d) Successors and Assigns .

(i) This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(ii) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law, or otherwise.

(e) Governing Law . THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

(f) Enforcement .

(i) Arbitration . Except for the Company or its Affiliate’s right to obtain injunctive relief for violation of Section 5 of this Agreement or in Annex I to Section 8 of the Management Investor Rights Agreement, any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation, breach or

 

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enforcement which the parties are unable to resolve by mutual agreement, shall be settled by submission by either party of the controversy, claim or dispute to binding arbitration in New York (unless the parties agree in writing to a different location), before a single arbitrator in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association then in effect. In any such arbitration proceeding the parties agree to provide all discovery deemed necessary by the arbitrator. The decision and award made by the arbitrator shall be final, binding and conclusive on all parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof. Each party shall bear its or his costs and expenses in any such arbitration and one-half of the arbitrator’s fees and costs; provided , however , if Executive prevails on substantially all material claims, the Company shall reimburse Executive for all of his reasonable attorney’s fees and costs.

(ii) Remedies . All remedies hereunder are cumulative, are in addition to any other remedies provided for by law and may, to the extent permitted by law, be exercised concurrently or separately, and the exercise of any one remedy shall not be deemed to be an election of such remedy or to preclude the exercise of any other remedy.

(iii) Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

(g) Amendment and Waiver . The provisions of this Agreement may be amended and waived only with the prior written consent of the Company and Executive and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall be construed as a waiver of such provisions or affect the validity, binding effect or enforceability of this Agreement or any provision hereof.

(h) Notices . Any notice provided for in this Agreement must be in writing and must be either personally delivered, transmitted via telecopier, mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated or at such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given hereunder and received when delivered personally, when received if transmitted via telecopier, five days after deposit in the U.S. mail and one day after deposit for overnight delivery with a reputable overnight courier service.

 

If to the Company, to:
  Realogy Corporation
  c/o Apollo Management VI, L.P.
  9 West 57th Street
  New York, New York 10019
  Facsimile:   (212) 515-3288
  Attention:   Marc Becker

 

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with a copy (which shall not constitute notice) to:
  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 Executive, to:
  Executive’s home address most recently on file with the Company.
with a copy (which shall not constitute notice) to:
  Simpson Thacher & Bartlett LLP
  425 Lexington Avenue
  New York, NY 10017
  Attention:   Andrea K. Wahlquist, Esq.

(i) Withholding . The Company may withhold from any amounts payable or benefits to be provided to Executive under this Agreement or otherwise all Federal, state, city or other taxes and other amounts that the Company may reasonably determine are required to be withheld pursuant to any applicable law or regulation.

(j) Survival of Representations, Warranties and Agreements . All representations, warranties and agreements contained herein shall survive this Agreement and the Employment Period indefinitely.

(k) Effectiveness . Notwithstanding the foregoing, none of Parent, the Company or its subsidiaries shall have any obligations to Executive or his beneficiaries under this Agreement, in the event Executive is unable to perform his duties hereunder, including due to death or Disability or Executive commits an act that would constitute Cause, in each case prior to the closing of the Transaction, in which case this Agreement shall be of no force and effect. Further, this Agreement shall be null and void and of no further effect in the event that the Merger Agreement is terminated or the Effective Date does not occur.

(l) Descriptive Headings . The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. All references to a “Section” in this Agreement are to a section of the Agreement unless otherwise noted.

(m) Construction . Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party.

(n) Code Section 409A . Notwithstanding anything herein or elsewhere to the contrary, to the extent Executive or the Company notifies the other that this Agreement may

 

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result in Executive being subject to the penalties of Section 409A of the Code, Executive and the Company agree to negotiate (and the Company shall cause any affiliate to negotiate), in good faith alternatives to avoid such penalties.

 

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

 

REALOGY CORPORATION
By:  

/s/ David J. Weaving

Name:   David J. Weaving
Title:  

Executive Vice President and

Chief Executive Officer

ALEXANDER E. PERRIELLO
Signature:  

/s/ Alexander E. Perriello


Exhibit A

Form of Release

THIS RELEASE (the “ Release ”) is entered into between Alexander E. Perriello, III (“ Executive ”) and Realogy Corporation, a Delaware corporation (“ Realogy ”), for the benefit of Realogy. The entering into and non-revocation of this Release is a condition to Executive’s right to receive the payments under Section 4 [(a)][(b)] of the employment agreement entered into by and between Executive and Realogy, dated as of April 10, 2007 (the “ Employment Agreement ”). Capitalized terms used and not defined herein shall have the meaning provided in the Employment Agreement.

Accordingly, Executive and Realogy agree as follows.

1. In consideration for the payments and other benefits provided to Executive by the Employment Agreement, to which Executive is not otherwise entitled, and the sufficiency of which Executive acknowledges, Executive represents and agrees, as follows:

(a) Executive, for himself, his heirs, administrators, representatives, executors, successors and assigns (collectively “ Releasers ”), hereby irrevocably and unconditionally releases, acquits and forever discharges and agrees not to sue Realogy or any of its parents, subsidiaries, divisions, affiliates and related entities and its current and former directors, officers, shareholders, trustees, employees, consultants, independent contractors, representatives, agents, servants, successors and assigns and all persons acting by, through or under or in concert with any of them (collectively “ Releasees ”), from all claims, rights and liabilities up to and including the date of this Release arising from or relating to Executive’s employment with, or termination of employment from, the Company, under the Employment Agreement and from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of actions, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected and any claims of wrongful discharge, breach of contract, implied contract, promissory estoppel, defamation, slander, libel, tortious conduct, employment discrimination or claims under any federal, state or local employment statute, law, order or ordinance, including any rights or claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq. (“ADEA”), or any other federal, state or municipal ordinance relating to discrimination in employment. Nothing contained herein shall restrict the parties’ rights to enforce the terms of this Release.

(b) To the maximum extent permitted by law, Executive agrees that he has not filed, nor will he ever file, a lawsuit asserting any claims which are released by this Release, or to accept any benefit from any lawsuit which might be filed by another person or government entity based in whole or in part on any event, act, or omission which is the subject of this Release.

(c) This Release specifically excludes Executive’s rights and Realogy’s obligations under Section 8 of the Employment Agreement, the Benefit Plans, and the Equity Documents. Executive’s entitlement to vested benefits under the Benefit Plans and the Equity Documents


shall be determined in accordance with the provisions of the Benefit Plans or Equity Documents, as the case may be. Nothing contained in this Release shall release Executive from his obligations, including any obligations to abide by restrictive covenants, under the Employment Agreement, the Equity Documents or the Benefit Plans that continue or are to be performed following termination of employment.

(d) Executive represents that he is not aware of any facts or circumstances that would give rise, based on his actions, to any claims or lawsuits against Realogy or any Releasee.

(e) The parties agree that this Release shall not affect the rights and responsibilities of the US Equal Employment Opportunity Commission (hereinafter “ EEOC ”) to enforce ADEA and other laws. In addition, the parties agree that this Release shall not be used to justify interfering with Executive’s protected right to file a charge or participate in an investigation or proceeding conducted by the EEOC. The parties further agree that Executive knowingly and voluntarily waives all rights or claims (that arose prior to Executive’s execution of this Release) the Releasers may have against the Releasees, or any of them, to receive any benefit or remedial relief (including, but not limited to, reinstatement, back pay, front pay, damages, attorneys’ fees, experts’ fees) as a consequence of any investigation or proceeding conducted by the EEOC.

2. Executive acknowledges that Realogy has specifically advised him of the right to seek the advice of an attorney concerning the terms and conditions of this Release. Executive further acknowledges that he has been furnished with a copy of this Release, and he has been afforded twenty-one (21) days in which to consider the terms and conditions set forth above prior to this Release. By executing this Release, Executive affirmatively states that he has had sufficient and reasonable time to review this Release and to consult with an attorney concerning his legal rights prior to the final execution of this Release. Executive further agrees that he has carefully read this Release and fully understands its terms. Executive understands that he may revoke this Release within seven (7) days after signing this Release. Revocation of this Release must be made in writing and must be received by Marc Becker at Apollo Management, L.P., 9 West 57th Street, 43rd Floor, New York, NY 10019 within the time period set forth above.

3. This Release will be governed by and construed in accordance with the laws of the state of Delaware, without giving effect to any choice of law or conflicting provision or rule (whether of the state of Delaware or any other jurisdiction) that would cause the laws of any jurisdiction other than the state of Delaware to be applied. In furtherance of the foregoing, the internal law of the state of Delaware will control the interpretation and construction of this agreement, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply. The provisions of this Release are severable, and if any part or portion of it is found to be unenforceable, the other paragraphs shall remain fully valid and enforceable. This Release shall become effective and enforceable on the eighth day following its execution by Executive, provided he does not exercise his right of revocation as described above. If Executive fails to sign and deliver this Release or revokes his signature, this Release will be without force or effect, and Executive shall not be entitled to the payment under Section 4 [(a)][(b)] of the Employment Agreement.

Exhibit 10.22

 

 

EMPLOYMENT AGREEMENT (this

Agreement ”) dated as of April 10, 2007, between

REALOGY CORPORATION , a Delaware

corporation, (the “ Company ”) and BRUCE G.

ZIPF (“ Executive ”).

WHEREAS, pursuant to the Agreement and Plan of Merger, made and entered into as of the 15th day of December, 2006, by and among Domus Holdings Corp. (the “ Parent ”), the Company and Domus Acquisition Corp. (the “ Merger Agreement ”), Domus Acquisition Corp. will be merged with and into the Company (the “ Transaction ”), and the Company will be the surviving corporation in the Transaction;

WHEREAS, in connection with the Transaction, the Company desires to employ Executive and Executive desires to be employed by the Company;

WHEREAS, the Company and Executive are parties to that letter agreement dated as of November 7, 2006, as such letter agreement has been amended or supplemented through the Effective Date (as defined in Section 1) (the “ Prior Agreement ”); and

WHEREAS, Executive, as a condition of his employment, will make a substantial investment in the Parent concurrently with the closing of the Transaction by purchasing 160,000 shares of common stock of the Parent, par value $0.01 (“ Common Stock ”), at a price of $10.00 per share;

NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Employment Period .

The initial term of Executive’s employment hereunder shall be for a period of five (5) years (the “ Initial Term ”) commencing on the closing of the Transaction (the “ Effective Date ”) and ending on the fifth anniversary of the Effective Date, unless terminated earlier pursuant to Section 3 (the “ Employment Period ”); provided , however , that the Employment Period shall automatically be renewed for an additional period of one (1) year upon the expiration of the Initial Term unless either party gives at least ninety (90) days’ written notice of its intention not to renew the Employment Period. Upon Executive’s termination of employment with the Company for any reason, he shall immediately resign all positions with the Company or any of its subsidiaries or affiliates, including any position as a member of the Parent’s Board of Directors and a member of the Company’s Board of Directors (the “ Board ”).

Section 2. Terms of Employment .

(a) Position . During the term of Executive’s employment under this Agreement, Executive shall serve as President and CEO, NRT Incorporated and shall have such duties and responsibilities as shall be assigned to Executive by the President of the Company (or, if the President of the Company as of the Effective Date is no longer serving in such position, the


Chief Executive Officer of the Company) (such individual, the “ Reporting Person ”). In performing his duties hereunder, Executive shall report directly to the Reporting Person. At the request of the Company, Executive shall also serve as an officer of any of its subsidiaries or affiliates without additional compensation.

(b) Duties . During the Employment Period, Executive agrees to devote all of his business time to the business and affairs of the Company and to use Executive’s reasonable best efforts to perform faithfully, effectively and efficiently his responsibilities and obligations hereunder. Notwithstanding the foregoing, nothing herein shall prohibit Executive from (i) serving on civic or charitable boards or committees and (ii) managing personal investments, so long as such activities do not materially interfere with the performance of Executive’s responsibilities hereunder.

(c) Compensation .

(i) Base Salary . During the Employment Period, Executive shall receive an initial annual base salary in an amount equal to $520,000, which shall be paid in accordance with the customary payroll practices of the Company (the “ Annual Base Salary ”). Executive’s Annual Base Salary shall be reviewed at least annually by the Board but may not be reduced, and in the event of any increase thereof, all references to “Annual Base Salary” as used in this Agreement shall refer to such increased amount.

(ii) Bonuses . The Company shall establish a performance-based bonus plan (the “ Plan ”) to be applicable for each fiscal year of the Company (a “ Fiscal Year ”) ending during the Employment Period pursuant to which Executive will be eligible to receive an annual bonus (the “ Bonus ”) with respect to each Fiscal Year of the Company ending during the Employment Period (each, a “ Bonus Year ”). The Board or the Compensation Committee of the Board (the “ Compensation Committee ”) will administer the Plan and shall establish performance objectives for each Fiscal Year, which performance objectives shall be reasonably related to the Company’s business objectives. In the event that, with respect to the applicable Fiscal Year of the Company ending during the Employment Period, the Company achieves the pre-established target performance goals based on actual performance, Executive shall be entitled to receive a Bonus in an amount equal to 100% of Executive’s Annual Base Salary (“ Target Bonus ”), (and in the event the Board or the Compensation Committee increase Executive’s Target Bonus after the Effective Date, all references to “Target Bonus” as used in this Agreement shall refer to such increased amount). Subject to Section 4, Executive will be entitled to receive the Bonus only upon the Company’s achievement of the specified performance objectives and if Executive is employed on the last day of the applicable Bonus Year. The Bonus shall become payable on March 15 of the year following the end of the applicable Bonus Year, provided that the Board or Compensation Committee finally determines (x) that the Company has achieved the applicable performance objectives and (y) the amount of the bonus that shall be paid to each executive entitled to receive a bonus for the applicable Bonus Year. If the Board or Compensation Committee has not made such final determination by March 15 of such year, the Bonus (if any) shall instead be paid as soon as practicable thereafter during such year.

(iii) Benefits . During the Employment Period, Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other senior executives of the Company and shall be eligible for participation in, and shall receive all benefits under, welfare benefit plans, practices, policies and programs provided by the Company to the extent applicable generally to other senior executives

 

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of the Company (“ Benefit Plans ”). The benefits provided to Executive shall be, in the aggregate, comparable to those benefits that Executive was receiving at the Company immediately prior to the Effective Date, but excluding those benefits under any nonqualified deferred compensation plans that are being amended or terminated in connection with the Transaction or that relate to or provide benefits or compensation measured with respect to the Company’s common stock.

(iv) Expenses . During the term of Executive’s employment, Executive shall be entitled to receive reimbursement for all reasonable business expenses incurred by Executive in performance of his duties hereunder, provided that Executive provides all necessary documentation in accordance with Company policy.

(v) Stock Options . Concurrent with the closing of the Transaction, the Company shall cause the Parent to grant Executive a stock option (the “ Option Grant ”) to purchase 600,000 shares of Common Stock, at an exercise price of $10.00 per share. The Option Grant will be pursuant and subject to the terms and conditions set forth in the Parent’s 2007 Stock Incentive Plan (the “ Stock Incentive Plan ”) and Executive’s option agreement associated with the Option Grant (the “ Option Agreement ”, which is attached hereto as Appendix A), and Executive’s purchase of the Purchased Shares as provided in Section 2(c)(vii) below.

(vi) Restricted Stock . Concurrent with the closing of the Transaction, the Company shall cause the Parent to grant Executive a grant (the “ Restricted Stock Grant ”) of restricted shares of Common Stock (“ Restricted Shares ”). The Restricted Stock Grant will be pursuant and subject to the terms and conditions set forth in the Stock Incentive Plan and the restricted stock agreement evidencing such grant (the “ Restricted Stock Agreement ”, which is attached hereto as Appendix B). The Restricted Stock Grant will be comprised of 100,000 Restricted Shares and shall be subject to the vesting, termination and other terms set forth in the Restricted Stock Agreement.

(vii) Investment . Concurrent with the closing of the Transaction, Executive shall purchase 160,000 shares of Common Stock, at a price of $10.00 per share (the “ Purchased Shares ”). The Purchased Shares shall be subject to the terms of the Stock Incentive Plan and Executive’s Subscription Agreement (attached hereto as Appendix C) and Executive’s Contribution Agreement (attached hereto as Appendix D). All of the Purchased Shares will be fully vested at the Effective Date.

(viii) Management Investor Rights Agreement . All Purchased Shares, shares purchased pursuant to the Restricted Shares, the Option Grant and Common Stock held by Executive pursuant to the vesting of Restricted Shares and the exercise of the Option Grant will be subject to the terms and conditions of the Management Investor Rights Agreement by and among the Parent, Executive, and other signatories thereto (the “ Management Investor Rights Agreement ”), including the restrictive covenants contained in Annex I to Section 8 thereof. The Option Agreement, Stock Incentive Plan, Restricted Stock Agreement, Management Investor Rights Agreement, Subscription Agreement and any other stock or stock-based award agreement entered into by and between the Company and Executive after the date hereof, collectively, the “ Equity Documents ”.

 

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Section 3. Termination of Employment .

(a) Death or Disability . Executive’s employment hereunder shall terminate automatically upon Executive’s death. If Executive becomes subject to a Disability during the Employment Period (pursuant to the definition of Disability set forth below), the Company may give Executive written notice in accordance with Sections 3(e) and 9(h) of its intention to terminate Executive’s employment. For purposes of this Agreement, “ Disability ” means (i) Executive’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) Executive is, by reason of any medically determinable physical of mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Company. Whether Executive has incurred a “Disability” shall be determined by a physician selected by the Company or its insurers.

(b) Cause . Executive’s employment may be terminated at any time by the Company for Cause. For purposes of this Agreement, “ Cause ” shall mean (i) Executive’s willful failure to substantially perform his duties as an employee of the Company or any subsidiary (other than any such failure resulting from incapacity due to physical or mental illness), (ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Company or any subsidiary, (iii) Executive’s conviction of, or plea of guilty or nolo contendere to a charge of commission of, a felony or crime involving moral turpitude, (iv) Executive’s indictment for a charge of commission of a felony or any crime involving moral turpitude, provided that the Board determines in good faith that such indictment would result in a material adverse impact to the business or reputation of the Company, (v) Executive’s gross negligence in the performance of his duties, or (vi) Executive purposefully or negligently makes (or has been found to have made) a false certification to the Company pertaining to its financial statements; a termination will not be for “Cause” pursuant to clause (i), (ii) or (v), to the extent such conduct is curable, unless the Company shall have notified Executive in writing describing such conduct and Executive shall have failed to cure such conduct within ten (10) business days after his receipt of such written notice.

(c) Termination Without Cause . The Company may terminate Executive’s employment hereunder without Cause at any time.

(d) Good Reason . Executive’s employment may be terminated at any time by Executive for Good Reason or without Good Reason upon 90 days’ prior written notice, provided, in the case of a termination for Good Reason, that Executive provides such notice within 60 days after the occurrence of the event giving rise to the termination for Good Reason. For purposes of this Agreement, “ Good Reason ” means voluntary resignation after any of the following actions taken by the Company or any of its subsidiaries without Executive’s consent: (i) a material reduction of Executive’s duties and responsibilities to the Company, (ii) a reduction in Executive’s Annual Base Salary or Target Bonus (not including any diminution related to a broader compensation reduction that (A) is made in consultation with the Reporting Person and (B) is applied to all senior executives of the Company in a relatively proportionate manner); (iii) the relocation of

 

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Executive’s primary office to a location more than 30 miles from the prior location; (iv) delivery of notice of non-renewal of the Employment Period by the Company (other than non-renewal by the Company due to Executive’s Disability, termination for Cause or termination by Executive); or (v) a material breach by the Company of a material provision of this Agreement (which for the avoidance of doubt includes Section 2(a) of this Agreement, but which would not include any promotion or lateral assignment); a termination shall not be for “Good Reason” pursuant to clause (i), (ii), or (iii), unless Executive shall have given written notice of his intention to resign for Good Reason and the Company shall have failed to cure the event giving rise to Good Reason within ten (10 ) business days after the Company’s receipt of such written notice.

(e) Notice of Termination . Any termination by the Company for Cause or without Cause, or by Executive for Good Reason or without Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 9(h). For purposes of this Agreement, a “ Notice of Termination ” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date. The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company hereunder or preclude Executive or the Company from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder.

(f) Date of Termination . “ Date of Termination ” means (i) if Executive’s employment is terminated by the Company for Cause, without Cause or by reason of Disability, or by Executive for Good Reason or without Good Reason, the date of receipt of the Notice of Termination (in the case of a termination with or without Good Reason, provided such notice is in accordance with Section 3(d)) or any later date specified therein pursuant to Section 3(e), as the case may be and (ii) if Executive’s employment is terminated by reason of death, the date of death.

Section 4. Obligations of the Company upon Termination .

(a) With Good Reason; Without Cause . If during the Employment Period, the Company shall terminate Executive’s employment without Cause or Executive shall terminate his employment for Good Reason, then the Company will provide Executive with the following severance payments and/or benefits:

(i) Prior to the thirtieth day following the Date of Termination, the Company shall pay to Executive in a lump sum, to the extent not previously paid, (i) the Annual Base Salary through the Date of Termination, and (ii) the Bonus earned for any Bonus Year ended prior to the year in which the Date of Termination occurs, provided that Executive was employed on the last day of such Bonus Year (the “ Accrued Obligations ”); and

(ii) The Company will pay Executive an aggregate sum of (x) 200%, in the event any such termination occurs prior to the first anniversary of the Effective Date, or within twelve months after any Change in Control (as such term is defined in the Stock Incentive Plan) that occurs subsequent to the Effective Date (any such period described in this clause (x), a “Protected Period”), or (y) 100% in the event any such termination occurs at any time other than during a Protected Period, of Executive’s Annual Base Salary and Target Bonus (such amount, the “ Cash Severance ”) as

 

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follows: (i) one-half of the Cash Severance shall be payable to Executive in a lump sum, within 30 business days of the Date of Termination and (ii) the remaining one-half of the Cash Severance will be payable to Executive in twelve (12) equal monthly installments commencing as of the first day of the calendar month following the month in which the Date of Termination occurs; and

(iii) From the period beginning on the Date of Termination through the earlier to occur of (x) the second anniversary of the Date of Termination and (y) the date Executive becomes eligible to participate in another employer’s medical and dental benefit plans, as applicable (the “New Employer Plan”), Executive shall be entitled to participate in the same medical and dental benefit plans maintained by the Company for its active employees, on the same terms (including employee-paid portions of insurance premiums and co-pays) as such active employees, all as in effect from time to time during such period; provided, however, that Executive acknowledges and agrees that such benefit continuation coverage shall run concurrently with the benefit continuation coverage to which Executive would be entitled to elect to receive under the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”); and provided, further, however, that, if applicable, Executive shall be required to notify the Company of the date on which Executive shall become eligible to participate in any New Employer Plan promptly after Executive being advised of such date by such other employer.

Notwithstanding the foregoing provisions of this Section 4(a), to the extent required in order to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), amounts to be paid under this Section 4(a) shall be paid to Executive on the first business day after the date that is six months following Executive’s “separation from service” within the meaning of Section 409A of the Code.

(b) Death or Disability . If Executive’s employment shall be terminated by reason of Executive’s death or Disability, then the Company will provide Executive (or his estate or legal representative) with the following severance payments and/or benefits: (A) the Accrued Obligations; (B) a lump sum equal to 100% of Executive’s Annual Base Salary; and (C) the Welfare Benefits. Notwithstanding the foregoing provisions of this Section 4(b), to the extent required in order to comply with Section 409A of Code, amounts to be paid under this Section 4(b) shall be paid to Executive on the first business day after the date that is six months following Executive’s “separation from service” within the meaning of Section 409A of the Code. Thereafter, the Company shall have no further obligation to Executive or his legal representatives, other than any rights to vested benefits under any Benefit Plans, indemnification rights he may have under this Agreement and any rights he may have under the Equity Documents.

(c) Cause; Other than for Good Reason . If Executive’s employment shall be terminated by the Company for Cause or by Executive without Good Reason, then the Company shall have no further payment obligations to Executive other than the Accrued Obligations. Thereafter, the Company shall have no further obligation to Executive or his legal representatives, other than any rights to vested benefits under any Benefit Plans, indemnification rights he may have under this Agreement, and any rights he may have under the Equity Documents.

(d) General Release . The Company’s obligations to make payments under Sections 4(a) and in the case of Disability under Section 4(b) are conditioned on Executive’s or his legal representative’s (as applicable) executing a general release of claims against the Company and its subsidiaries and affiliates and their successors and assigns (and the officers and directors of such entities) substantially in the form attached hereto as Exhibit A (the “ Release ”). For the avoidance of doubt, the Company’s obligations under Section 8 of this Agreement, the Benefit Plans, and the Equity Documents shall not be subject to Executive’s execution of the Release nor to Executive’s obligations under Section 5 of this Agreement, unless otherwise specifically provided in such other arrangements.

Section 5. Restrictive Covenants . Executive shall be subject to the restrictive covenants set forth in Annex I to Section 8 of the Management Investor Rights Agreement in accordance with its terms.

Section 6. Severance Payments. In addition to the foregoing, and not in any way in limitation of any right or remedy otherwise available to the Company, if the Board reasonably

 

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and in good faith believes Executive has violated or is in violation of any provision of Annex I of the Management Investor Rights Agreement, the Board may unilaterally suspend Executive’s right to receive any Cash Severance then or thereafter due from the Company to Executive, provided that the Board (a) gives Executive advance written notice of such suspension and (b) initiates an action or claim to enforce the Company’s rights in respect of such restrictive covenants promptly after such suspension. In the event that the Company prevails on such action or claim, Executive’s right to receive, and the Company’s obligation to pay, any additional Cash Severance, including any previously suspended amounts, shall be terminated immediately, and Executive shall have no further rights to Cash Severance. In the event that Executive prevails on such action or claim, the Company shall be required to pay to Executive in a lump sum within thirty (30) days of such adjudication (or, to the extent required in order to comply with Section 409A of the Code on the first business day after the date that is six months following Executive’s “separation from service” within the meaning of Section 409A of the Code) any Cash Severance the payment of which was delayed due to such suspension, plus interest for any period during which the payment of the Cash Severance was suspended at the prime rate, as published in the Wall Street Journal on the date of such suspension, and to commence payment of future installments of Cash Severance in accordance with Section 4(a)(ii).

Section 7. Executive’s Representations, Warranties and Covenants .

(a) Executive hereby represents and warrants to the Company and its subsidiaries that:

(1) Executive has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by Executive;

(2) the execution, delivery and performance of this Agreement by Executive does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Executive is a party or any judgment, order or decree to which Executive is subject;

(3) Executive is not a party to or bound by any employment agreement, consulting agreement, non-compete agreement, fee for services agreement, confidentiality agreement or similar agreement with any other Person other than the Company;

(4) upon the execution and delivery of this Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of Executive, enforceable in accordance with its terms;

(5) Executive understands that Parent and the Company will rely upon the accuracy and truth of the representations and warranties of Executive set forth herein and Executive consents to such reliance; and

(6) as of the date of execution of this Agreement, Executive is not in breach of any of its terms, including having committed any acts that would form the basis for a Cause termination if such act had occurred after the Effective Date.

 

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(b) The Company and its subsidiaries hereby represent and warrant to Executive that:

(1) the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by the Company;

(2) the execution, delivery and performance of this Agreement by the Company does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which the Company is a party or any judgment, order or decree to which the Company is subject;

(3) upon the execution and delivery of this Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of the Company, enforceable in accordance with its terms; and

(4) the Company understands that Executive will rely upon the accuracy and truth of the representations and warranties of the Company set forth herein and the Company consents to such reliance.

Section 8. Indemnification .

The Company shall indemnify Executive to the maximum extent permitted under the General Corporate Law of Delaware for acts taken within the scope of his employment. To the extent that the Company obtains coverage under a director and officer indemnification policy, Executive will be entitled to such coverage on a basis that is no less favorable than the coverage provided to any other officer or director of the Company.

Section 9. General Provisions .

(a) Severability . It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable under any present or future law, and if the rights and obligations of any party under this Agreement will not be materially and adversely affected thereby, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction; furthermore, in lieu of such invalid or unenforceable provision there will be added automatically as a part of this Agreement, a legal, valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

(b) Entire Agreement . This Agreement and the Equity Documents embody the complete agreement and understanding among the parties hereto with respect to the subject

 

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matter hereof and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way (including, without limitation, any other employment, severance or change-in-control agreement or understanding). For the avoidance of doubt, Executive, the Company and the Subsidiaries acknowledge that any agreement between Executive and the Company or Cendant Corporation or any subsidiary or affiliate of any of the foregoing, entered into prior to the Effective Date, including without limitation, the Prior Agreement, shall be void ab initio as of immediately before the Effective Date.

(c) Counterparts . This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

(d) Successors and Assigns .

(i) This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(ii) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law, or otherwise.

(e) Governing Law . THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

(f) Enforcement .

(i) Arbitration . Except for the Company or its Affiliate’s right to obtain injunctive relief for violation of Section 5 of this Agreement or in Annex I to Section 8 of the Management Investor Rights Agreement, any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation, breach or

 

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enforcement which the parties are unable to resolve by mutual agreement, shall be settled by submission by either party of the controversy, claim or dispute to binding arbitration in New York (unless the parties agree in writing to a different location), before a single arbitrator in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association then in effect. In any such arbitration proceeding the parties agree to provide all discovery deemed necessary by the arbitrator. The decision and award made by the arbitrator shall be final, binding and conclusive on all parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof. Each party shall bear its or his costs and expenses in any such arbitration and one-half of the arbitrator’s fees and costs; provided , however , if Executive prevails on substantially all material claims, the Company shall reimburse Executive for all of his reasonable attorney’s fees and costs.

(ii) Remedies . All remedies hereunder are cumulative, are in addition to any other remedies provided for by law and may, to the extent permitted by law, be exercised concurrently or separately, and the exercise of any one remedy shall not be deemed to be an election of such remedy or to preclude the exercise of any other remedy.

(iii) Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

(g) Amendment and Waiver . The provisions of this Agreement may be amended and waived only with the prior written consent of the Company and Executive and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall be construed as a waiver of such provisions or affect the validity, binding effect or enforceability of this Agreement or any provision hereof.

(h) Notices . Any notice provided for in this Agreement must be in writing and must be either personally delivered, transmitted via telecopier, mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated or at such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given hereunder and received when delivered personally, when received if transmitted via telecopier, five days after deposit in the U.S. mail and one day after deposit for overnight delivery with a reputable overnight courier service.

 

If to the Company, to:
  Realogy Corporation
  c/o Apollo Management VI, L.P.
  9 West 57th Street
  New York, New York 10019
  Facsimile:   (212) 515-3288
  Attention:   Marc Becker

 

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with a copy (which shall not constitute notice) to:
  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 Executive, to:
  Executive’s home address most recently on file with the Company.
with a copy (which shall not constitute notice) to:
  Simpson Thacher & Bartlett LLP
  425 Lexington Avenue
  New York, NY 10017
  Attention:   Andrea K. Wahlquist, Esq.

(i) Withholding . The Company may withhold from any amounts payable or benefits to be provided to Executive under this Agreement or otherwise all Federal, state, city or other taxes and other amounts that the Company may reasonably determine are required to be withheld pursuant to any applicable law or regulation.

(j) Survival of Representations, Warranties and Agreements . All representations, warranties and agreements contained herein shall survive this Agreement and the Employment Period indefinitely.

(k) Effectiveness . Notwithstanding the foregoing, none of Parent, the Company or its subsidiaries shall have any obligations to Executive or his beneficiaries under this Agreement, in the event Executive is unable to perform his duties hereunder, including due to death or Disability or Executive commits an act that would constitute Cause, in each case prior to the closing of the Transaction, in which case this Agreement shall be of no force and effect. Further, this Agreement shall be null and void and of no further effect in the event that the Merger Agreement is terminated or the Effective Date does not occur.

(l) Descriptive Headings . The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. All references to a “Section” in this Agreement are to a section of the Agreement unless otherwise noted.

(m) Construction . Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party.

(n) Code Section 409A . Notwithstanding anything herein or elsewhere to the contrary, to the extent Executive or the Company notifies the other that this Agreement may

 

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result in Executive being subject to the penalties of Section 409A of the Code, Executive and the Company agree to negotiate (and the Company shall cause any affiliate to negotiate), in good faith alternatives to avoid such penalties.

 

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

 

REALOGY CORPORATION
By:  

/s/ David J. Weaving

Name:   David J. Weaving
Title:  

Executive Vice President and

Chief Administrative Officer

BRUCE G. ZIPF
Signature:  

/s/ Bruce G. Zipf


Exhibit A

Form of Release

THIS RELEASE (the “ Release ”) is entered into between Bruce G. Zipf (“ Executive ”) and Realogy Corporation, a Delaware corporation (“ Realogy ”), for the benefit of Realogy. The entering into and non-revocation of this Release is a condition to Executive’s right to receive the payments under Section 4 [(a)][(b)] of the employment agreement entered into by and between Executive and Realogy, dated as of April 10, 2007 (the “ Employment Agreement ”). Capitalized terms used and not defined herein shall have the meaning provided in the Employment Agreement.

Accordingly, Executive and Realogy agree as follows.

1. In consideration for the payments and other benefits provided to Executive by the Employment Agreement, to which Executive is not otherwise entitled, and the sufficiency of which Executive acknowledges, Executive represents and agrees, as follows:

(a) Executive, for himself, his heirs, administrators, representatives, executors, successors and assigns (collectively “ Releasers ”), hereby irrevocably and unconditionally releases, acquits and forever discharges and agrees not to sue Realogy or any of its parents, subsidiaries, divisions, affiliates and related entities and its current and former directors, officers, shareholders, trustees, employees, consultants, independent contractors, representatives, agents, servants, successors and assigns and all persons acting by, through or under or in concert with any of them (collectively “ Releasees ”), from all claims, rights and liabilities up to and including the date of this Release arising from or relating to Executive’s employment with, or termination of employment from, the Company, under the Employment Agreement and from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of actions, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected and any claims of wrongful discharge, breach of contract, implied contract, promissory estoppel, defamation, slander, libel, tortious conduct, employment discrimination or claims under any federal, state or local employment statute, law, order or ordinance, including any rights or claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq. (“ADEA”), or any other federal, state or municipal ordinance relating to discrimination in employment. Nothing contained herein shall restrict the parties’ rights to enforce the terms of this Release.

(b) To the maximum extent permitted by law, Executive agrees that he has not filed, nor will he ever file, a lawsuit asserting any claims which are released by this Release, or to accept any benefit from any lawsuit which might be filed by another person or government entity based in whole or in part on any event, act, or omission which is the subject of this Release.

(c) This Release specifically excludes Executive’s rights and Realogy’s obligations under Section 8 of the Employment Agreement, the Benefit Plans, and the Equity Documents. Executive’s entitlement to vested benefits under the Benefit Plans and the Equity Documents


shall be determined in accordance with the provisions of the Benefit Plans or Equity Documents, as the case may be. Nothing contained in this Release shall release Executive from his obligations, including any obligations to abide by restrictive covenants, under the Employment Agreement, the Equity Documents or the Benefit Plans that continue or are to be performed following termination of employment.

(d) Executive represents that he is not aware of any facts or circumstances that would give rise, based on his actions, to any claims or lawsuits against Realogy or any Releasee.

(e) The parties agree that this Release shall not affect the rights and responsibilities of the US Equal Employment Opportunity Commission (hereinafter “ EEOC ”) to enforce ADEA and other laws. In addition, the parties agree that this Release shall not be used to justify interfering with Executive’s protected right to file a charge or participate in an investigation or proceeding conducted by the EEOC. The parties further agree that Executive knowingly and voluntarily waives all rights or claims (that arose prior to Executive’s execution of this Release) the Releasers may have against the Releasees, or any of them, to receive any benefit or remedial relief (including, but not limited to, reinstatement, back pay, front pay, damages, attorneys’ fees, experts’ fees) as a consequence of any investigation or proceeding conducted by the EEOC.

2. Executive acknowledges that Realogy has specifically advised him of the right to seek the advice of an attorney concerning the terms and conditions of this Release. Executive further acknowledges that he has been furnished with a copy of this Release, and he has been afforded twenty-one (21) days in which to consider the terms and conditions set forth above prior to this Release. By executing this Release, Executive affirmatively states that he has had sufficient and reasonable time to review this Release and to consult with an attorney concerning his legal rights prior to the final execution of this Release. Executive further agrees that he has carefully read this Release and fully understands its terms. Executive understands that he may revoke this Release within seven (7) days after signing this Release. Revocation of this Release must be made in writing and must be received by Marc Becker at Apollo Management, L.P., 9 West 57th Street, 43rd Floor, New York, NY 10019 within the time period set forth above.

3. This Release will be governed by and construed in accordance with the laws of the state of Delaware, without giving effect to any choice of law or conflicting provision or rule (whether of the state of Delaware or any other jurisdiction) that would cause the laws of any jurisdiction other than the state of Delaware to be applied. In furtherance of the foregoing, the internal law of the state of Delaware will control the interpretation and construction of this agreement, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply. The provisions of this Release are severable, and if any part or portion of it is found to be unenforceable, the other paragraphs shall remain fully valid and enforceable. This Release shall become effective and enforceable on the eighth day following its execution by Executive, provided he does not exercise his right of revocation as described above. If Executive fails to sign and deliver this Release or revokes his signature, this Release will be without force or effect, and Executive shall not be entitled to the payment under Section 4 [(a)][(b)] of the Employment Agreement.

Exhibit 10.27

November 30, 2010

RCIV Holdings (Luxembourg) S.à.r.l.

c/o Apollo Management, L.P.

9 West 57th Street

43rd Floor

New York, New York 10019

Avenue Capital Management II, L.P.

399 Park Avenue, 6 th Floor

New York, New York 10022

Paulson & Co. Inc. (on behalf of the several investment funds and accounts managed by it)

1251 Ave of the Americas, 50 th Floor

New York, New York 10020

 

  Re: Support Agreement (this “Agreement”) regarding Realogy Corporation’s offers to exchange (the “Exchange Offers”) its 10.50% Senior Notes due 2014 (the “Existing Senior Cash Notes”), 11.00%/11.75% Senior Toggle Notes due 2014 (the “Existing Senior Toggle Notes”) and 12.375% Senior Subordinated Notes due 2015 (the “Existing Subordinated Notes” and, together with the Existing Senior Cash Notes and the Existing Senior Toggle Notes, the “Existing Notes”) for newly issued (1) 11.00% Series A Convertible Notes due 2018 (the “Series A Convertible Notes”), 11.00% Series B Convertible Notes due 2018 (the “Series B Convertible Notes”) and 11.00% Series C Convertible Notes due 2018 (the “Series C Convertible Notes” and, together with the Series A Convertible Notes and the Series B Convertible Notes, the “Convertible Notes”) and/or (2) 11.00% Senior Notes due 2017 (the “New 11.00% Senior Cash Notes”), 11.50% Senior Notes due 2017 (the “New 11.50% Senior Cash Notes”) and 12.875% Senior Subordinated Notes due 2018 (the “New Subordinated Notes,” together with the New 11.50% Senior Cash Notes, and the New 11.50% Senior Cash Notes, the “Extended Maturity Notes” and, together with the Convertible Notes, the “New Notes”) .

Ladies and Gentlemen:

1. Participation in the Exchange Offers .

This Agreement is to confirm that if, at or prior to midnight, New York City time, on December 6, 2010, Realogy Corporation, a Delaware corporation (the “Company”) and an indirect subsidiary of Domus Holdings Corp., a Delaware corporation (“Holdings” and, together with the Company, the “Company Parties”), commences the Exchange Offers, the undersigned holders of Existing Notes (each together with their respective affiliates and the several investment funds and accounts managed by them,


the “Noteholders”) will each as soon as practicable following such commencement tender into the Exchange Offers (i) the aggregate principal amount and series of Existing Notes set forth under such Noteholder’s name on the signature pages hereto (collectively, the “Initial Notes”) no later than the fifth business day following the commencement of the Exchange Offers and (ii) any Existing Notes acquired by such Noteholder from the date of this Agreement through the expiration of the Exchange Offers (collectively, the “After-Acquired Notes” and, together with the Initial Notes, the “Noteholders’ Notes”), in each case, in exchange for Convertible Notes and/or Extended Maturity Notes in such proportion as set forth under such Noteholder’s name on the signature pages hereto, plus accrued and unpaid interest paid in cash on such Noteholder’s Notes, substantially in accordance with the applicable procedures and upon the terms and conditions set forth in the term sheet attached as Exhibit A hereto (the “Term Sheet”) and to be set forth in the definitive offering memorandum relating to the Exchange Offers (such definitive offering memorandum, as it may be amended or supplemented from time to time, the “Offering Memorandum”).

2. Conditions .

(a) Each Noteholder’s obligations under Section 1 of this Agreement shall be subject to the satisfaction or fulfillment of the Tender Conditions (as defined in the Term Sheet).

(b) The consummation of the Exchange Offers shall be subject to the satisfaction of the conditions to be set forth in the Offering Memorandum, including the fulfillment of the Exchange Conditions (as defined in the Term Sheet). The Company may waive or amend any of the conditions to the consummation of the Exchange Offers, including the Exchange Conditions, or make any modification to the terms of the Exchange Offers (including the terms of the New Notes) in its sole discretion, provided that any such waiver or modification will not adversely affect any Noteholder’s holdings of New Notes without such Noteholder’s prior written consent. In addition, the Company may make any of the modifications to the terms of the Exchange Offers (including the terms of the New Notes) set forth on Schedule II of the Term Sheet and any such modification shall not be deemed to adversely affect any Noteholder’s holdings of New Notes.

 

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(c) The Company shall withdraw the Exchange Offers in the event that on any day while the Exchange Offers are outstanding, any of the Tender Conditions would no longer be able to be satisfied (and not susceptible to cure or redress using commercially reasonable efforts) or waived by the Company in accordance with this Agreement and the Term Sheet (except as a result of the failure of the Noteholders to fulfill their obligations under this Agreement and the Term Sheet).

(d) The Company shall have furnished to the Noteholder on the fifth business day following the commencement of the Exchange Offers and on the closing date of the Exchange Offers, a certificate of the Company, signed by an executive officer of the Company and dated as of each respective date, to the effect that the representations and warranties of the Company Parties in this Agreement are true and correct in all material respects on and as of each respective date (except for representations and warranties made as of a specified date, which shall be true and correct only as of the specified date), with the same effect as if made on such dates.

3. Representations and Warranties of the Company Parties . The Company Parties represent and warrant as follows:

(a) Each of the Company Parties is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.

(b) The Company Parties have the power and authority to execute and deliver this Agreement and to perform its obligations hereunder and have taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement.

(c) This Agreement has been duly executed and delivered by the Company Parties. This Agreement is the legal, valid and binding obligation of the Company Parties, enforceable against the Company Parties in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally and is in full force and effect.

(d) The Company is a wholly-owned indirect Subsidiary (as defined below) of Holdings. “Subsidiary” means, with respect to any person, any corporation, partnership, joint venture or other legal

 

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entity of which such person (either alone or through or together with any other subsidiary), (1) owns, directly or indirectly, more than fifty percent (50%) of the stock or other equity interests, (2) has the power to elect a majority of the board of directors or similar governing body or (3) has the power to direct the business and policies.

(e) Neither the execution and delivery by the Company or Holdings of this Agreement, the compliance by the Company or Holdings with the terms and conditions hereof, nor the consummation by the Company or Holdings of the transactions contemplated hereby and by the Term Sheet (the “Transactions”) will (1) violate, result in a breach of, or constitute a default under their respective certificates of incorporation or bylaws, or the respective organization documents of their Subsidiaries (2) violate, result in a breach of, or constitute a default under (with or without notice or lapse of time, or both) any contract, judgment, order or decree to which the Company or Holdings or any of their respective Subsidiaries is a party or is otherwise bound or give to others any rights or interests (including rights of purchase, termination, cancellation or acceleration) under any such agreement or instrument or (3) conflict with or violate any applicable laws, statutes, rules, regulations, ordinances judgments or orders (whether federal, state, local or foreign), except in the case of clauses (2) and (3) as could not reasonably be expected to materially adversely affect the Company or Holdings.

(f) As of the date of this Agreement, Holdings has 200,430,906 shares of common stock, $0.01 par value per share, issued and outstanding, all of which were validly issued, fully paid and non-assessable.

(g) The Company and each of its Subsidiaries has filed or furnished, as applicable, all forms, filings, registrations, submissions, statements, certifications, reports and documents required to be filed or furnished by it with the U.S. Securities and Exchange Commission (the “SEC”) under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) or the U.S. Securities Act of 1933, as amended (the “Securities Act”) (collectively, “SEC Filings”) since December 31, 2008 (the SEC Filings since December 31, 2008 and through the date hereof, including any amendments thereto, the “Company Reports”). As of their respective dates (or, if amended prior to the date hereof, as of the date of such

 

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amendment), each of the Company Reports, as amended, complied as to form in all material respects with the applicable requirements of the Exchange Act and the Securities Act, and any rules and regulations promulgated thereunder applicable to the Company Reports. As of their respective dates (or, if amended prior to the date hereof, as of the date of such amendment) and to the actual knowledge of the Company, the Company Reports did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading.

(h) The Company’s consolidated financial statements (including, in each case, any notes thereto) contained in the Company Reports were prepared (1) in accordance with generally accepted accounting principles in the United States of America (“GAAP”) applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto or, in the case of interim consolidated financial statements, where information and footnotes contained in such financial statements are not required under the rules of the SEC to be in compliance with GAAP) and (2) in compliance as to form, as of their respective dates of filing with the SEC, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, and in each case such consolidated financial statements fairly presented, in all material respects, the consolidated financial position, results of operations, changes in stockholder’s equity and cash flows of the Company and its consolidated Subsidiaries as of the respective dates thereof and for the respective periods covered thereby (subject, in the case of unaudited statements, to normal year-end adjustments which were not, individually or in the aggregate, material to the Company and its consolidated Subsidiaries taken as a whole).

(i) Neither Company Party nor any of their respective Subsidiaries has, within the three years prior to the date hereof, taken any steps to seek protection pursuant to any bankruptcy law, nor does either Company Party or any of their respective Subsidiaries have any actual knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact that would reasonably lead a creditor to do so. Neither Company Party nor any of their respective

 

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Subsidiaries is, or will be as a result of the consummation of the Transactions, Insolvent (as defined below). Neither Holdings nor Domus Intermediate Holdings Corp. have any assets or liabilities other than those arising under this Agreement or relating or incidental to the direct or indirect ownership of the capital stock of the Company. “Insolvent” means, with respect to any person, (1) that such person’s financial condition is such that the sum of such Person’s Indebtedness (as defined below) is greater than all of such person’s property at a fair valuation, (2) that such person intended to incur, or believed that it would incur, Indebtedness that would be beyond such person’s ability to pay or refinance as such Indebtedness matured or (3) that such person was engaged in a business or a transaction, or was about to engage in business or a transaction, for which any property remaining with such Person was an unreasonably small capital.

(j) Neither Company Parties nor any of their respective Subsidiaries are in default and no event has occurred or exists that, with notice or lapse of time or both, would constitute such an event of default, in each case with respect to any Indebtedness having an outstanding aggregate principal amount in excess of $100 million. “Indebtedness” means, as to any person at any date, without duplication, (1) all indebtedness of such person for borrowed money, (2) all obligations of such person for the deferred purchase price of any property or services (other than trade payables incurred in the ordinary course of such person’s business), (3) all obligations of such person evidenced by notes, bonds, debentures or other similar instruments, (4) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to any property acquired by such person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (5) all capital lease obligations of such person, (6) all obligations of such person, contingent or otherwise, as an account party or applicant under acceptance, letter of credit, surety bond or similar facilities, (7) all guaranteed obligations of such person in respect of obligations of the kind referred to in clauses (1) through (6) above and (8) all obligations of the kind referred to in clauses (1) through (7) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any lien, security interest or encumbrance on any property owned by such

 

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person, whether or not such person has assumed or become liable for the payment of such obligation. The Indebtedness of any person shall include, without duplication, the Indebtedness of any other person to the extent such person is liable therefor.

(k) Since September 30, 2010, there has been no Material Adverse Effect (as defined in the Term Sheet).

(l) The issuance of the New Notes has been duly authorized by the Company Parties and upon issuance and the exchange for the Existing Notes, the New Notes shall be a legal, valid and binding obligation of the Company Parties, enforceable against the Company Parties in accordance with their respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally. Upon conversion in accordance with the terms of the Convertible Notes, the shares of Class A common stock, par value $0.01 per share, of Holdings (the “Common Stock”) when issuable upon conversion of the Convertible Notes (the “Conversion Shares”) will be validly issued, fully paid and non-assessable.

(m) Assuming the truth and accuracy of the representations of each Noteholder set forth in Section 4(d) and the representations of the dealer managers set forth in the dealer manager agreement to be entered into in connection with the Exchange Offers, it is not necessary, in connection with the issuance and sale of the New Notes to the Noteholders, to register the New Notes under the Securities Act.

4. Representations and Warranties of the Noteholders . Each Noteholder severally represents and warrants to the Company Parties as follows:

(a) The Noteholder has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder.

(b) This Agreement has been duly executed and delivered by the Noteholder. This Agreement is the legal, valid and binding obligation of the Noteholder, enforceable against the Noteholder in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally and is in full force and effect.

 

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(c) The Noteholder beneficially owns the aggregate principal amount of the Existing Notes set forth under such Noteholder’s name on the signature pages hereto, which represent all the Existing Notes held by the Noteholder as of the date of this Agreement, and will beneficially own any After-Acquired Notes, in each case, free and clear of any pledge, security interest, claim, lien or other encumbrance of any kind. There are no contracts or other agreements between or among the Noteholder and any other person that would conflict with, restrict or prohibit the Noteholder’s ability to fulfill its obligations under this Agreement.

(d) The Noteholder is (1) a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or (2) an institutional “accredited investor” (within the meaning of Rule 501 (a)(1), (2), (3) or (7) of Regulation D under the Securities Act).

(e) The Noteholder acknowledges that it has had the opportunity to speak with a representative of the Company Parties and to obtain and review information reasonably requested by the Noteholder from the Company Parties.

(f) The Noteholder understands that (1) the exchange of its Existing Notes for New Notes is a speculative investment involving a high degree of risk, (2) no representation is being made as to the business, financial position, results of operations or prospects of the Company or the future value of the New Notes, (3) the economic benefits that may be derived from the New Notes are uncertain and (4) the total amount of the Noteholder’s investment could be lost.

(g) The Noteholder understands that the New Notes have not been registered under the Securities Act or any state securities laws and that the New Notes are being offered and sold to it in reliance on specific exemptions from the registration requirements of the Securities Act and state securities laws and regulations and that the Company Parties are relying upon the truth and accuracy of, and the Noteholder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Noteholder set forth herein in order to determine the availability of such exemptions and the eligibility of the Noteholder to acquire the New Notes. The Noteholder understands that there is no established market for the New Notes and that no public market for the New Notes may

 

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develop. The Noteholder understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the New Notes or the fairness or suitability of the investment in the New Notes nor have such authorities passed upon or endorsed the merits of the Exchange Offers.

(h) The Noteholder is acquiring the New Notes for investment purposes only for the account of the Noteholder and not with a view toward a distribution thereof in violation of any federal or state securities laws.

(i) The Noteholder has conducted its own independent evaluation, made its own analysis and consulted with advisors as it has deemed necessary, prudent or advisable in order for the Noteholder to make its own determination and decision to enter into the transactions contemplated by this Agreement and to execute and deliver this Agreement. The Noteholder has adequate information to evaluate the transactions contemplated by this Agreement and has had the opportunity to discuss such information with its advisors. In entering into the transactions contemplated by this Agreement, the Noteholder is relying entirely upon such independent evaluation and analysis and consultation with its advisors and has not relied upon any oral or written representations and warranties of any kind or nature by any of the Company Parties or anyone affiliated with the Company Parties.

5. Covenants .

(a) Prior to the Termination Date (as defined below), each of the Company Parties agrees to take, or cause to be taken, all actions reasonably necessary to facilitate, encourage or otherwise support the Exchange Offers and the other transactions contemplated by the Term Sheet and as described in the Offering Memorandum, including, without limitation, disseminating or executing any definitive documentation necessary to implement the Offering Memorandum and the Term Sheet, substantially in accordance with the terms set forth in the Term Sheet.

(b) Each of the Company Parties and each Noteholder will, to the extent applicable, comply with the Regulatory Approval Covenant (as defined in the Term Sheet).

 

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(c) Prior to the Termination Date, each Noteholder will not withdraw or revoke any tender contemplated by this Agreement or the Term Sheet unless the Exchange Offers are terminated before its expiration or modified in a way that will adversely affect such Noteholder without such Noteholder’s prior written consent (in which case such Noteholder is permitted to withdraw its Existing Notes only to the extent that withdrawal rights are otherwise provided for in the Exchange Offers or the Term Sheet) or this Agreement is terminated in accordance with its terms.

(d) Prior to the Termination Date and subject to the terms and conditions of this Agreement and compliance by the Company Parties with this Agreement, each Noteholder agrees not to take, or cause to be taken, any action, directly or indirectly, opposing the Exchange Offers.

(e) Prior to the Termination Date, each Noteholder agrees that it will not, directly or indirectly, sell, assign, grant an option with respect to, transfer or otherwise dispose of any of such Noteholder’s Notes, in whole or in part (other than to its respective affiliates and the several investment funds and accounts managed by it); provided, however, that with the Company’s written consent, each of Paulson & Co. Inc. (“Paulson”) and Avenue Capital Management II, L.P. (“Avenue”) (each, a “Non-Apollo Noteholder”) may, directly or indirectly, sell, assign, grant an option with respect to, transfer or otherwise dispose of any of such Noteholder’s Notes. Any transferee (including any affiliates of the Noteholders and investments funds and accounts managed by them) receiving Noteholder’s Notes under this Section 5(e) must agree to be bound to the terms and conditions of this Agreement.

(f) Subject to the conditions set forth in this Section 5(f), each Noteholder consents to it being named in the Offering Memorandum and any related press release with respect to this Agreement and agrees that the Company shall not be prohibited from disclosing the aggregate principal amount of Existing Notes held by such Noteholder and the existence of this Agreement in the Offering Memorandum and any related press release. The Company Parties shall submit to each Noteholder or their legal counsel a draft of the Offering Memorandum and any press release or other similar public filing related to the entering into of this Agreement and the transactions contemplated hereby and allow each Noteholder and/or their legal counsel an opportunity to review the intended communication prior to

 

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its release and will consider in good faith modifications to the intended communication that are requested by such Noteholder and/or their legal counsel; provided, however, in no event shall the Company release any communication relating to any Noteholder to which such Noteholder reasonably objects. No Noteholder shall make any public announcements or otherwise communicate with any news media with respect to this Agreement or any of the transactions contemplated hereby, without prior written consent of the Company Parties. Notwithstanding the foregoing, any party may make or cause to be made any press release or similar public announcement or communication as may be required to comply with (i) the requirements of applicable law or (ii) following the public announcement of the Exchange Offers, its disclosure obligations or practices with respect to its investors. Each other support agreement with respect to tendering Existing Notes in the Exchange Offers shall provide that no party to such other support agreement may refer to a Noteholder or any of its affiliates in any press release or similar public announcement or communication without such Noteholder’s prior written consent.

(g) Prior to the consummation of the Exchange Offers, Paulson and Avenue and each of the Company Parties shall execute and deliver stockholders’ agreements with RCIV Holdings (Luxembourg) S.à.r.l. and RCIV Holdings, L.P. (Cayman) and their affiliates party thereto, in substantially the forms attached hereto as Schedules II and III, respectively.

(h) Prior to the consummation of the Exchange Offers, Holdings shall reserve from its duly authorized capital stock the appropriate number of shares of Common Stock to provide for the full conversion of the Convertible Notes.

6. Other Agreements . If at any time any other support agreement with respect to tendering Existing Notes in the Exchange Offers contains any covenant or agreement that is either not provided for in this Agreement, or is more favorable to the holder of Existing Notes executing such other support agreement as compared to covenants or agreements that are provided for in this Agreement (each, a “Most Favored Provision”), then Company shall promptly disclose each such Most Favored Provision to each Noteholder and such Noteholder shall have the option of receiving the benefits of each such Most Favored Provision. To the extent that such Noteholder elects to receive the benefits of each such Most Favored Provision,

 

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then each such Most Favored Provision shall be deemed to be automatically incorporated by reference into this Agreement, as if set forth fully herein and, notwithstanding anything to the contrary herein or therein, without any further action on the part of any of the parties hereto. If the support agreement containing the Most Favored Provision is subsequently terminated, or amended or modified to remove the Most Favored Provision or to otherwise adversely impact the Most Favored Provision, such amendment, modification or termination shall not amend, modify or terminate such provision in this Agreement.

7. Survival; Indemnification .

(a) All presentations and warranties contained in this Agreement shall not survive the consummation of the Exchange Offers.

(b) The Company Parties agree, jointly and severally, to indemnify and hold harmless each Non-Apollo Noteholder and its Subsidiaries, affiliates, affiliated funds, and funds advised by such Non-Apollo Noteholders and each of their officers, directors, partners, stockholders, members and employees to the fullest extent lawful, from and against any and all claims, damages, liabilities, deficiencies, judgments, fines, amounts paid in settlement and expenses (including reasonable attorneys’ fees and expenses) (collectively, “Losses”) arising out of or resulting from any action, suit, claim, or proceeding by any stockholder, investor or creditor of the Company Parties or any of their affiliates or Subsidiaries arising out of or resulting from the Exchange Offers and/or the other transactions contemplated by the Term Sheet (unless such claim is based upon conduct by such Non-Apollo Noteholder that constitutes fraud, gross negligence or willful misconduct).

(c) Any party seeking indemnification pursuant to Section 7.2(b) (the “Indemnified Person”) shall give prompt written notice to the party such Indemnified Person is seeking indemnification from hereunder (the “Indemnifying Person”) of any claim, action, suit or proceeding commenced against such Indemnified Person in respect of which indemnity may be sought hereunder, but failure to so notify the Indemnifying Person shall not relieve the Indemnifying Person from any liability which it may have under the indemnity provided in Section 7.2(b), unless and to the extent the Indemnifying Person shall have been actually and materially prejudiced by the failure of such Indemnified Person to so notify the

 

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Indemnifying Person. Such notice shall describe in reasonable detail such claim. In case any claim, action, suit or proceeding is brought against an Indemnified Person, the Indemnified Person shall be entitled to hire, at its own expense, separate counsel and participate in the defense thereof. If the Indemnifying Person so elects within a reasonable time after receipt of notice, the Indemnifying Person may assume the defense of the action or proceeding at the Indemnifying Person’s own expense with counsel chosen by the Indemnifying Person and approved by the Indemnified Person, which approval shall not be unreasonably withheld, and the Indemnified Person may participate in such defense at its own expense; provided, however, that the Indemnifying Person will not settle or compromise any claim, action, suit or proceeding, or consent to the entry of any judgment with respect to any such pending or threatened claim, action, suit or proceeding, without the written consent of the Indemnified Person unless such settlement, compromise or consent secures the full and unconditional release of the Indemnified Person from all liabilities arising out of such claim, action, suit or proceeding and requires nothing other than the payment of money by the Indemnifying Person and such settlement does not constitute or reflect an acknowledgement of wrong doing on the part of the Indemnified Person; provided, further, that if the defendants in any such claim, action, suit or proceeding include both the Indemnified Person and the Indemnifying Person and the Indemnified Person reasonably determines, based upon advice of legal counsel, that such claim, action, suit or proceeding involves a conflict of interest (other than one of a monetary nature) that would reasonably be expected to make it inappropriate for the same counsel to represent both the Indemnifying Person and the Indemnified Person, then the Indemnifying Person shall not be entitled to assume the defense of the Indemnified Person and the Indemnified Person shall be entitled to separate counsel at the Indemnifying Person’s expense, which counsel shall be chosen by the Indemnified Person and approved by the Indemnifying Person, which approval shall not be unreasonably withheld; and provided, further , that it is understood that the Indemnifying Person shall not be liable for the fees, charges and disbursements of more than one separate counsel for the Indemnified Persons. If the Indemnifying Person assumes the defense of any claim, action, suit or proceeding, all Indemnified Persons shall thereafter deliver to the Indemnifying Person copies of all notices and documents (including court papers) received

 

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by such Indemnified Persons relating to the claim, action, suit or proceeding, and each Indemnified Person shall cooperate in the defense or prosecution of such claim. Such cooperation shall include the retention and (upon the Indemnifying Person’s request) the provision to the Indemnifying Person of records and information that are reasonably available to the Indemnified Person and that are reasonably relevant to such claim, action, suit or proceeding, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. If the Indemnifying Person is not entitled to assume the defense of such claim, action, suit or proceeding as a result of the second proviso to the fourth sentence of this Section 7.2(c), the Indemnifying Person’s counsel shall be entitled to conduct the defense of the Indemnifying Person and the Indemnified Person’s counsel shall be entitled to conduct the defense of the Indemnified Person, it being understood that both such counsel will cooperate with each other, to the extent feasible in light of the conflict of interest or different available legal defenses, to conduct the defense of such action or proceeding as efficiently as possible. If the Indemnifying Person is not so entitled to assume the defense of such action or does not assume the defense, after having received the notice referred to in the first sentence of this Section 7.2(c), the Indemnifying Person will pay the reasonable fees and documented expenses of counsel for the Indemnified Person; in that event, however, the Indemnifying Person will not be liable for any settlement of any claim, action, suit or proceeding effected without the written consent of the Indemnifying Person, which may not be unreasonably withheld, delayed or conditioned. If the Indemnifying Person is entitled to assume, and assumes, the defense of an action or proceeding in accordance with this Section 7.2(c), the Indemnifying Person shall not be liable for any fees and expenses of counsel for the Indemnified Person incurred thereafter in connection with that action or proceeding except as set forth in the fourth sentence of this Section 7.2(c). Unless and until a final judgment is rendered that an Indemnified Person is not entitled to the costs of defense under the provisions of this Section 7.2(c), the Indemnifying Person shall reimburse, promptly as they are incurred, the Indemnified Person’s costs of defense. The Indemnifying Person’s obligation to indemnify the Indemnified Persons for Losses hereunder is irrespective of whether the Indemnified Person has itself made payments in respect of such Losses.

 

14


8. Representations and Warranties . The representations and warranties of each of the parties set forth in Section 3 and Section 4 of this Agreement shall be true and correct in all material respects as if made at and as of the date of any tender contemplated by this Agreement and the closing date of the Exchange Offers (except for representations and warranties made as of a specified date, which shall be true and correct only as of the specified date).

9. Termination of Agreement . Unless otherwise agreed to in writing by the parties hereto, the rights and obligations of the parties under this Agreement shall terminate upon the occurrence (the “Termination Date”) of a Termination Event (as such term is defined in the Term Sheet).

10. Notices . All notices, requests, consents and other communications hereunder to any party shall be deemed to be sufficient if contained in a written instrument delivered in person or sent by facsimile, electronic mail, nationally recognized overnight courier or first class registered or certified mail, return receipt requested, postage prepaid, addressed to such party at the address set forth below or such other address as may hereafter be designated in writing by such party to the other parties:

If to the Noteholders:

As specified on the signature pages hereto,

If to the Company Parties:

Realogy Corporation

One Campus Road

Parsippany, NJ 07054

Phone: (973) 407-4669

Attention: Marilyn J. Wasser, Esq.

Facsimile: (212) 857-3101

Electronic mail: marilyn.wasser@realogy.com

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Attention: Stacy J. Kanter, Esq.

Facsimile: 212-735-2000

Electronic mail: stacy.kanter@skadden.com

11. Assignments; Successors; No Third-Party Rights . No party may assign any of its rights under

 

15


this Agreement without the prior consent of the other parties. Subject to the preceding sentence, this Agreement is intended to bind and inure to the benefit of the parties hereto and their respective successors, assigns, heirs, executors, administrators and representatives. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and any Indemnified Person hereunder, and nothing expressed or referred to in this Agreement will be construed to give any person, other than the parties to this Agreement, any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement.

12. Amendments; Waivers . Any provision of this Agreement may be amended or waived, if, and only if, such amendment or waiver is in writing and signed by the Company Parties and each of the Noteholders party to this Agreement as of the date hereof. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

13. Fees and Expenses . The Company agrees that it shall pay the reasonable fees and documented expenses of Akin Gump Strauss Hauer & Feld LLP and Kleinberg, Kaplan, Wolff & Cohen, P.C. incurred in connection with this Agreement and the Exchange Offers, provided that such payments on account of fees and expenses, in each case, shall be limited to $225,000.

14. Choice of Laws; Submission to Jurisdiction; Waiver of Jury Trial . The validity of this Agreement, the construction, interpretation, and enforcement hereof, and the rights of the parties hereto with respect to all matters arising hereunder or related hereto shall be determined under, governed by, and construed and enforced in accordance with the internal laws of the State of New York without regard to conflicts of laws principles (but including and giving effect to Sections 5-1401 and 5-1402 of the New York General Obligations Law). Each party to this Agreement agrees that, in connection with any legal suit or proceeding arising with respect to this Agreement, it shall submit to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York or the applicable New York state court

 

16


located in New York County and agrees to venue in such courts. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

15. Specific Performance . Without limiting the rights of each party hereto to pursue all other legal and equitable rights available to such party for any other party’s failure to perform each of its obligations under this Agreement, it is understood and agreed by each of the parties that any breach of or threatened breach of this Agreement would give rise to irreparable harm for which money damages would not be an adequate remedy and, accordingly, the parties agree that, in addition to any other remedies, each non-breaching party shall be entitled to specific performance and injunctive or other equitable relief for any such breach or threatened breach.

16. Entire Agreement; Several Obligations . This Agreement (including the Term Sheet and all exhibits and schedules attached hereto and thereto) constitutes the entire agreement of the parties with respect to the subject matter of this Agreement, and supersedes all other prior negotiations, agreements and understandings, whether written or oral, among the parties with respect to the subject matter of this Agreement; provided, however, that any confidentiality agreement executed by any party hereto shall survive this Agreement and shall continue in full force and effect until terminated in accordance with its terms irrespective of the terms hereof. The parties acknowledge that the obligations of each Noteholder under this Agreement are several and not joint with the obligations of any other Noteholder, and no Noteholder shall be responsible in any way for the performance of the obligations of any other Noteholder under any agreement to be entered into in connection with the Exchange Offers (the “Transaction Documents”). Nothing contained herein or in any other Transaction Document, and no action taken by any Noteholder pursuant hereto or thereto, shall be deemed to constitute the Noteholders as a partnership, an association or joint venture of any kind, or create a presumption that the Noteholders are in any way acting other than in their individual capacities with respect to such obligations or the transactions contemplated by the Transaction Documents or any matters. The decision of each Noteholder to tender its

 

17


securities pursuant to the Transaction Documents has been made by such Noteholder independently of any other Noteholder. Each Noteholder acknowledges that no other Noteholder has acted as agent for such Noteholder in connection with such Noteholder making its investment hereunder and that no other Noteholder will be acting as agent of such Noteholder in connection with monitoring such Noteholder’s investment or enforcing its rights under the Transaction Documents. The Company and each Noteholder confirms that each Noteholder has independently participated with the Company in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Noteholder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Noteholder to be joined as an additional party in any proceeding for such purpose. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Noteholder, solely, and not between the Company and the Noteholders collectively and not between and among the Noteholders.

17. Severability . If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

18. Counterparts . This Agreement may be executed in any number of counterparts and by different parties and separate counterparts, each of which when so executed and delivered, shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by electronic means shall be effective as delivery of a manually executed counterpart of this Agreement.

[ Signature Pages to Follow ]

 

18


Very truly yours,
REALOGY CORPORATION
By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   EVP, CFO & Treasurer
DOMUS HOLDINGS CORP.
By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   EVP, CFO & Treasurer

 

[ Signature Page to Support Agreement ]


Acknowledged and Agreed:
RCIV HOLDINGS (LUXEMBOURG) S.À.R.L.
By:   /s/ Laurie Medley
Name:   Laurie Medley
Title:   Class A Manager

 

Notes    Principal amount
held as of the
date hereof
     Percentage
to be
tendered for
Convertible
Notes
    Percentage
to be
tendered for
Extended
Maturity
Notes
 

Existing Senior Cash Notes

   $ 482,928,000         100     0

Existing Senior Toggle Notes

   $ 269,241,220         100     0

Existing Subordinated Notes

   $ 586,021,000         100     0

Notice Address:

RCIV Holdings (Luxembourg) S.à.r.l.

c/o Apollo Management, L.P.

9 West 57th Street

43rd Floor New York, New York 10019

Attention: Marc Becker

 

[ Signature Page to Support Agreement ]


PAULSON & CO. INC. (ON BEHALF OF THE SEVERAL INVESTMENT FUNDS AND ACCOUNTS MANAGED BY IT)
By:   /s/ Stuart Merzer
Name:   Stuart Merzer
Title:   Authorized Signatory

 

Notes    Principal amount
held as of the
date hereof
     Percentage
to be
tendered for
Convertible
Notes
    Percentage
to be
tendered for
Extended
Maturity
Notes
 

Existing Senior Cash Notes

   $ 261,500,000         100     0

Existing Senior Toggle Notes

   $ 15,000,000         100     0

Existing Subordinated Notes

   $ 20,000,000         100     0

Notice Address:

Paulson & Co. Inc.

1251 Avenue of the Americas, 50th Floor

New York, NY 10020

Facsimile: (212) 351-5887

Attention: Alex Blades

with a copy (which shall not constitute notice) to:

Kleinberg, Kaplan, Wolff & Cohen, P.C.

551 Fifth Avenue, 18th Floor

New York, NY 10176

Facsimile: (212) 986-8866

Attention: Max Karpel, Esq.

                  Jonathan Ain, Esq.

 

[ Signature Page to Support Agreement ]


AVENUE CAPITAL MANAGEMENT II, L.P.
BY: AVENUE CAPITAL MANAGEMENT II GENPAR, L.P. (ON BEHALF OF FUNDS MANAGED BY IT)
By:   /s/ Marc Lasry
Name:   Marc Lasry
Title:   Managing Member

 

Notes    Principal amount
held as of the
date hereof
     Percentage
to be
tendered for
Convertible
Notes
    Percentage
to be
tendered for
Extended
Maturity
Notes
 

Existing Senior Cash Notes

   $ 255,177,000         25     75

Existing Senior Toggle Notes

   $ 58,153,752         0     100

Existing Subordinated Notes

   $ 0         0     0

Notice Address:

Avenue Capital Management II, L.P.

399 Park Avenue, 6 th Floor

New York, New York 10022

Attention: Jane Castle

                 Eric Ross

with a copy (which shall not constitute notice) to:

Akin Gump Strauss Hauer & Feld LLP

1333 New Hampshire Avenue NW

Washington, DC 20036-1511

Facsimile: (202) 955-7697

Attention: Michael S. Mandel, Esq.

 

[ Signature Page to Support Agreement ]


Exhibit A

Term Sheet


TERMS OF

EXCHANGE OFFERS AND CONSENT SOLICITATIONS

 

I.       Exchange Offers    Realogy Corporation (“Realogy” or the “Company”) intends to conduct exchange offers and consent
solicitations (collectively, the “Exchange Offers”), pursuant to which Realogy will offer, in reliance on
the exemption from the registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”), provided by Section 4(2) thereof, to all qualified holders of each series of its Existing
Notes (as defined below), the option to receive the consideration described below, in exchange for their
Existing Notes and consent to strip the covenants in the Existing Notes.
  

As described below, prior to launching the Exchange Offers, each of Apollo and the Strategic Partners (as such terms are defined below) will enter into the Lock-Up Agreement (as defined below) and, subject to the satisfaction of the Exchange Conditions (as defined below), agree to participate in the Exchange Offers and (i) in the case of Apollo and Paulson (as defined below) exchange all of their Existing Notes for 11.00% Series A Convertible Notes due 2018 (the “Series A Convertible Notes”), 11.00% Series B Convertible Notes due 2018 (the “Series B Convertible Notes”) and 11.00% Series C Convertible Notes due 2018 (the “Series C Convertible Notes” and, together with the Series A Convertible Notes and the Series B Convertible Notes, the “11.00% Convertible Notes”), subject to proration, and (ii) in the case of Avenue (as defined below), (a) exchange $64 million aggregate principal amount of Existing Notes for 11.00% Convertible Notes, subject to proration, and (b) exchange $250 million aggregate principal amount of Existing Notes for New 11.00% Senior Cash Notes, New 11.50% Senior Cash Notes and New Subordinated Notes (each as defined below), in each case on the terms described below.

 

On the settlement date of the Exchange Offers, counsel for Realogy will provide the Strategic Partners with a customary “no registration” opinion.

Exchange Offers Consideration

   For each $1,000 principal amount of Realogy’s 10.50% Senior Notes due 2014 (the “Existing Senior Cash Notes”) tendered in the offer for the Existing Senior Cash Notes, qualified holders may elect to receive:
  

•     $1,000 principal amount of new 11.00% Senior Notes due 2017 (the “New 11.50% Senior Cash Notes”); or

  

•     $1,000 principal amount of Series A Convertible Notes;

  

•     plus, in either case, accrued and unpaid interest, paid in cash on the first interest payment date for the New Notes (as defined below) and in accordance with the terms of the applicable

 

6


  

series of New Notes.

   For each $1,000 principal amount of Realogy’s 11.00%/11.75% Senior Toggle Notes due 2014 (the “Existing Senior Toggle Notes” and, together with the Existing Senior Cash Notes, the “Existing Senior Notes”) tendered in the offer for the Existing Senior Toggle Notes, qualified holders may elect to receive:
  

•     $1,000 principal amount of new 11.50% Senior Notes due 2017 (the “New 11.50% Senior Cash Notes” and, together with the New 11.00% Senior Cash Notes, the “New Senior Notes”); or

  

•     $1,000 principal amount of Series B Convertible Notes;

 

•     plus, in either case, accrued and unpaid interest, paid in cash on the first interest payment date for the New Notes and in accordance with the terms of the applicable series of New Notes.

   For each $1,000 principal amount of Realogy’s 12.375% Senior Subordinated Notes due 2015 (the “Existing Subordinated Notes” and, together with the Existing Senior Notes, the “Existing Notes”) tendered in the offer for the Existing Subordinated Notes, qualified holders may elect to receive:
  

•     $1,000 principal amount of new 12.875% Senior Subordinated Notes due 2018 (the “New Subordinated Notes” and, together with the New Senior Notes, the “Extended Maturity Notes” and, together with the 11.00% Convertible Notes, the “New Notes”); or

  

•     $1,000 principal amount of Series C Convertible Notes;

 

•     plus, in either case, accrued and unpaid interest, paid in cash on the first interest payment date for the New Notes and in accordance with the terms of the applicable series of New Notes.

 

7


    

The New Senior Notes will mature in April 2017, and the New Subordinated Notes and 11.00%
Convertible Notes will mature in April 2018.

 

The indentures for the New Senior Notes and the New Subordinated Notes will contain covenants that
are substantially similar in all material respects to the covenants included in the indentures for the
Existing Senior Notes and the Existing Subordinated Notes prior to the covenant strip. A schedule to the
Lock-Up Agreement will summarize the proposed material differences between the covenants to be
contained in the New Senior Notes and New Subordinated Notes and the covenants contained in the
Existing Notes; provided, that the Company may agree to make such other changes to the covenants in
connection with the Exchange Offers that are inconsistent with or not disclosed on such schedule so
long as such changes shall not materially adversely affect the Strategic Partners’ holdings in the New
Senior Notes and the New Subordinated Notes unless consented to by each of the Strategic Partners.

 

The New Senior Notes and the New Subordinated Notes will be redeemable on the same schedule as the
Existing Senior Notes and the Existing Subordinated Notes, respectively (e.g. the Existing Senior Notes
are redeemable beginning on April 15, 2011 and the New Senior Notes will be redeemable beginning on
April 15, 2011). The 11.00% Convertible Notes will not be redeemable, except upon a Qualified Public
Offering (as defined below) and thereafter as described in Annex A.

 

The New Notes will initially not be registered under the Securities Act and holders of the New Notes
will not be able to offer or sell such New Notes except pursuant to an exemption from or in a transaction
not subject to the registration requirements of the Securities Act.

  

Paulson and Apollo will agree to elect to receive 11.00% Convertible Notes in exchange for all of their Existing Notes, at the applicable rates described above, plus accrued and unpaid interest paid in cash on the first interest payment date for the 11.00% Convertible Notes and in accordance with the terms of the 11.00% Convertible Notes, as described in more detail below in the section entitled “Lock-Up Agreement.”

 

Avenue will agree to elect to receive 11.00% Convertible Notes, New Senior Notes and New Subordinated Notes in exchange for their Existing Notes, at the applicable rates and in the proportions described above, plus accrued and unpaid interest paid in cash on the first interest payment date for the New Notes and in accordance with the terms of the applicable series of New Notes, as described in more detail below in the section entitled “Lock-Up Agreement.”

Proration

   The maximum aggregate principal amount of Existing Notes that

 

8


    

may be tendered for 11.00% Convertible Notes (the “Convertible Notes Limit”) in the Exchange Offers
will be $2.2 billion. In the event that tendering holders (including Apollo and the Strategic Partners) of
Existing Notes elect to receive 11.00% Convertible Notes with respect to Existing Notes with an
aggregate principal amount in excess of the Convertible Notes Limit, the 11.00% Convertible Notes
consideration will be apportioned pro rata among all tendering holders (including Apollo and the
Strategic Partners) of Existing Notes, to the extent they elected to receive 11.00% Convertible Notes,
based on the principal amount of Existing Notes tendered for 11.00% Convertible Notes.

 

In the event of proration, holders (including Apollo and the Strategic Partners) that have elected to
receive 11.00% Convertible Notes will receive New 11.00% Senior Cash Notes, New 11.50% Senior
Cash Notes or New Subordinated Notes, as the case may be, for the portion of their tendered Existing
Notes for which they will not receive 11.00% Convertible Notes. In the event of proration, holders will
not have withdrawal rights beyond the rights provided below in “Withdrawal Rights.”

Minimum Condition

   The Exchange Offers will be conditioned upon the participation of at least $2.65 billion (the “Minimum Condition”) aggregate principal amount of Existing Notes (including Existing Notes owned by Apollo and the Strategic Partners).

Withdrawal Rights

   Holders will have withdrawal rights for the first 10 business days of the Exchange Offers.

Lock-Up Agreement

   Paulson & Co. Inc. on behalf of the several investment funds and accounts managed by it (“Paulson”) holds the aggregate principal amount of Existing Notes set forth next to its name in Schedule I (the “Paulson Notes”). Avenue Capital Management II, L.P. (together with its affiliated funds, “Avenue” and, together with Paulson, the “Strategic Partners”) holds the aggregate principal amount of Existing Notes set forth next to its name in Schedule I (the “Avenue Notes”). Apollo Global Management, LLC and its affiliates (collectively, “Apollo”) hold the aggregate principal amount of Existing Notes set forth next to their name in Schedule I (the “Apollo Notes”). The Strategic Partners and Apollo will enter into a lock-up agreement (the “Lock-up Agreement”) with Realogy, whereby Apollo and the Strategic Partners will agree, subject to proration, to tender, subject to the Tender Conditions (as defined below), as soon as practicable but no later than the fifth business day following the commencement of the Exchange Offers, (i) in the case of Paulson and Apollo, 100% of the Paulson Notes and Apollo Notes, respectively, and any additional Existing Notes acquired by them from the date of the Lock-Up Agreement through the closing of the Exchange Offers, in the Exchange Offers, for 11.00% Convertible Notes, subject to proration, at the applicable rates described above in “Exchange Offers Consideration,” plus accrued and unpaid interest

 

9


  

paid in cash on the first interest payment date for the 11.00% Convertible Notes and in accordance with the terms of the 11.00% Convertible Notes and (ii) in the case of Avenue, (a) $64 million aggregate principal amount of Existing Notes for 11.00% Convertible Notes, subject to proration, (b) $250 million aggregate principal amount of Existing Notes for New 11.00% Senior Cash Notes, New 11.50% Senior Cash Notes and New Subordinated Notes (as the case may be), and (c) any additional Existing Notes acquired by them from the date of the Lock-Up Agreement through the closing of the Exchange Offers for either, in their sole discretion, 11.00% Convertible Notes, subject to proration, New 11.00% Senior Cash Notes, New 11.50% Senior Cash Notes or New Subordinated Notes (as the case may be) plus accrued and unpaid interest paid in cash on the first interest payment date for the New Notes and in accordance with the terms of the applicable series of New Notes, in the Exchange Offers.

 

The Lock-Up Agreement will attach the form of Paulson Stockholders Agreement (as defined below) and the form of Avenue Stockholders Agreement (as defined below) to be executed in connection with the Exchange Offers.

 

The Lock-Up Agreement will terminate automatically upon the occurrence of the following events (each an “Automatic Termination Event”)

 

•      voluntary or involuntary bankruptcy proceedings have been initiated by or against Realogy or any of its direct or indirect parents or significant subsidiaries (within the meaning of Rule 1-02 under Regulation S-X) or the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Realogy or any of its direct or indirect parents or significant subsidiaries or for a substantial part of the property or assets of Realogy or any of its direct or indirect parents or significant subsidiaries; provided that in the case of involuntary bankruptcy proceedings initiated against Realogy or any of its direct or indirect parents or significant subsidiaries, such involuntary proceedings shall have continued without dismissal for at least 45 days; and provided further that Realogy shall, and Holdings will cause any of its direct or indirect significant subsidiaries that are subject to such involuntary proceedings to, seek and/or take any such actions available to move for dismissal of such involuntary proceedings as soon as practically possible;

 

•      the termination of the Exchange Offers or any court of competent jurisdiction or other competent governmental or regulatory authority issuing an order making illegal or otherwise restricting, preventing or prohibiting the Exchange Offers in a way that cannot be reasonably remedied by the Company within 45 days after the issuance of such order;

 

10


  

•      the Company, Apollo or any Strategic Partner has not received any regulatory approvals required for the closing of the Exchange Offers, including without limitation the approval of the Texas Department of Insurance, by February 28, 2011;

 

•      the express denial of any required material regulatory approval by the applicable regulatory agency, including without limitation the Texas Department of Insurance, which denial is final, non-appealable and not susceptible to cure or redress using commercially reasonable efforts and which cure or redress would not be “unreasonably burdensome” (as defined below);

 

•      the Exchange Offers shall have not commenced at least 20 business days (as defined in Rule 14d-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) prior to the Outside Date; and

 

•      the Exchange Offers shall not have closed by March 7, 2011 (the “Outside Date”).

 

Each of Apollo, Paulson and Avenue has the right to terminate the Lock-Up Agreement upon the occurrence of the following events (each a “Non-Automatic Termination Event” and, together with the Automatic Termination Events, the “Termination Events”):

 

•      any material default or event of default under the Existing Notes or other indebtedness of Realogy or its direct or indirect parents or significant subsidiaries having an aggregate principal amount outstanding in excess of $100 million, except any material event of default that can be cured, which the Company promptly cures within the applicable cure period under the Existing Notes or such other indebtedness or that the relevant lenders have waived;

 

•      Apollo or any Strategic Partner is no longer bound to, or otherwise defaults under the terms of the Lock-Up Agreement; and

 

•      the occurrence of any event or circumstance that would result in or has resulted in a Material Adverse Effect (as defined below).

 

“Material Adverse Effect” shall mean a material adverse effect, development, condition or occurrence on or with respect to the business, assets, liabilities, properties, results of operations or condition (financial or otherwise) of Holdings and its direct or indirect subsidiaries, taken as a whole; provided, however, that in no event shall any of the following constitute a Material Adverse Effect: (i) any occurrence, change, event or effect resulting from or relating to changes in general economic or financial market conditions, except in the event, and only to the extent, that such occurrence, condition, change, event or effect has had a disproportionate adverse effect on Holdings and its direct or indirect subsidiaries, taken as a

 

11


  

whole, as compared to other business entities engaged in the industries in which Holdings and its direct or indirect subsidiaries operate generally, (ii) any occurrence, condition, change, event or effect that affects the industries in which Holdings and its direct or indirect subsidiaries operate generally, except in the event, and only to the extent that such occurrence, condition, change, event or effect has had a disproportionate adverse effect on Holdings and its direct or indirect subsidiaries, taken as a whole, as compared to other business entities engaged in the industries in which Holdings and its direct or indirect subsidiaries operate generally, (iii) the outbreak or escalation of hostilities involving the United States, the declaration by the United States of war or the occurrence of any natural disasters and acts of terrorism, except in the event, and only to the extent that such occurrence, condition, change, event or effect has had a disproportionate adverse effect on Holdings and its direct or indirect subsidiaries, taken as a whole, as compared to other business entities engaged in the industries in which Holdings and its direct or indirect subsidiaries operate generally, (iv) any occurrence, condition, change, event or effect resulting from or relating to the announcement or pendency of the Exchange Offers and any other related transactions, (v) any change in generally accepted accounting principles, or in the interpretation thereof, as imposed on Holdings, its direct or indirect subsidiaries or their respective businesses or any change in law, or in the interpretation thereof, except in the event, and only to the extent that such occurrence, condition, change, event or effect has had a disproportionate adverse effect on Holdings and its direct or indirect subsidiaries, taken as a whole, as compared to other business entities engaged in the industries in which Holdings and its direct or indirect subsidiaries operate generally, (vi) any occurrence, condition, change, event or effect resulting from compliance by Holdings and its direct or indirect subsidiaries with the terms of the Lock-Up Agreement and each other agreement in connection therewith.

 

“Tender Conditions” shall include the following conditions to the Strategic Partners’ and Apollo’s obligations to tender their Existing Notes in the Exchange Offers:

 

•      the Lock-Up Agreement is in full force and effect and has not terminated as provided above;

 

•      absence of any injunctions, litigation or laws that would prohibit or prevent the closing of the Exchange Offers;

 

•      the truth and accuracy of the representations and warranties of Holdings and Realogy in all material respects on the date of the Lock-Up Agreement and the launch date of the Exchange Offers;

 

•      the absence of any facts or circumstances that would result in or have resulted in a Material Adverse Effect;

 

•      no Change of Control (as defined in the Existing Indentures), merger, consolidation, sale of all or substantially all of the

 

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assets or other reorganization of Realogy, Holdings or Intermediate shall have occurred;

 

•      no voluntary or involuntary bankruptcy proceedings have been initiated by or against Realogy or any of its direct or indirect parents or significant subsidiaries and no receiver, trustee, custodian, sequestrator, conservator or similar official for Realogy or any of its direct or indirect parents or significant subsidiaries or for a substantial part of the property or assets of Realogy or any of its direct or indirect parents or significant subsidiaries shall have been appointed;

 

•      no material default or event of default under the Existing Notes or other indebtedness of Realogy or its direct or indirect parents or significant subsidiaries having an aggregate principal amount outstanding in excess of $100 million, except any material event of default that can be cured, which the Company promptly cures within the applicable cure period under the Existing Notes or such other indebtedness or that the relevant lenders have waived;

 

•      no sale, transfer, conveyance or other disposition of any material assets of Holdings or the Company shall have occurred, other than to Holdings or an indirect or direct subsidiary of Holdings;

 

•      Paulson, Apollo and Holdings shall have entered into the Paulson Stockholders Agreement in the form attached to the Lock-Up Agreement;

 

•      Avenue, Apollo and Holdings shall have entered into the Avenue Stockholders Agreement in the form attached to the Lock-Up Agreement;

 

•      each of Apollo, Avenue and Paulson shall have tendered their Existing Notes in the Exchange Offers in accordance with the terms of the Lock-Up Agreement;

 

•      the Company and Holdings shall have used their commercially reasonable efforts to obtain or assist the Strategic Partners or other investors subject to agreements related to the Exchange Offers in obtaining any regulatory approvals required for the closing of Exchange Offers; and

 

•      the offering circular, consent solicitation, letters of transmittal and related documents used by the Company in the Exchange Offers shall be consistent with the terms of this term sheet and the Lock-Up Agreement (except as provided below in the second paragraph following this paragraph) and shall otherwise be reasonably satisfactory to the Strategic Partners in form and substance.

 

The Exchange Offers shall be conditioned (the “Exchange Conditions”) upon the following:

 

•      the satisfaction or fulfillment of the Tender Conditions, provided that if involuntary bankruptcy proceedings initiated against Realogy or any of its direct or indirect parents or

 

13


  

significant subsidiaries are dismissed within 45 days of the initiation of such involuntary proceedings, the related Tender Condition shall be deemed to be satisfied; provided that Realogy shall, and Holdings will cause any of its direct or indirect significant subsidiaries that are subject to such involuntary proceedings to, seek and/or take any such actions available to move for dismissal of such involuntary proceedings as soon as practically possible;

 

•      receipt of all material regulatory approvals, including from the Texas Department of Insurance;

 

•      performance by Holdings and Realogy of each of its covenants required to be performed prior to the closing of the Exchange Offers;

 

•      the Exchange Offers have not been determined to violate any applicable law or interpretation of the staff of the SEC;

 

•      the representations and warranties of Holdings and Realogy contained in the Lock-Up Agreement are true and accurate in all material respects as of the expiration date of the consent solicitations and the closing date of the Exchange Offers;

 

•      the Trustee shall not have objected in any respect to, or taken any action that would or could adversely affect the Exchange Offers or the consent solicitation.

 

•      absence of any event affecting the Company’s business which would prevent or restrict the closing of the Exchange Offers; and

 

•      absence of any adverse market condition.

 

Notwithstanding the foregoing, Realogy may waive the Exchange Conditions or make any modification to the terms of the Exchange Offers (including the terms of the New Notes) in its sole discretion, provided that any such waiver or modification will not adversely affect any Strategic Partner’s holdings of New Notes without its prior written consent. In addition, Realogy may make any of the modifications to the terms of the Exchange Offers (including the terms of the New Notes) set forth on Schedule II hereto and any such modification shall not be deemed to adversely affect any Strategic Partner’s holdings of New Notes.

 

Notwithstanding anything contained herein to the contrary, the Company shall withdraw the Exchange Offers in the event that on any day while the Exchange Offers are outstanding, any of the Tender Conditions would no longer be able to be satisfied (and not susceptible to cure or redress using commercially reasonable efforts) or waived by the Company in accordance with the Lock-Up Agreement (except as a result of the failure of the Strategic Partners to fulfill their obligations under the Lock-Up Agreement).

 

With the consent of each of the Strategic Partners in their sole discretion, any of the Exchange Conditions may be waived.

 

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The Lock-Up Agreement shall contain a “most favored nation” provision whereby the Strategic Partners will receive the benefit of any more favorable terms provided to Apollo or any other person participating in the Exchange Offers.

 

In addition, the Lock-Up Agreement shall provide for the indemnification of each Strategic Partner by the Company for losses resulting from any claims of its stockholders, investors or creditors arising from the transactions contemplated by the Lock-Up Agreement and/or the Exchange Offers.

 

In the event of proration, the Strategic Partners and Apollo will receive New 11.00% Senior Cash Notes, New 11.50% Senior Cash Notes or New Subordinated Notes, as the case may be, for the portion of their tendered Existing Notes for which they will not receive 11.00% Convertible Notes.

 

Apollo shall waive any fee it may be entitled to in connection with the Exchange Offers. Notwithstanding anything contained herein to the contrary, the foregoing provision may not be waived without the express written consent of each of the Strategic Partners.

 

Representations and Warranties

 

The Lock-Up Agreement will include customary representations and warranties of Holdings, Realogy, Apollo and each of the Strategic Partners.

 

Regulatory Approvals Covenant

 

Realogy shall use its reasonable efforts to obtain an exemption for Apollo and the Strategic Partners from the requirement to file a Form A Statement or other statement, notice petition or application with the Texas Department of Insurance in connection with the Exchange Offers; however the failure to obtain an exemption shall not limit Apollo or the Strategic Partners obligations under the Lock-Up Agreement.

 

Each of the Strategic Partners and Apollo will agree to use commercially reasonable efforts, at the Company’s sole cost and expense, to (i) cooperate with the filing of any statement, notice, petition or application by or on behalf of the Company, Apollo or any Strategic Partner in order to obtain any regulatory approvals in connection with the Exchange Offers, including any approvals required from or in connection with the Texas Department of Insurance, (ii) reasonably cooperate with the Company in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of the Company, Apollo or any Strategic Partner in connection with proceedings under or relating to such regulatory approvals; and (iii) to the extent legally permissible, provide the Company with

 

15


  

copies of all material communications from and filings with, any governmental authorities in connection with such regulatory approvals (the “Regulatory Approvals Covenant”).

 

Notwithstanding anything to the contrary contained herein, none of the Strategic Partners nor any of their affiliates shall be required to take any action, including any action required to comply with the terms and conditions of any regulatory approval that is or would be reasonably likely to be “unreasonably burdensome” on the Strategic Partners or any of their affiliates. For purposes of this term sheet, the following shall, by way of example and not limitation, be deemed “unreasonably burdensome”: (i) disclosing the identity of any investor in any investment funds or accounts managed by the Strategic Partners or their affiliates or any personal information regarding any shareholder, member, manager, partner or control person of the Strategic Partners or any of their affiliates (including, without limitation, any management entities), (ii) taking any action or forbearing from taking any action with respect to any assets, securities or other instruments whether now owned or hereafter acquired by the Strategic Partners, any of their affiliates or any investment funds or accounts managed by the Strategic Partners or any of their affiliates and (iii) any condition that would limit the Strategic Partners’ and/or their affiliates’ ability to conduct their respective businesses or their respective investment activities.

Additional Terms of 11.00% Convertible Notes, New Senior Notes and New Subordinated Notes

  

The 11.00% Convertible Notes will be convertible at any time at the option of the holders thereof, in whole or in part, into shares of Class A common stock of Domus Holdings Corp. (“Holdings”), par value $0.01 per share (“Class A Common Stock”), at conversion rates of (i) 975.6098 shares of Class A Common Stock per $1,000 aggregate principal amount of Series A Convertible Notes and Series B Convertible Notes and (ii) 926.7841 shares of Class A Common Stock per $1,000 aggregate principal amount of Series C Convertible Notes. See Annex A for the additional terms of the 11.00% Convertible Notes.

 

See Annex B for a summary of the terms of the New Senior Notes and the New Subordinated Notes.

II.     Capital Stock

   Immediately prior to the closing of the Exchange Offers, Holdings will amend and restate its charter and bylaws, which will provide, among other things, for the creation of the Class A Common Stock and Class B Common Stock (as defined below). All shares of common stock of Holdings outstanding immediately prior to the closing of the Exchange Offers will be reclassified into shares of Class B common stock of Holdings, par value of $0.01 per share (“Class B Common Stock” and, together with the Class A Common Stock, “Holdings Common Stock”). The Class A Common Stock and Class B Common Stock will vote together as a single class. The Class A Common Stock will have one vote per share. The Class B Common Stock will have five votes per share until Apollo all of the

 

16


   11.00% Convertible Notes it receives in the Exchange Offers into Class A Common Stock, at which time the Class B Common Stock will automatically convert into Class A Common Stock. In addition, sold or transferred shares of Class B Common Stock will automatically convert into shares of Class A Common Stock upon such sale or transfer (i) by Apollo, to a person that is not an affiliate of Apollo or (ii) by a management holder, to a non-management holder, subject to certain limited exceptions. Except as noted above, the Class A and Class B Common Stock shall be identical in all respects. Upon the occurrence of a Qualified Public Offering, all shares of Class B Common Stock shall automatically convert into shares of Class A Common Stock at such time as such conversion shall not result in a change in control of the Company.

III.   Paulson Stockholders Agreement

   Holdings, Realogy, Apollo and Paulson shall enter into a stockholders agreement (the “Paulson Stockholders Agreement”) prior to tendering their Existing Notes, which agreement shall become effective upon the closing of the Exchange Offers, and pursuant to which the parties will agree, among other things, that:
  

•      Paulson shall have the right to either (i) nominate one director (the “Paulson Appointee”) to serve as a member or (ii) designate one non-voting observer (the “Paulson Observer”) to attend all meetings of Holdings’ Board of Directors, subject to satisfaction of applicable laws, rules and regulations. In addition, Paulson may not transfer or assign its right to nominate the Paulson Appointee or designate the Paulson Observer to any other party and such rights will terminate at such time as Paulson is no longer a party to the Paulson Stockholders Agreement. Paulson will cause the Paulson Appointee to resign from Holdings’ Board of Directors once Paulson no longer has the right to nominate the Paulson Appointee.

  

•      Prior to a Qualified Public Offering, Paulson will be granted customary preemptive rights on (i) all debt issuances by the Company or Holdings to affiliates of the Company or Holdings and (ii) all equity issuances (or issuances of securities issuable upon exercise, convertible into or exchangeable for equity securities) by the Company or Holdings (not including customary excluded equity securities including securities issued pursuant to any equity compensation plans, securities issued as a dividend or distribution or upon any stock split, recapitalization or other subdivision or combination of securities, securities issued upon the exercise, conversion or exchange of or convertible into any options, warrants or convertible securities issued prior to the date of the Paulson Stockholders Agreement or for which Paulson has had the opportunity to subscribe for pursuant to its preemptive rights (and which shall include the 11.00% Convertible Notes), securities issued (other than to Apollo) in connection with (a) the funding of an acquisition

 

17


  

(whether by stock sale, merger, recapitalization, asset purchase or otherwise) or (b) a joint venture or strategic alliance), in each case, based upon Paulson’s pro rata fully-diluted equity ownership at the time of the applicable issuance. If at any time prior to a Qualified Public Offering, the Company or Holdings proposes to undertake a debt financing to third parties, the Company shall use its commercially reasonable efforts to allow Paulson to participate in such debt financing up to its pro rata debt ownership, at the same price and on the same terms as other participants in the financing; provided that if Apollo participates in such financing, Paulson shall also be permitted to participate in such financing to the same extent as Apollo based on their respective pro rata debt ownership at such time (the foregoing rights, collectively, the “Preemptive Rights”).

 

•      If the Company is no longer required to file reports under the Securities Act or the Exchange Act, the Company will make publicly available such necessary information for so long as necessary to permit sales pursuant to Rule 144 under the Securities Act.

 

•      Holdings shall at all times own 100% of the capital stock of Domus Intermediate Holdings Corp. (“Intermediate”) and Intermediate shall at all times own 100% of the capital stock of Realogy.

 

•      Holdings shall not engage in any business or activity other than owning the shares of Intermediate and Intermediate shall not engage in any business or activity other than owning shares of the Company.

 

•      No initial public offering of a subsidiary of Holdings shall be permitted without the consent of Paulson.

 

•      Prior to a Qualified Public Offering and without the consent of Paulson, Holdings shall not, and shall not permit Intermediate, Realogy or any of their respective direct or indirect subsidiaries, to enter into any related party transactions involving aggregate consideration in excess of $10 million other than any transaction (i) contemplated herein or pursuant to agreements or arrangements entered into prior to the date hereof, (ii) specifically permitted by Section 4.11(b) in the indentures pursuant to which the Extended Maturity Notes are issued or (iii) that are not materially less favorable to Holdings, Intermediate, Realogy or any of their respective direct or indirect subsidiaries than those that could have been obtained in a comparable transaction with an unrelated person.

 

•      Subject to certain limited exceptions consistent with the exceptions in the Restricted Payment covenant of the

 

18


  

existing Senior Notes Indentures, prior to a Qualified Public Offering and without the consent of Paulson, Holdings shall not, and shall not permit Intermediate or Realogy to pay any dividends or make any distributions on capital stock or redeem or repurchase any shares of capital stock.

 

•      Prior to a Qualified Public Offering, Paulson shall have customary tag-along rights in connection with any sale, in a single transaction or a series of related transactions, by Apollo of 5% or more of the outstanding shares of Holdings Common Stock.

 

•      Without the prior written consent of Paulson, the Company will not enter into any amendment to the Convertible Notes that would materially adversely affect Paulson’s holdings in the Convertible Notes for so long as Paulson holds at least 50% of the 11.00% Convertible Notes it receives in the Exchange Offers.

 

•      If requested by Paulson and to the extent necessary to enable Paulson to convert all of its then outstanding 11.00% Convertible Notes into Class A Common Stock, the Company will cooperate with and assist Paulson in completing one or more filings to comply with the requirements of the HSR Act. The Company shall pay the filing fees incurred by Paulson in connection with each such filing to permit the conversion of its 11.00% Convertible Notes into Class A Common Stock required each year by the HSR Act. The Company shall also pay the reasonable fees and expenses of one counsel solely in connection with the HSR filings; provided that reimbursements to and/or payments on account of fees and expenses of such counsel shall not exceed $50,000 on an annual basis. Paulson shall be responsible for all other fees and expenses related to such filings. In connection with the foregoing, the Company shall give Paulson prior notice of any Qualified Public Offering or the consummation of a Change of Control (to the extent such Change of Control occurs prior to a Qualified Public Offering), but in any event at least 75 days prior thereto. In addition, if Apollo or the Company engages in any transaction pursuant to which Paulson could be required to make an HSR filing prior to exercising its tag-along rights or preemptive rights in connection with such transaction, the Company shall give Paulson prior notice of such transaction; provided that, any such transaction may be consummated by the Company or Apollo, as applicable,

 

19


  

at any time following such notice so long as Paulson is given the opportunity to participate in such transaction in accordance with the terms of its tag-along and/or preemptive rights up to the date that is the earlier of 75 days following its receipt of the notice delivered in connection therewith and two business days following Paulson’s receipt of HSR approval with respect to such transaction.

  

The Paulson Stockholders Agreement shall terminate with respect to Paulson (but not Apollo) at such time as Paulson ceases to hold Registrable Securities (as defined in the Paulson Stockholders Agreement and assuming the conversion of any 11.00% Convertible Notes then held by Paulson into shares of Class A Common Stock) representing at least 5% or more of the outstanding shares of Holdings Common Stock on a fully diluted basis (including Class A Common Stock issuable upon conversion of the 11.00% Convertible Notes).

 

Additionally, Holdings will amend and restate its existing Management Investor Rights Agreement with management securityholders (“Management Holders”) and Apollo and its existing Securityholders Agreement (together with the Management Investor Rights Agreement, the “Existing Securityholders Agreements”) with Domus Co-Investment Holdings, LLC and the other Apollo holders. Except as otherwise provided in this Term Sheet, the Existing Securityholders Agreements, as amended and restated, will be substantially similar to the existing agreements.

 

Paulson shall have the right to demand two underwritten public offerings beginning on the date 36 months following the closing date of the Exchange Offers.

 

Paulson shall also have reasonable and customary piggyback registration rights, which may be assigned to a third party transferee in connection with any transfer (other than pursuant to a public offering) by Paulson to such third party transferee of at least $10 million aggregate principal amount of its 11.00% Convertible Notes (or Class A Common Stock received upon conversion of such 11.00% Convertible Notes, or a combination thereof) (the “Piggyback Rights”).

 

Paulson shall also agree to reasonable and customary black-out restrictions and holdback obligations, with reasonable penalties for black-out periods in excess of such reasonable and customary periods.

IV.   Avenue Stockholders Agreement

   Holdings, Realogy, Apollo and Avenue shall enter into a stockholders agreement (the “Avenue Stockholders Agreement”)

 

20


   prior to tendering their Existing Notes, which agreement shall become effective upon the closing of the Exchange Offers, and pursuant to which the parties will agree, among other things, that:
  

•      Prior to a Qualified Public Offering, Avenue will be granted Preemptive Rights.

 

•      Prior to a Qualified Public Offering, Avenue shall have customary tag-along rights in connection with any sale, in a single transaction or a series of related transactions, by Apollo of 5% or more of the outstanding shares of Holdings Common Stock.

 

•      Avenue will also receive the Piggyback Rights; provided that Avenue shall agree to reasonable and customary holdback obligations.

 

•      If the Company is no longer required to file reports under the Securities Act or the Exchange Act, the Company will make publicly available such necessary information for so long as necessary to permit sales pursuant to Rule 144 under the Securities Act.

  

The Avenue Stockholders Agreement shall terminate at such time as Avenue ceases to hold Registrable Securities (as defined in the Avenue Stockholders Agreement and assuming conversion of all 11.00% Convertible Notes held by Avenue into shares of Class A Common Stock) representing at least 30% of the Registrable Securities (assuming conversion of all 11.00% Convertible Notes held by Avenue into shares of Class A Common Stock) it acquires in the Exchange Offers or thereafter.

 

General :

 

Holdings may, without the consent of Paulson or Avenue, permit any holder that acquires in the Exchange Offers 11.00% Convertible Notes convertible into shares of Class A Common Stock representing 10% or more of the outstanding shares of Holdings Common Stock on an “as converted” basis to become a party to a stockholders agreement and to give such holder the same rights as Paulson under the Paulson Stockholders Agreement or Avenue under the Avenue Stockholders Agreement.

V.     Additional Stockholders Agreement

   Qualified holders tendering Existing Notes in the Exchange Offers and electing to receive Convertible Notes in respect to Existing Notes with an aggregate principal amount of greater than $[50] million will have the opportunity, at the option of such holder, to become a party to a stockholders agreement (the “New Stockholders Agreement”) among Realogy, Holdings and the other stockholders party thereto (such stockholders, collectively, the “Holders”). Pursuant to the New Stockholders Agreement the parties will agree, among other things, that prior to a Qualified Public Offering, Holders

 

21


   will be granted preemptive rights with respect to certain offerings of equity by Holdings or Realogy.
   The New Stockholders Agreement shall terminate upon the first to occur of (i) Holdings’ dissolution, liquidation or winding-up and (ii) with respect to each Holder, when such Holder ceases to own Convertible Notes (or shares of Class A Common Stock issued upon conversion of such Convertible Notes or a combination thereof) representing at least [30]% of the Convertible Notes (or shares of Class A Common Stock issued upon conversion of such Convertible Notes or a combination thereof) acquired by such Holder on the settlement date of the Exchange Offers.

VI.   Registration Rights Agreement

   On the closing date of the Exchange Offers, Realogy, Holdings, the Note Guarantors (as defined below) and the dealer managers for the Exchange Offers (for the benefit of the holders of the New Notes) will enter into a registration rights agreement, pursuant to which Realogy will agree, among other things, that:
  

With respect to the Extended Maturity Notes:

 

•      Within 15 days after the date that Realogy’s Form 10-K for the year ended December 31, 2010 is required to be filed with the SEC (not including any extensions) (the “10-K Filing Date”), Realogy will file a registration statement (the “Exchange Offer Registration Statement”) with the SEC with respect to registered offers (the “Registered Exchange Offers”) to exchange the Extended Maturity Notes for new registered notes of Realogy (the “Exchange Notes”) having terms substantially identical in all material respects to the Extended Maturity Notes (except that the Exchange Notes will not contain terms with respect to transfer restrictions).

 

•      Realogy will cause the Exchange Offer Registration Statement to be declared effective under the Securities Act within 120 days after the 10-K Filing Date.

 

•      Realogy will complete the Registered Exchange Offers of the Exchange Notes in exchange for surrender of the Extended Maturity Notes within 160 days after the 10-K Filing Date.

 

•      For each Extended Maturity Note tendered to Realogy pursuant to the Registered Exchange Offers, Realogy will issue to the holder of such Extended Maturity Note an Exchange Note having a principal amount equal to that of the surrendered Extended Maturity Note. Interest on each Exchange Note will accrue from the last interest payment date on which interest was paid on the Extended Maturity Note surrendered in exchange thereof or, if no interest has been paid on such Extended Maturity Note, from the issue date of the Extended

 

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Maturity Notes.

 

•      In the event that: (i) the Exchange Offer Registration Statement is not filed within 15 days after the 10-K Filing Date; (ii) such Exchange Offer Registration Statement is not declared effective within 120 days after the 10-K Filing Date; or (iii) the Registered Exchange Offers are not completed within 160 days after the 10-K Filing Date (each, a “Registration Default”), additional interest will accrue on the principal amount of the Extended Maturity Notes and the Exchange Notes (in addition to the stated interest on the Extended Maturity Notes and the Exchange Notes) from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured. Additional interest will accrue at a rate of 0.25% per annum during the 90-day period immediately following the occurrence of such Registration Default and shall increase by 0.25% per annum at the end of each subsequent 90-day period, but in no event shall such increase exceed 1.00% per annum.

 

With respect to the 11.00% Convertible Notes:

 

•      Within 15 days after the 10-K Filing Date, Realogy will file a shelf registration statement (the “Shelf Registration Statement”) covering resales of the 11.00% Convertible Notes and the Class A Common Stock issuable upon conversion of the 11.00% Convertible Notes.

 

•      Realogy will cause the Shelf Registration Statement to be declared effective under the Securities Act within 120 days after the 10-K Filing Date and will keep effective the Shelf Registration Statement until all of the 11.00% Convertible Notes and Class A Common Stock issued upon conversion of the 11.00% Convertible Notes may be sold freely under Rule 144 without volume limitations or public information requirements.

 

•      The Company may, at its option, register the 11.00% Convertible Notes or any of the Class A Common Stock into which the 11.00% Convertible Notes is convertible which has not yet been resold pursuant to the Shelf Registration on a short-form registration statement, if eligible to do so, or convert the Shelf Registration Statement into a short-form registration statement.

 

•      In the event that: (i) the Shelf Registration Statement is not filed within 15 days after the 10-K Filing Date; (ii) such Shelf Registration Statement is not declared effective within 120 days after the 10-K Filing Date; or

 

23


  

(iii) such Shelf Registration Statement ceases to be effective for a period that exceeds permitted black-out periods (each, a “Registration Default”), additional interest will accrue on the principal amount of the 11.00% Convertible Notes from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured. Additional interest will accrue at a rate of 0.25% per annum during the 90-day period immediately following the occurrence of such Registration Default and shall increase by 0.25% per annum at the end of each subsequent 90-day period, but in no event shall such increase exceed 1.00% per annum.

 

The registration rights agreement will contain reasonable and customary black-out restrictions.

 

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Annex A

Summary Terms of 11.00% Series A Convertible Notes, 11.00% Series B Convertible Notes and

11.00% Series C Convertible Notes (collectively, the “Notes”)

 

Issuer:    Realogy Corporation (the “ Realogy ”).
Series:    Series A Notes, Series B Notes and Series C Notes. Series A Notes, Series B Notes and Series C Notes will be issued under the same indenture and will be treated as a single class for all purposes under the indenture.
Maturity Date:    April 2018 (8 years), if not converted prior to such date. Realogy shall be obligated to pay the outstanding aggregate principal amount in cash on the maturity date of the Notes
Interest:    Cash interest on the Series A Convertible Notes will accrue at a rate of 10.50% from October 15, 2010 to, but not including, the issue date of the Series A Convertible Notes and will accrue at a rate of 11.00% per annum thereafter.
   Cash interest on the Series B Convertible Notes will accrue at a rate of 11.75% from October 15, 2010 to, but not including, the issue date of the Series B Convertible Notes and will accrue at a rate of 11.00% per annum thereafter.
   Cash interest on the Series C Convertible Notes will accrue at a rate of 12.375% from October 15, 2010 to, but not including, the issue date of the Series C Convertible Notes and will accrue at a rate of 11.00% per annum thereafter.
   Realogy will pay interest on overdue principal, if any, from time to time on demand at a rate that is 2% per annum in excess of 11.00% to the extent lawful; it will pay interest on overdue installments of interest from time to time on demand at a rate that is 2% per annum in excess of 11.00% to the extent lawful.
Interest Payment Dates:    Interest on the Notes will be payable semi-annually on April 15 and October 15 commencing on April 15, 2011, and will accrue from October 15, 2010.
Ranking and Guarantees:    The Notes will be unsecured senior subordinated Indebtedness of Realogy, will be subordinated in right of payment to all existing and future Senior Indebtedness of Realogy, including the Existing Senior Notes and New

 

Annex A-1


   Senior Notes, will rank equally in right of payment with all existing and future Senior Subordinated Pari Passu Indebtedness of Realogy, including the Existing Subordinated Notes and the New Subordinated Notes, and will be senior in right of payment to all existing and future Indebtedness of Realogy that is by its terms subordinated to the Notes.
   The Notes will be guaranteed (each, a “ Guarantee ”) by each subsidiary that guarantees the New Senior Notes on an unsecured senior subordinated basis.
   Holdings will also guarantee the Notes on an unsecured junior subordinated basis.
Optional Conversion:    The Notes will be convertible at any time at the option of the holders thereof, in whole or in part, into shares of Class A common stock of Domus Holdings Corp. (“Holdings”), par value $0.01 per share (“Class A Common Stock”), at the conversion rate described below.
Conversion Rate:    979.6098 shares of Class A Common Stock per $1,000 aggregate principal amount of Series A Convertible Notes and Series B Convertible Notes, which is equivalent to an initial conversion price of approximately $1.025 per share and 926.7841 shares of Class A Common Stock per $1,000 aggregate principal amount of Series C Convertible Notes, which is equivalent to an initial conversion price of approximately $1.079 per share. The conversion rate will be the subject to adjustment as provided in “Anti-Dilution Protections” below.
Optional Redemption:    Upon a Qualified Public Offering (as defined below) and thereafter, the Notes will be redeemable at the option of Realogy at a price equal to 90% of the principal amount thereof, plus accrued and unpaid interest to the date of redemption. Holders will be provided with reasonable notice of an upcoming redemption and will have a reasonable period of time to convert prior to the redemption.
   A “Qualified Public Offering” shall mean (i) an underwritten public offering of Class A Common Stock by Holdings or any selling securityholders pursuant to an effective registration statement filed by Holdings with the Securities and Exchange Commission (other than (a) a registration relating solely to an employee benefit plan or

 

Annex A-2


   employee stock plan, a dividend reinvestment plan, or a merger or a consolidation, (b) a registration incidental to an issuance of securities under Rule 144A, (c) a registration on Form S-4 or any successor form, or (d) 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 Holdings and/or other selling securityholders) sold in such offering (together with the aggregate offering prices from any prior such offerings) is at least $200 million and the listing of Holdings Class A Common Stock on the NASDAQ Global Select Market, the NASDAQ Global Market or the New York Stock Exchange or any successor exchange to the foregoing.
Change of Control:    Upon a Change of Control, each holder of Notes shall have the right to require Realogy to repurchase its Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase.
   Holders will be provided with prior notice of the consummation of a Change of Control and will have a reasonable period of time to convert prior to such Change of Control.
   A “Change of Control” will be defined in the same way Change of Control is defined in the New Senior Notes Indenture.
Anti-Dilution Protections:    Customary anti-dilution protection shall be provided for mergers, reorganizations, consolidations, stock splits, extraordinary stock dividends, combinations, recapitalizations, reclassifications, distributions of assets (including cash) and similar events. Anti-dilution protection shall also be provided for any equity issuances conducted without consideration or for consideration per share less than the fair market value of the common stock at the time of such issuance.
Covenants:    Limited to the payment of principal and interest and conversion and covenants related to conversion (e.g. reservation of shares, listing, etc.).
Limitations on Mergers,   
Consolidations, Etc.:    The Notes will contain a reasonable and customary merger provision for convertible subordinated securities, including, without limitation, assumption of notes by a successor corporation, which shall be a U.S. domiciled corporation.

 

Annex A-3


Events of Default:    The Notes will contain event of default provisions similar to those contained in Realogy’s Existing Subordinated Notes and such other events of default as are usual and customary for convertible subordinated securities.
Amendment, Supplement   
and Waiver:    The Notes may generally be amended or supplemented or compliance therewith waived with the consent of holders of 66 2/3% of the aggregate principal amount of outstanding Notes (with Notes held by affiliates of Realogy eligible to consent to the extent permitted under the Trust Indenture Act), except every affected holder of Notes must consent to:
  

•      reduce the required percentage of Notes for amendments, supplements or waivers;

  

•      change the maturity date of the Notes;

  

•      reduce the principal of, interest rate on or premium payable on the Notes;

  

•      make any change that adversely affects the conversion rights of the Notes, including the conversion price and anti-dilution provisions;

  

•      make any change that grants additional redemption rights;

  

•      change the currency payable on the Notes;

  

•      adversely affect the ranking of the Notes or Guarantees;

  

•      waive or impair the right to sue for payments on the Notes; or

  

•      release the Guarantee of any significant subsidiary.

Common Stock Dividends:    The Notes will not participate in any common stock dividends or distributions of Holdings.

Transfer Restrictions:

   The Notes and the Class A Common Stock into which the Notes are convertible will initially not be registered under the Securities Act and holders of the Notes and/or the Class A Common Stock will not be able to offer or sell such Notes and/or Class A Common Stock except pursuant to an

 

Annex A-4


   exemption from or in a transaction not subject to the registration requirements of the Securities Act.

 

Annex A-5


Annex B

Summary Terms of

New Senior Notes and New Subordinated Notes (collectively, the “New Notes”)

 

Issuer    Realogy
Securities    11.00% Senior Notes due 2017.
   11.50% Senior Notes due 2017.
   12.875% Senior Subordinated Notes due 2018.
Maturity   

The New 11.00% Senior Cash Notes and the New 11.50% Senior Cash Notes will mature in April 2017.

 

The New Subordinated Notes will mature in April 2018.

Interest   

Cash interest on the New 11.00% Senior Cash Notes will accrue at a rate of 10.50% from October 15, 2010 to, but not including, the issue date of the New 11.00% Senior Cash Notes and will accrue at a rate of 11.00% per annum thereafter.

 

Cash interest on the New 11.50% Senior Cash Notes will accrue at a rate of 11.75% from October 15, 2010 to, but not including, the issue date of the New 11.50% Senior Cash Notes and will accrue at a rate of 11.50% per annum thereafter.

 

Cash interest on the New Subordinated Notes will accrue at a rate of 12.375% from October 15, 2010 to, but not including, the issue date of the New Subordinated Notes and will accrue at a rate of 12.875% per annum thereafter.

Interest payment dates    Cash interest on the New 11.00% Senior Cash Notes, the New 11.50% Senior Cash Notes and the New Subordinated Notes will be payable semi-annually on April 15 and October 15 commencing on April 15, 2011, and will accrue from October 15, 2010.
AHYDO Payment    Holders of the Existing Senior Toggle Notes who exchange for the New 11.50% Senior Notes due 2017 shall retain their PIK interest paid on the Existing PIK Notes prior to the exchange in the form of additional principal amount of New 11.50% Senior Notes until the maturity date of the New 11.50% Senior Notes and as such will not receive cash payment.
Optional redemption   

New Senior Notes

 

On or after April 15, 2011, the Issuer may redeem the New Senior Notes at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each holder’s registered address (or electronically transmitted), at the following redemption prices (expressed as a percentage of the principal amount), plus accrued and unpaid interest and additional interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the

 

Annex B-1


   relevant interest payment date), if redeemed during the 12-month period commencing on April 15 of the years set forth in the applicable table below:

 

New 11.00% Senior Cash Notes

      

Period

   Redemption Price  

2011

     105.500

2012

     102.750

2013 and thereafter

     100.000

 

New 11.50% Senior Cash Notes

      

Period

   Redemption Price  

2011

     105.750

2012

     102.875

2013 and thereafter

     100.000

 

  

In addition, prior to April 15, 2011, the Issuer may redeem such Senior Notes at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each holder’s registered address (or electronically transmitted), at a redemption price equal to 100% of the principal amount of such Senior Notes redeemed plus the Applicable Premium (as defined in the existing Senior Notes Indentures) as of, and accrued and unpaid interest and additional interest, if any, to, the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

 

New Subordinated Notes

 

On or after April 15, 2011, the Issuer may redeem the New Subordinated Notes at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each holder’s registered address (or electronically transmitted), at the following redemption prices (expressed as a percentage of the principal amount), plus accrued and unpaid interest and additional interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on April 15 of the years set forth below:

 

Period

   Redemption Price  

2011

     106.438

 

Annex B-2


2012

     104.292

2013 and thereafter

     100.000

 

   In addition, prior to April 15, 2011, the Issuer may redeem the New Subordinated Notes at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each holder’s registered address (or electronically transmitted), at a redemption price equal to 100% of the principal amount of the New Subordinated Notes redeemed plus the Applicable Premium (as defined in the existing Subordinated Notes Indenture) as of, and accrued and unpaid interest and additional interest, if any, to, the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).
Mandatory offers to purchase    Upon a Change of Control (defined as it is defined in the existing Indentures), each holder of New Notes shall have the right to require Realogy to repurchase its Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase.
   Certain asset dispositions will be triggering events which may require Realogy to use the proceeds from those asset dispositions to make an offer to purchase the New Notes at 100% of their principal amount, together with accrued and unpaid interest and additional interest, if any, to the date of purchase if such proceeds are not otherwise used within 450 days:
  

•      to repay secured indebtedness, including indebtedness under Realogy’s new senior credit agreement (with a corresponding permanent reduction in commitment, if applicable) and certain other indebtedness; or

  

•      to invest or commit to invest in one or more businesses, assets, property or capital expenditures used or useful in a similar business or that replace the properties and assets that are the subject of the asset sale.

Guarantees    On the issue date, the New Senior Notes will be guaranteed on an unsecured senior basis, and the New Subordinated Notes will be guaranteed on an unsecured senior subordinated basis, in each case, by each of Realogy’s U.S. direct or indirect restricted subsidiaries that is a guarantor under Realogy’s senior secured credit facility (each, a “Note Guarantor”). Subject to certain exceptions, any U.S. restricted subsidiary that in the future guarantees Realogy’s indebtedness, including indebtedness under its senior secured credit facility, or indebtedness of any other guarantor will also guarantee the New Notes. Each guarantee will be released upon the release of the guarantor from its guarantee under Realogy’s senior secured credit facility and/or the repayment of the indebtedness that resulted

 

Annex B-3


   in the obligation to guarantee the New Notes. Holdings will also guarantee the New Senior Notes on an unsecured senior subordinated basis and the New Subordinated Notes on an unsecured junior subordinated basis.
Ranking    The New Senior Notes and the guarantees thereof will be Realogy’s and the Note Guarantors’ unsecured senior obligations and will:
  

•      be effectively subordinated to all of Realogy’s and the Note Guarantors’ existing and future senior secured debt, to the extent of the value of the assets securing such debt;

  

•      rank equally in right of payment with all of Realogy’s and the Note Guarantors’ existing and future unsecured senior debt; and

  

•      be senior in right of payment to all of Realogy’s and the Note Guarantors’ existing and future subordinated debt, including the 11.00% Convertible Notes.

   The New Subordinated Notes and the guarantees thereof will be Realogy’s and the Note Guarantors’ unsecured senior subordinated obligations and will:
  

•      be subordinated in right of payment to all of Realogy’s and the Note Guarantors’ existing and future senior debt;

  

•      rank equally in right of payment with all of Realogy’s and the Note Guarantors’ existing and future senior subordinated debt, including the 11.00% Convertible Notes; and

  

•      rank senior in right of payment to all of Realogy’s and the Note Guarantors’ future debt that is by its terms subordinated to the New Subordinated Notes.

   In addition, the New Senior Notes, the New Subordinated Notes and the guarantees thereof will be structurally subordinated to all of the existing and future liabilities and obligations (including trade payables, but excluding intercompany liabilities) of each of Realogy’s non-guarantor subsidiaries.
Covenants    The indentures for the New Senior Notes and the New Subordinated Notes will contain covenants that are substantially similar in all material respects to the covenants included in the indentures for the Existing Senior Notes and the Existing Subordinated Notes prior to the covenant strip.
Transfer restrictions    The New Notes will initially not be registered under the Securities Act and holders of the New Notes will not be able to offer or sell such New Notes except pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act.

 

Annex B-4


Schedule I

 

Investor      Aggregate Principal Amount of  
   Existing Senior Cash
Notes
     Existing Senior
Toggle Notes
     Existing Senior
Subordinated Notes
 
  Apollo            
$ 1,338,190,220       $ 482,928,000       $ 269,241,220       $ 586,021,000   
  Avenue            
$ 313,330,752       $ 255,177,000       $ 58,153,752       $ 0   
  Paulson            
$ 296,500,000       $ 261,500,000       $ 15,000,000       $ 20,000,000   

 

Schedule I-1


Schedule II

Permitted Modifications to the terms of the Exchange Offers and the New Notes

 

1. Any modification to the Minimum Condition, provided that the Minimum Condition may not be modified such that the Exchange Offers could be consummated with less than $2.45 billion of Existing Notes being tendered and accepted in the Exchange Offers.

 

2. Any increase of the interest rate applicable to any series of New Notes, provided that such modification shall not cause the interest rate of any series to increase by more than 1.00% from the interest rates set forth herein.

 

3. Any modification of the covenants applicable to any series of New Notes resulting in such covenants being more restrictive to the Company, provided that any such modification would not materially adversely affect any Strategic Partner’s holdings of New Senior Notes and New Subordinated Notes.

 

4. Any extension of the Exchange Offers, provided that the Exchange Offers may not be extended to expire on a date that is after the Outside Date.

 

5. Any reinstatement of withdrawal rights in the Exchange Offers, provided that the Strategic Partners shall be permitted to withdraw their Existing Notes during such withdrawal period.

 

6. Any modification to the terms of the Exchange Offers that is technical or conforming in nature.


Schedule I

Comparison of Proposed Material Covenant Differences

in the Extended Maturity Notes and the Existing Notes

 

1. Basket to Refinance Existing Subordinated Notes

 

  (a) Change: Add a new $50 million Restricted Payments basket that can be used only for the redemption, repurchase, defeasance or other acquisition or retirement of the stub of the Existing Subordinated Notes. The existing $125 million general basket is the same as the Existing Notes except that: (i) only $25 million is available for any Restricted Payment, including dividends; and (ii) the remaining $100 million is available only for investments and the redemption, repurchase, defeasance or other acquisition or retirement of subordinated obligations (no dividends, repurchases of equity, etc.).

 

2. Basket to Redeem the Convertible Notes upon a Qualified Public Offering

 

  (a) Change: Add a basket to permit the redemption of all of the Non-Apollo Convertible Notes upon or after a Qualified Public Offering.

 

  (i) Basket is necessary to enable the Company to ensure conversion of the Convertible Notes upon a Qualified Public Offering. Without this ability, the redemption right in the Convertible Notes will not be enforceable and the Company will not receive the deleveraging that is intended upon a Qualified Public Offering.

 

  (ii) Basket to be reduced by the amount of primary proceeds from the Qualified Public Offering to avoid double counting.

 

3. Cumulative Credit Basket to build upon conversion of the Convertible Notes

 

  (a) Existing Indenture already provides that the Cumulative Credit basket increases by the principal amount of any Indebtedness issued after the Issue Date which is converted into equity of the indirect parent of the Issuer

 

  (b) Change: Make any changes necessary to make language clear that this clause picks up the Convertible Notes and the Company will get credit for conversion of the Convertible Notes.

 

4. Payment for Consents provision

 

  (a) Change: Delete the payment for consents provision

 

5. Asset Sale Covenant

 

  (a) Change: Revise covenant to provide that any liabilities for which the Issuer is no longer responsible, not just liabilities assumed by the transferee of the assets, counts as cash equivalents for purposes of the Asset Sales covenant.

 

6. Cumulative Credit Basket Timing


  (a) Will remain April 1, 2007.

 

7. Debt Baskets

 

  (a) Change: Right size existing credit agreement basket from $3,250 million to $3,300 million to reflect current capital structure ($1.9 billion of Term Loan B, $750 million of Revolver plus $650 million of Second Lien)


Schedule II

Form of Paulson Stockholders Agreement


 

 

INVESTOR SECURITYHOLDERS AGREEMENT

by and among

DOMUS HOLDINGS CORP.,

REALOGY CORPORATION,

PAULSON & CO. INC., and

the SECURITYHOLDERS that are parties hereto

DATED AS OF NOVEMBER 30, 2010

 

 

 


INVESTOR SECURITYHOLDERS AGREEMENT, dated as of November 30, 2010 (this “ Agreement ”), by and among Domus Holdings Corp., a Delaware corporation (the “ Company ”), Realogy Corporation, a Delaware corporation (“ Realogy ”), Paulson & Co. Inc., a Delaware corporation, on behalf of the several investment funds and accounts managed by it (“ Paulson ”), and the Apollo Holders (as such term is hereinafter defined).

WHEREAS, the Company owns, directly or indirectly, all of the outstanding equity interests of (i) Domus Intermediate Holdings Corp., a Delaware corporation (“ Intermediate ”), and (ii) Realogy;

WHEREAS, Realogy has previously issued 10.50% Senior Notes due 2014, 11.00%/11.75% Senior Toggle Notes due 2014, and 12.375% Senior Subordinated Notes due 2015 (collectively, the “ Existing Notes ”);

WHEREAS, the Company and Paulson will exchange a portion of the Existing Notes for 11.00% Series A Convertible Notes due 2018 (the “ Series A Convertible Notes ”), 11.00% Series B Convertible Notes due 2018 (the “ Series B Convertible Notes ”) and 11.00% Series C Convertible Notes due 2018 (the “ Series C Convertible Notes ” and, together with the Series A Convertible Notes and the Series B Convertible Notes, the “ Convertible Notes ”) convertible at any time at the option of the holders thereof, in whole or in part, into shares of Class A common stock of the Company, par value $0.01 per share, and Realogy will offer to exchange the Existing Notes held by the Existing Note holders for new 11.00% Senior Cash Notes due 2017, new 11.50% Senior Cash Notes due 2017, and new 12.875% Senior Subordinated Notes due 2018 (collectively, the “ Extended Maturity Notes ” and together with the Convertible Notes, the “ New Notes ” ) (the foregoing transactions, collectively, the “ Exchange Transactions ”);

WHEREAS, RCIV Holdings (Luxembourg) s.à.r.l., a Luxembourg société à responsabilité limitée (“ RCIV Luxco ”), a wholly owned subsidiary of RCIV Holdings, L.P, a Cayman Islands exempted limited partnership (“ RCIV Cayman ”), owns Existing Notes and will own Convertible Notes convertible into an equity interest in the Company upon consummation of the Exchange Transactions;

WHEREAS, Apollo Investment Fund VI, LP, a Delaware limited partnership (“ AIF VI ”), Domus Investment Holdings, LLC, a Delaware limited liability company (“ Domus Investment ”) and Domus Co-Investment Holdings, LLC, a Delaware limited liability company (“ Co-Investment Holdings ”), each own capital stock of the Company; and

WHEREAS, each of the Company, the Apollo Holders and Paulson deem it to be in their respective best interests to enter into this Agreement to set forth their agreements with respect to certain matters concerning the Company.

NOW, THEREFORE, in consideration of the premises and of the mutual consents and obligations hereinafter set forth, intending to be legally bound, the parties hereto hereby agree as follows:

Section 1. Definitions .

As used in this Agreement:

Affiliate ” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. 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.

Agreement ” has the meaning set forth in the preamble.

AIF VI ” has the meaning set forth in the preamble.

Apollo Holders ” means AIF VI, Domus Investment, RCIV Cayman, RCIV Luxco and Co-Investment Holdings, collectively with each of their respective Affiliates (including, for avoidance of doubt, any syndication vehicles).

Avenue Investor Securityholders Agreement ” means the investor securityholders agreement dated as of the date hereof by and between Avenue Investments L.P., the Company, Realogy and the Apollo Holders.

Board ” means the Board of Directors of the Company. All determinations by the Board required pursuant to the terms of this Agreement shall be made in the good faith sole discretion of the Board and shall be binding and conclusive.

Bylaws ” means the Company’s bylaws, as the same may be amended from time to time.

Charter ” means the Company’s Certificate of Incorporation, as the same may be amended from time to time.

Class A Common Stock ” means the Class A common stock of the Company, par value $.01 per share.

Class B Common Stock ” means the Class B common stock of the Company, par value $.01 per share.

Closing Date ” means the date of the closing of the Exchange Transactions.

Co-Investment Holdings ” has the meaning set forth in the preamble.

Common Stock ” means the Class A Common Stock, and the Class B Common Stock, collectively, and any class of common stock into which the Class A common stock or Class B common stock may be reclassified, converted or exchanged.

Company ” has the meaning set forth in the preamble.

Company Offered Securities ” has the meaning set forth in Section 3.

Convertible Notes ” has the meaning set forth in the preamble.

Disposition ” means any direct or indirect transfer, assignment, sale, gift, pledge, hypothecation or other encumbrance, or any other disposition, of Subject Securities (or any interest therein or right thereto) or of all or part of the voting power (other than the granting of a revocable proxy) associated with the Subject Securities (or any interest therein) whatsoever, or any other transfer of beneficial ownership of Subject Securities whether voluntary or involuntary, including, without limitation (a) as a part of any liquidation of a securityholder’s assets or (b) as a part of any reorganization of a securityholder pursuant to the United States, state, foreign or other bankruptcy law or other similar debtor relief laws. “ Dispose ” shall have a correlative meaning.


Domus Investment ” has the meaning set forth in the preamble.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

Exchange Transactions ” has the meaning set forth in the recitals.

Existing Notes ” has the meaning set forth in the recitals.

Extended Maturity Notes ” has the meaning set forth in the recitals.

Group ” has the meaning ascribed to such term in Section 13(d)(3) of the Exchange Act.

HSR Act ” means Hart-Scott-Rodino Act of 1976, as amended.

Intermediate ” has the meaning set forth in the recitals.

IPO ” means the initial public offering of shares of the Common Stock pursuant to an effective Registration Statement under the Securities Act.

Liquidated Damages ” has the meaning set forth in Section 4.3.

Lock-Up Period ” has the meaning set forth in Section 4.3(c).

Losses ” has the meaning set forth in Section 4.6(a).

Management Investor Rights Agreement ” means the management investor rights agreement by and between the Company, AIF IV, Domus Investment and certain holders party thereto, as amended.

Maximum Suspension Period ” has the meaning set forth in Section 4.4.

New Notes ” has the meaning set forth in the recitals.

Participating Holders ” has the meaning set forth in Section 4.5(a)(i).

Paulson ” has the meaning set forth in the recitals.

Paulson Appointee ” has the meaning set forth in Section 6.

Paulson Observer ” has the meaning set forth in Section 6.

Person ” shall be construed broadly and shall include, without limitation, an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity or any department, agency or political subdivision thereof or any other entity.

Piggy-Back Notice ” has the meaning set forth in Section 4.3(a).

Piggy-Back Registration Right ” has the meaning set forth in Section 4.3(a).

Preemptive Event ” has the meaning set forth in Section 3.


Preemptive Rights Offer ” has the meaning set forth in Section 3.

Preemptive Rights Offer Notice ” has the meaning set forth in Section 3.

Pro Rata Debt Ownership ” shall be a fraction of the Company Offered Securities determined by dividing (A) the aggregate principal amount of New Notes then owned by Paulson plus the aggregate principal amount of Convertible Notes converted into Class A Common Stock by Paulson to the extent such Class A Common Stock is still held by Paulson by (B) $[            ] billion (which is the total outstanding indebtedness of the Company and Holdings on a consolidated basis as of the date of this Agreement).

Proportionate Debt Percentage ” shall mean a number (expressed as a percentage) equal to a fraction, the numerator of which is the aggregate principal amount of the debt proposed to be purchased by the holder of the Existing Notes or New Notes in connection with a debt financing to third parties and the denominator of which is the aggregate principal amount of the Existing Notes or New Notes owned by such holder.

Proportionate Percentage ” with respect to any holder of Common Stock, shall mean a number (expressed as a percentage) equal to a fraction, the numerator of which is the total number of shares of Common Stock proposed to be transferred by such holder in a proposed Disposition and the denominator of which is the total number of shares of Common Stock owned by such holder.

Public Sale ” means any sale, occurring simultaneously with or after an IPO, of Common Stock to the public pursuant to an offering registered under the Securities Act or to the public in the manner described by the provisions of Rule 144 promulgated thereunder, other than an offering relating to employee incentive plans.

Qualified Public Offering ” means (a) an Underwritten Offering of shares of Class A Common Stock by the Company or any selling securityholders pursuant to an effective Registration Statement filed by the Company with the SEC (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 Class A 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 $200 million and (b) the listing of Company Class A Common Stock on the NASDAQ Global Select Market, the NASDAQ Global Market, the New York Stock Exchange or any successor exchange to the foregoing.

RCIV Cayman ” has the meaning set forth in the preamble.

RCIV Luxco ” has the meaning set forth in the preamble.

Realogy ” has the meaning set forth in the recitals.

Registrable Securities ” shall mean (i) the shares of Class A Common Stock issued upon the conversion of the Convertible Notes, (ii) the shares of Class A Common Stock acquired in connection with the exercise of preemptive rights in accordance with Section 3, (iii) any and all shares of Common Stock issued or issuable with respect to Registrable Securities by way of a stock dividend or a stock split; provided, that any Registrable Securities shall cease to be Registrable Securities when (A) a Registration Statement with respect to the sale of such Registrable Securities has been declared effective under the Securities Act and such Registrable Securities have been disposed of pursuant to such Registration


Statement, (B) such Registrable Securities have been disposed of in reliance upon Rule 144 (or any similar provision then in force) under the Securities Act or (C) except for a transfer in accordance with Section 15(p), such Registrable Securities shall have been otherwise transferred to a third party; and provided, further, that any securities that have ceased to be Registrable Securities shall not thereafter become Registrable Securities and any security that is issued or distributed in respect of securities that have ceased to be Registrable Securities is not a Registrable Security and (iv) any shares of Common Stock required to be registered by the Company on behalf of any other Person possessing registration rights pursuant to another agreement in which the Company had granted such rights.

Registration Request ” has the meaning set forth in Section 4.1(a).

Registration Statement ” means any shelf registration statement or other registration statement filed with the SEC with respect to the Common Stock.

Sale Notice ” has the meaning set forth in Section 5(a).

SEC ” means the Securities and Exchange Commission.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Securityholders Agreement ” means the securityholders agreement by and between the Company and the securityholders party thereto, as amended.

Series A Convertible Notes ” has the meaning set forth in the recitals.

Series B Convertible Notes ” has the meaning set forth in the recitals.

Series C Convertible Notes ” has the meaning set forth in the recitals.

Subject Securities ” means shares of Class A Common Stock, the Convertible Notes and any shares of Class A Common Stock issuable upon conversion thereof.

Suspension Period ” has the meaning set forth in Section 4.3.

Tag-Along Holder ” has the meaning set forth in Section 5(b).

Tag-Along Notice ” has the meaning set forth in Section 5(b).

Tag-Along Transaction ” has the meaning set forth in Section 5(a)

Underwritten Offering ” means a sale of shares of Common Stock to an underwriter for reoffering to the public.

Section 2. Representations and Warranties . The Company hereby represents and warrants that the Company has not granted registration rights to any Person other than pursuant to (i) the Management Investor Rights Agreement, (ii) the Securityholders Agreement and (iii) the Avenue Investor Securityholders Agreement.

Section 3. Preemptive Events . If any time prior to (but not including) a Qualified Public Offering, (i) the Company or Realogy proposes to issue or sell any equity securities (or


securities convertible into, issuable upon exercise of or exchangeable for any such equity securities) (not including (1) securities issued pursuant to any equity compensation plans, (2) securities issued as a dividend or distribution or upon any stock split, recapitalization or other subdivision or combination of securities, (3) securities issued upon the exercise, conversion or exchange of any options, warrants or convertible securities issued prior to the date hereof or for which Paulson has had the opportunity to subscribe for pursuant to its preemptive rights (and which shall include the Convertible Notes) and (4) securities issued (other than to an Apollo Holder) in connection with (Y) the funding of an acquisition (whether by stock sale, merger, recapitalization, asset purchase or otherwise) or (Z) a joint venture or strategic alliance) or (ii) the Company or Realogy proposes to issue or sell debt to any Affiliate of Realogy or the Company (for the avoidance of doubt, such Affiliate of Realogy or the Company shall not include the Company, Realogy, Intermediate or any subsidiary of Realogy) (collectively, “ Company Offered Securities ”), the Company shall give notice in writing (the “ Preemptive Rights Offer Notice ”) to Paulson of such proposed issuance or sale (a “ Preemptive Event ”). The Preemptive Rights Offer Notice shall describe the proposed transaction, identify the proposed purchaser(s), and contain an offer (the “ Preemptive Rights Offer ”) to sell to Paulson, at the same price, on the same terms and for the same consideration to be paid by the proposed purchaser(s). With respect to clause (i) of this Section 3, Paulson shall have the right to participate in the Preemptive Event up to its respective pro rata fully-diluted portion of its equity ownership (which shall be a fraction of the Company Offered Securities determined by dividing (A) the number of shares of Common Stock then owned by Paulson on a fully-diluted basis assuming the conversion of all of its Convertible Notes (B) the number of shares of Common Stock then outstanding (before giving effect to the Preemptive Event) on a fully-diluted basis assuming, among other things, the conversion of all Convertible Notes then outstanding. With respect to clause (ii) of this Section 3, Paulson shall have the right to participate in the Preemptive Event up to its Pro Rata Debt Ownership. The Preemptive Rights Offer Notice shall be made fifteen (15) days prior to the relevant issuance or sale. If Paulson fails to accept in writing the Preemptive Rights Offer by the tenth (10th) day after the Company’s delivery of the Preemptive Rights Offer Notice, Paulson shall have no further rights with respect to the proposed transaction; provided, however, that if any of the terms of the Preemptive Event, taken as a whole, materially change after the date of the Preemptive Rights Offer Notice, then the Company shall be required to give a new Preemptive Rights Offer Notice and Paulson shall have an additional ten (10) days to accept in writing the Preemptive Rights Offer. If Paulson accepts the Preemptive Rights Offer and such acceptance could require Paulson to complete a filing under the HSR Act, Paulson may participate in the Preemptive Event until the earlier of the date that (i) is two business days following the date that Paulson has complied with the requirements of the HSR Act and received the necessary approvals or otherwise determined no filing under the HSR Act is required with respect to such participation and (ii) seventy five (75) days following the Company’s delivery of the Preemptive Rights Offer Notice, or such later date as may be described in the Preemptive Rights Offer Notice; provided that in no event shall the issuance of the Company Offered Securities to any other party be delayed in connection with such participation. If at any time prior to a Qualified Public Offering, the Company or Realogy proposes to undertake a debt financing to third parties and the Apollo Holders do not participate in such debt financing, then the Company shall use its commercially reasonable efforts to allow Paulson to participate, up to its Pro Rata Debt Ownership, at the same price, on the same terms and for the same consideration as other participants in the financing; provided however that if the


Apollo Holders participate in such financing, then Paulson shall have the right to participate in the financing at the same price, on the same terms and for the same consideration as the Apollo Holders, provided that the Proportionate Debt Percentage of debt to be purchased by Paulson shall not exceed the Proportionate Debt Percentage of debt that the Apollo Holders elect to acquire in such debt financing to third parties.

Section 4. Registration Rights.

4.1 Underwritten Demand Registration Rights .

(a) Subject to the other provisions of this Section 4.1, at any time after the date that is thirty six (36) months after the Closing Date, Paulson may make no more than two (2) written requests (each, a “ Registration Request ”) to the Company for registration under and in accordance with the provisions of the Securities Act of all or part of its shares of Common Stock. The offering of the Registrable Securities pursuant to such Registration Request shall be in the form of an Underwritten Offering only. Notwithstanding anything to the contrary set forth in this Section 4.1(a), the Company will not be required to effect a registration pursuant to this Section 4.1(a) unless the estimated gross proceeds from the sale of the Registrable Securities included in the Registration Request are at least $75 million.

(b) If prior to a Qualified Public Offering Paulson elects to exercise its demand rights pursuant to this Section 4.1 or the Company notifies Paulson of its intention to consummate a Qualified Public Offering, on its own behalf or in connection with an exercise by any Person possessing demand rights pursuant to another agreement in which the Company has granted demand rights, Paulson agrees that Paulson shall not sell publicly, make any short sale of, grant any option for the purchase of, or otherwise dispose, any shares of Class A Common Stock (except, in each case, as part of the Qualified Public Offering, if permitted) during the period beginning on the delivery or receipt of such notice and ending ninety (90) days (or, in either case, such greater period as may be requested by the lead managing underwriter or underwriters, not to exceed one hundred eighty (180) days) after the effective date of the Registration Statement filed in connection with such Qualified Public Offering. Notwithstanding the foregoing, Paulson shall be entitled to transfer any shares of Class A Common Stock (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to Affiliates of Paulson where such Affiliates agree to be bound in writing by the restrictions set forth herein, (iii) with the prior written consent of the Company, (iv) to a nominee or custodian of a Person to whom a disposition or transfer would be permitted hereunder, provided that such nominee or custodian agrees to be bound in writing by the restrictions set forth herein, (v) following the consummation of a Qualified Public Offering, in transactions relating to shares of Common Stock or other securities acquired in open market transactions, or (vi) to any wholly-owned subsidiary or any stockholders, partners, members or similar persons of Paulson, provided that such Person agrees to be bound in writing by the restrictions set forth herein; provided that, in the case of this clause (i), (iv), (v) and (vi), such transfers do not give rise to a requirement to disclose in any public report or filing with the SEC and Paulson does not otherwise voluntarily effect any public filing or report regarding such transfers.


(c) All Registration Requests made pursuant to this Section 4 will specify the aggregate amount of shares of Common Stock to be registered. The Company shall include in the Underwritten Offering pursuant to a Registration Request all Registrable Securities with respect to which the Company has received a written request from any other Person possessing such rights pursuant to another agreement in which the Company has granted demand rights for inclusion therein within fifteen days after receipt by the Company of such demand. Promptly upon receipt of any such Registration Request, the Company will use its reasonable best efforts to effect such registration under the Securities Act (including, without limitation, filing post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with the applicable regulations promulgated under the Securities Act) of the shares of Class A Common Stock which the Company has been so requested to register within 180 days after such request (or within 120 days of such request in the case of a Registration Request after a Qualified Public Offering (subject to any lock-up restrictions)).

(d) Registrations under this Section 4.1 shall be on such appropriate registration form of the SEC as shall be selected by the Company.

(e) The Company shall use its reasonable best efforts to keep any Registration Statement filed in response to a Registration Request effective for as long as is necessary for Paulson to dispose of the covered securities.

(f) The Company shall select the underwriters, provided such selection is reasonably acceptable to Paulson.

4.2 Piggy-Back Registration Rights .

(a) Participation . Subject to Section 4.2(b), if at any time the Company proposes to register any of its shares of Common Stock under the Securities Act (other than a registration on Form S-4 or S-8 or any successor form to such Forms or any registration of securities as it relates to an offering and sale to management of the Company pursuant to any employee stock plan or other employee benefit plan arrangement or pursuant to a shelf registration statement), whether for its own account or for the account of one or more stockholders of the Company, and the registration form to be used may be used for any registration of Registrable Securities, then the Company shall give prompt written notice (the “ Piggy-Back Notice ”) to Paulson of its intention to effect such a registration and, subject to Section 4.2(b), shall include in such registration all Registrable Securities with respect to which the Company has received a written request from Paulson for inclusion therein within 15 days after the receipt of the Piggy-Back Notice. The Piggy-Back Notice shall offer Paulson the right, subject to Section 4.2(b) (the “ Piggy-Back Registration Right ”), to register such number of shares of Registrable Securities as Paulson may request and shall set forth (i) the anticipated filing date of such Registration Statement and (ii) the number of shares of Class A Common Stock that is proposed to be included in such Registration Statement.

(b) Underwriters’ Cutback . Notwithstanding the foregoing, if a registration pursuant to this Section 4 (including Section 4.1) involves an Underwritten Offering and the managing underwriter or underwriters of such proposed Underwritten Offering advises the


Company that the total or kind of securities which Paulson and any other persons or entities intend to include in such offering would be reasonably likely to adversely affect the price, timing or distribution of the securities offered in such offering, then the number of securities proposed to be included in such registration shall be allocated among the Company and all of the selling securityholders, such that the number of securities that each such Person shall be entitled to sell in the Underwritten Offering shall be included in the following order:

(i) In the event of an exercise by Paulson of its demand rights or any other Person possessing such rights pursuant to another agreement in which the Company has granted demand rights:

(1) first, the Registrable Securities held by the Person exercising a demand right pursuant to Section 4.1 or pursuant to any other agreement in which the Company has granted demand rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person in connection with such registration;

(2) second, the Registrable Securities held by the Persons requesting their Registrable Securities to be included in such registration pursuant to the terms of Section 4.2(a) or pursuant to any other agreement in which the Company has granted piggy-back registration rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person at the time of such registration; and

(3) third, the securities to be issued and sold by the Company in such registration.

(ii) In all other cases:

(1) first, the securities to be issued and sold by the Company in such registration; and

(2) second, the Registrable Securities held by the Persons requesting their Registrable Securities be included in such registration pursuant to the terms of Section 4.2(a) or pursuant to any other agreement in which the Company has granted Piggy-Back registration rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person at the time of such registration.

Notwithstanding anything to the contrary set forth in this Section 4.2, if the managing underwriter for an Underwritten Offering advises the Company that the inclusion of the number of shares of Common Stock proposed to be included in any registration by any particular Person would interfere with the successful marketing (including pricing) of such shares to be offered thereby, then the number of such shares proposed to be included in such registration by such Person shall be reduced to the lower of the number of such shares that the managing underwriter advises that such Person may sell in the Underwritten Offering and the number of such shares calculated pursuant to the foregoing. If the number of Paulson’s shares of Common Stock included in a registration made pursuant to a Registration Request is reduced in accordance with this Section 4.2(b) to less than two-thirds of the total shares of Common Stock originally proposed to be included by Paulson in such registration, Paulson shall not be deemed to have used a Registration Request under Section 4.1.


(c) Lock-up . If the Company at any time shall register shares of Common Stock under the Securities Act for sale to the public in an underwritten offering and if requested by the lead managing underwriter, Paulson agrees not to sell publicly, make any short sale of, grant any option for the purchase of, or otherwise dispose of, any capital stock of the Company without the prior written consent of the lead managing underwriter, during a period of not more than ninety (90) days (or up to one hundred eighty (180) days if requested by the lead managing underwriter in connection with a Qualified Public Offering) commencing on the effective date of the Registration Statement (the “Lock-Up Period”); provided, however, that if any holders of Registrable Securities shall be subject to a shorter period or receives more advantageous terms relating to the Lock-Up Period, then the Lock-Up Period shall be such shorter period and also on such more advantageous terms and Paulson shall be released from its obligations under this clause to the extent any other holder of Registrable Securities is released. Notwithstanding the foregoing, Paulson shall be entitled to transfer any shares of Class A Common Stock (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to Affiliates of Paulson where such Affiliates agree to be bound in writing by the restrictions set forth herein, (iii) with the prior written consent of the Company, (iv) to a nominee or custodian of a Person to whom a disposition or transfer would be permitted hereunder, provided that such nominee or custodian agrees to be bound in writing by the restrictions set forth herein, (v) following the consummation of a Qualified Public Offering, in transactions relating to shares of Common Stock or other securities acquired in open market transactions, or (vi) to any wholly-owned subsidiary or any stockholders, partners, members or similar persons of Paulson, provided that such Person agrees to be bound in writing by the restrictions set forth herein; provided that, in the case of this clause (i), (iv), (v) and (vi), such transfers do not give rise to a requirement to disclose in any public report or filing with the SEC and Paulson does not otherwise voluntarily effect any public filing or report regarding such transfers. In addition, if requested by the lead managing underwriter, in connection with a public offering, Paulson shall enter into a customary lock-up agreement with the lead managing underwriter.

(d) Company Control . The Company may decline to file a Registration Statement after giving the Piggy-Back Notice, or withdraw a Registration Statement after filing and after such Piggy-Back Notice, but prior to the effectiveness of the Registration Statement, provided that the Company shall promptly notify Paulson in writing of any such action and provided further that the Company shall bear all reasonable expenses incurred by Paulson or otherwise in connection with such withdrawn Registration Statement. Except as provided in Section 4.1(f), notwithstanding any other provision herein, the Company shall have sole discretion to select any and all underwriters that may participate in any Underwritten Offering.

(e) Participation in Underwritten Offerings . No Person may participate in any Underwritten Offering under this Section 4 unless such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Persons entitled to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements, lock-ups and other documents required for such underwriting arrangements. Nothing in this Section 4.2(e) shall be construed to create any additional rights regarding the Piggy-Back registration of Registrable Securities in any Person otherwise than as set forth herein.


(f) Expenses . The Company will pay all registration fees and other reasonable expenses in connection with each registration of Registrable Securities requested pursuant to this Section 4, including reasonable fees and expenses of one counsel to the Participating Holders which shall not exceed $100,000; provided, that each Participating Holder shall pay any remaining counsel fees and expenses and all applicable underwriting fees, discounts and similar charges (pro rata based on the securities sold).

(g) Publicly Available Information . If the Company is not required to file reports under the Securities Act or the Exchange Act, the Company will make publicly available such necessary information for so long as necessary to permit sales pursuant to Rule 144 under the Securities Act.

4.3 Registration Statement Suspension . Following Paulson’s receipt of a resolution of the Board certified by the secretary of the Company stating that, in the good faith judgment of the Board, the filing, initial effectiveness or continued use of a Registration Statement would require the Company to make a public disclosure of material non-public information, which disclosure in the good faith judgment of the Board (A) would be required to be made in any Registration Statement so that such Registration Statement would not be materially misleading, (B) would not be required to be made at such time but for the filing, effectiveness or continued use of such Registration Statement, and (C) would reasonably be expected to either (1) materially and adversely affect the Company or its business if made at such time or (2) unreasonably interfere with the Company’s ability to effect a planned or proposed acquisition, disposition, financing, reorganization, recapitalization or similar transaction, the Company may delay the filing or initial effectiveness of, or suspend use of, such Registration Statement; provided that the Company shall not be permitted to do so under this Section 4.3 for more than 90 days during any twelve-month period (the “ Maximum Suspension Period ”); provided , further , that the Company shall pay liquidated damages (“ Liquidated Damages ”), from and including each day in excess of the Maximum Suspension Period at a rate per annum equal to an additional 0.25% of the principal balance of the notional amount of Convertible Notes that were exchanged by Paulson for those Registrable Securities that are still held by Paulson and with respect to which Paulson has requested registration and increasing by an additional 0.25% at the end of each subsequent 90 day period that such Registration Statement is suspended in excess of the Maximum Suspension Period, not to exceed 0.75%; provided that no Liquidated Damages shall accrue during any Suspension Period not in excess of the Maximum Suspension Period or if any Suspension Period is rescinded. Any amounts to be paid as Liquidated Damages shall be paid in cash semi-annually in arrears on the stated interest payment dates of the Convertible Notes. Any period during which the Company has delayed the filing or initial effectiveness of, or suspended the use of, a Registration Statement pursuant to this Section 4.3 is herein called a “ Suspension Period . ” The Company shall provide prompt written notice to Paulson of the commencement and termination of any Suspension Period but shall not be obligated under this Agreement to disclose the reasons therefor. Paulson shall keep the existence of each Suspension Period confidential and agrees to suspend, promptly upon receipt of the notice referred to above, the use of any prospectus relating to such registration in connection with any sale or offer to sell Registrable Securities. In addition, if the Company receives a Registration Request and the Company is then in the process of preparing to engage in a Public Sale, the Company shall inform Paulson of the Company’s intent to engage in a Public Sale and may require Paulson to withdraw such Registration Request for a period of up to 120 days so that the Company may


complete its Public Sale, and such withdrawn Registration Request shall not count as one of Paulson’s two Registration Requests hereunder. In the event that the Company ceases to pursue such Public Sale, it shall promptly inform Paulson and Paulson shall be permitted to submit a new Registration Request. Notwithstanding the foregoing, if the public announcement of the material, nonpublic information that resulted in such delay or suspension is made during such Suspension Period, then such Suspension Period shall terminate without any further action of the parties and the Company shall promptly notify Paulson of such termination. To the extent that the Company initiates one or more Suspension Periods hereunder in respect of any effective Registration Statement filed pursuant to this Agreement, the Company shall maintain the effectiveness of such Registration Statement for an additional number of days equal to the aggregate amount of days that the Company implemented such Suspension Period(s). Notwithstanding the foregoing, in the event of a postponement by the Company of the filing or effectiveness of a Registration Statement pursuant to a Registration Request or in the event that a sale is not made under a Registration Statement pursuant to a Registration Request that has remained effective for at least 30 days, Paulson shall have the right to withdraw such Registration Request, and such Registration Request shall not count as one of Paulson’s two Registration Requests hereunder. The foregoing shall be without prejudice to any rights of Paulson pursuant to Section 5.

4.4 Registration Rights Procedures .

(a) In connection with the Company’s obligations under Sections 4.1 and 4.2 to file a Registration Statement, the Company shall use its reasonable best efforts to cause such Registration Statement to become effective to permit the sale of such Registrable Securities in accordance with the intended method or methods of distribution thereof as expeditiously as reasonably practicable, and in connection therewith the Company shall:

(i) prepare the required Registration Statement including all exhibits and financial statements required under the Securities Act to be filed therewith, and before filing a Registration Statement or prospectus, or any amendments or supplements thereto, (x) furnish to the underwriters, if any, and to the holders of Registrable Securities covered by the applicable Registration Statement (“ Participating Holders ”), copies of all documents prepared to be filed, which documents shall be subject to the review of such underwriters and the Participating Holders and their respective counsel and make such changes to such documents as are reasonably requested by the Participating Holders and (y) except in the case of a registration under Section 4.2, not file any Registration Statement hereunder or prospectus or amendments or supplements thereto to which the underwriters, if any, or the Participating Holders shall reasonably object;

(ii) prepare and file with the SEC such pre- and post-effective amendments to such Registration Statement and supplements to the prospectus as may be (x) reasonably requested by any other Participating Holders (to the extent such request relates to information relating to such holder), or (z) necessary to keep such registration effective for the period of time required by this Agreement, and comply with provisions of the applicable securities laws with respect to the sale or other disposition of all securities covered by such Registration Statement during such period in accordance with the intended method or methods of disposition by the sellers thereof set forth in such Registration Statement;


(iii) notify the Participating Holders and the managing underwriter or underwriters, if any, and (if requested) confirm such advice in writing and provide copies of the relevant documents, as soon as reasonably practicable after notice thereof is received by the Company (a) when the applicable Registration Statement or any amendment thereto has been filed or becomes effective, and when the applicable prospectus or any amendment or supplement to such prospectus has been filed, (b) of any written comments by the SEC or any request by the SEC or any other federal or state governmental authority for amendments or supplements to such Registration Statement or such prospectus or for additional information, (c) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or any order by the SEC or any other regulatory authority preventing or suspending the use of any preliminary or final prospectus or the initiation or threatening of any proceedings for such purposes, (d) if, at any time, the representations and warranties of the Company in any applicable underwriting agreement cease to be true and correct in any material respect, and (e) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;

(iv) promptly notify the Participating Holders and the managing underwriter or underwriters, if any, when the Company becomes aware of the happening of any event as a result of which the applicable Registration Statement or the prospectus included in such Registration Statement (as then in effect) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of such prospectus and any preliminary prospectus, in light of the circumstances under which they were made) not misleading or, if for any other reason it shall be necessary during such time period to amend or supplement such Registration Statement or prospectus in order to comply with the Securities Act and, in either case as promptly as reasonably practicable thereafter, prepare and file with the SEC, and furnish without charge to the Participating Holders and the managing underwriter or underwriters, if any, an amendment or supplement to such Registration Statement or prospectus which shall correct such misstatement or omission or effect such compliance;

(v) use its reasonable best efforts to prevent, or obtain the withdrawal of, any stop order or other order suspending the use of any preliminary or final prospectus;

(vi) promptly incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters reasonably believes should be included therein relating to the plan of distribution with respect to such Registrable Securities, and make all required filings of such prospectus supplement or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;

(vii) furnish to each Participating Holder and each underwriter, if any, without charge, as many conformed copies as such Participating Holder or underwriter may reasonably request of the applicable Registration Statement and any amendment or post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference);


(viii) deliver to each Participating Holder and each underwriter, if any, without charge, as many copies of the applicable prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Participating Holder or underwriter may reasonably request (it being understood that the Company consents to the use of such prospectus or any amendment or supplement thereto by such holder of Common Stock and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such prospectus or any amendment or supplement thereto) and such other documents as Paulson or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities by Paulson or underwriter;

(ix) use its commercially reasonable efforts to register or qualify, or obtain exemption from registration or qualification for, all Registrable Securities by the time a Registration Statement is declared effective by the SEC under all applicable state securities or “blue sky” laws of such jurisdictions as Paulson, the holder of Registrable Securities or the managing underwriter or underwriter, if any, shall reasonably request in writing, keep each such registration or qualification or exemption effective and do any and all other acts and things that may be reasonably necessary or advisable to enable Paulson or the holder of Registrable Securities to consummate the disposition in each such jurisdiction of such Registrable Securities owned by Paulson or such holder; provided , however , that the Company shall not be required to (i) qualify generally to do business in any jurisdiction or to register as a broker or dealer in such jurisdiction where it would not otherwise be required to qualify but for this Section 4.4(a)(ix) and except as may be required by the Securities Act, (ii) subject itself to taxation in any such jurisdiction, or (iii) submit to the general service of process in any such jurisdiction;

(x) make such representations and warranties to the Participating Holders and the underwriters or agents, if any, in form, substance and scope as are customarily made by issuers in secondary underwritten public offerings;

(xi) enter into such customary agreements (including underwriting and indemnification agreements) and take all such other actions as the managing underwriter or underwriters, if any, reasonably request in order to expedite or facilitate the registration and disposition of such Registrable Securities;

(xii) obtain for delivery to the Participating Holders and to the underwriter or underwriters, if any, an opinion or opinions from counsel for the Company dated the effective date of the Registration Statement or, in the event of an Underwritten Offering, the date of the closing under the underwriting agreement, in customary form, scope and substance, which opinions shall be reasonably satisfactory to such Participating Holders or underwriters, as the case may be, and their respective counsel;

(xiii) in the case of an Underwritten Offering, obtain for delivery to the Company and the managing underwriter or underwriters, with copies to the Participating Holders, a cold comfort letter from the Company’s independent certified public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters as the managing underwriter or underwriters reasonably request, dated the date of execution of the underwriting agreement and brought down to the closing under the underwriting agreement;


(xiv) cooperate with each Participating Holder and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA;

(xv) use its reasonable best efforts to comply with all applicable securities laws and make available to its securityholders party hereto, as soon as reasonably practicable, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder;

(xvi) make available upon reasonable notice at reasonable times and for reasonable periods for inspection by any underwriter participating in any disposition to be effected pursuant to such Registration Statement and by any attorney, accountant or other agent retained by any such underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause all of the Company’s officers, directors and employees and the independent public accountants who have certified its financial statements to make themselves available to discuss the business of the Company and to supply all information reasonably requested by any such Person in connection with such Registration Statement as shall be necessary to enable them to exercise their due diligence responsibility; provided that any such Person gaining access to information regarding the Company pursuant to this Section 4.4(a)(xvi) shall agree to hold in strict confidence and shall not make any disclosure or use any information regarding the Company that the Company determines in good faith to be confidential, and of which determination such Person is notified, unless (w) the release of such information is requested or required (by deposition, interrogatory, requests for information or documents by a governmental entity, subpoena or similar process), (x) such information is or becomes publicly known other than through a breach of this or any other agreement of which such Person has knowledge, (y) such information is or becomes available to such Person on a non-confidential basis from a source other than the Company or (z) such information is independently developed by such Person;

(xvii) in the case of an Underwritten Offering, cause the senior executive officers of the Company to participate in the customary “road show” presentations that may be reasonably requested by the managing underwriter or underwriters in any such Underwritten Offering and otherwise to facilitate, cooperate with, and participate in each proposed offering contemplated herein and customary selling efforts related thereto;

(xviii) as of the effective date of any Registration Statement relating thereto, use its reasonable best efforts to cause all such Registrable Securities to be listed on the NASDAQ Global Select Market, the NASDAQ Global Market or the New York Stock Exchange; and

(xix) as of the effective date of any Registration Statement relating thereto, provide a transfer agent and registrar for all such Registrable Securities.

(b) The Company may require each Participating Holder to furnish to the Company such information, documents and instruments from such Participating Holder as the Company may from time to time reasonably request, including, but not limited to, a questionnaire, custody agreement, power of attorney, lock-up letters and underlying agreement.


Each Participating Holder agrees to furnish such information to the Company and to cooperate with the Company as reasonably necessary to enable the Company to comply with the provisions of this Agreement.

(c) Each Participating Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 4.4(a)(iv), such Participating Holder will forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement until such Participating Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 4.4(a)(iv), or until such Participating Holder is advised in writing by the Company that the use of the prospectus may be resumed, and if so directed by the Company, such Participating Holder shall deliver to the Company (at the Company’s expense) all copies of the prospectus covering such Registrable Securities, other than permanent file copies, then in such Participating Holder’s possession. In the event the Company shall give any such notice, the period during which the applicable Registration Statement is required to be maintained effective shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of Registrable Securities covered by such Registration Statement either receives the copies of the supplemented or amended prospectus contemplated by Section 4.4(a)(iv) or is advised in writing by the Company that the use of the prospectus may be resumed.

(d) Paulson shall not use any free writing prospectus (as defined in Rule 405) in connection with the sale of Registrable Securities without the prior consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed.

4.5 Indemnification .

(a) The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, Paulson and its officers, directors, employees, managers, members, partners and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) Paulson or such other indemnified Person from and against all losses, claims, damages, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses including all reasonable expenses incurred in enforcing this indemnity) (collectively, the “ Losses ”) caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of a material fact contained in any Registration Statement, prospectus or preliminary prospectus (including any issuer free writing prospectus) or any amendment thereof or supplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as the same are caused by any information furnished in writing to the Company by Paulson expressly for use therein. In connection with an Underwritten Offering and without limiting any of the Company’s other obligations under this Agreement, the Company shall also indemnify such underwriters, their officers, directors, employees and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) such underwriters or such other indemnified Person to the same extent as provided above with respect to the indemnification (and exceptions thereto) of Paulson. Reimbursements payable pursuant to the indemnification contemplated by this subsection (a) will be made by periodic


payments during the course of any investigation or defense, as and when bills are received or expenses incurred.

(b) In connection with any proposed registration in which Paulson is participating pursuant to this Agreement, Paulson agrees to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) the Company or such other indemnified Person against all Losses caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of material fact contained in the Registration Statement, prospectus or preliminary prospectus (including any issuer free writing prospectus) or any amendment thereof or supplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, but only to the extent that such untrue statement or omission contained in any information or affidavit so furnished in writing by Paulson to the Company for inclusion in such Registration Statement, prospectus or preliminary prospectus and has not been corrected in a subsequent writing prior to or concurrently with the sale of the securities to the Person asserting such loss, claim, damage, liability or expense. In no event shall the liability of Paulson hereunder be greater in amount than the dollar amount of the net cash proceeds actually received by Paulson upon the sale of the securities giving rise to such indemnification obligation. The Company and Paulson shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above with respect to information so furnished in writing by such Persons for inclusion in any prospectus or Registration Statement.

(c) Any Person entitled to indemnification hereunder will (i) give prompt (but in any event within 30 days after such Person has actual knowledge of the facts constituting the basis for indemnification) written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any delay or failure to so notify the indemnifying party shall relieve the indemnifying party of its obligations hereunder only to the extent, if at all, that the indemnifying party is actually prejudiced by reason of such delay or failure; provided, further, however, that any Person entitled to indemnification hereunder shall have the right to select and employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (a) the indemnifying party has agreed in writing to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim within a reasonable time after receipt of notice of such claim from the Person entitled to indemnification hereunder and employ counsel reasonably satisfactory to such Person or (c) in the reasonable judgment of any such Person, based upon advice of counsel, a conflict of interest may exist between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person). If such defense is not assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). An indemnified party shall not be required to consent to any settlement involving the imposition


of equitable remedies or involving the imposition of any obligations or admissions on such indemnified party other than financial obligations for which such indemnified party will be indemnified hereunder. No indemnifying party will be required to consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim in any one jurisdiction, unless the use of one counsel would be expected to give rise to a conflict of interest between such indemnified party and any other of such indemnified parties with respect to such claim, in which case the indemnifying party shall be obligated to pay the fees and expenses of each additional counsel.

(d) If for any reason the indemnification provided for in the preceding clauses 4.5(a) and 4.5(b) is unavailable to an indemnified party or insufficient to hold it harmless as contemplated by the preceding clauses 4.5(a) and 4.5(b), then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations, provided that Paulson shall not be required to contribute in an amount greater than the dollar amount of the net cash proceeds actually received by Paulson with respect to the sale of any securities under this Section 4. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

Section 5. Tag-Along Rights .

(a) Prior to the consummation of a Qualified Public Offering, if the Apollo Holders desire to effect any sale or transfer of shares of Common Stock representing more than 5% or more of the outstanding shares of Common Stock on a fully diluted basis in a single transaction or series of related transactions for value to any third party that is not an Affiliate of the Apollo Holders, other than in a Public Sale (a “ Tag-Along Transaction ”), it shall give written notice to Paulson offering Paulson the option to participate in such Tag-Along Transaction (a “ Sale Notice ”). If Paulson’s participation in the Tag-Along Transaction could require Paulson to make a filing under the HSR Act, the Sale Notice shall be delivered to Paulson at least seventy five (75) days prior to the date on which the Tag-Along Transaction is to be consummated; provided that once Paulson has complied with the requirements of the HSR Act and received the necessary approvals or otherwise determined no filing under the HSR Act is required with respect to its participation in the Tag-Along Transaction, the Apollo Holders may consummate the Tag-Along Transaction at any time thereafter. The Sale Notice shall set forth the material terms of the proposed Tag-Along Transaction and identify the contemplated transferee or Group.

(b) Paulson may, by written notice to the Apollo Holders (a “ Tag-Along Notice ”) delivered within ten (10) days after the date of the Sale Notice (Paulson delivering such timely notice being a “ Tag-Along Holder ”), elect to sell in such Tag-Along Transaction all or a


portion of the shares of Class A Common Stock held by Paulson, provided that, without the consent of the Apollo Holders, the Proportionate Percentage of shares to be sold by any Tag-Along Holder will not exceed the Proportionate Percentage of the shares of Common Stock that the Apollo Holders proposes to sell or transfer in the applicable Tag-Along Transaction.

(c) If Paulson does not deliver a timely Tag-Along Notice, then the Apollo Holders may thereafter consummate the Tag-Along Transaction, at the same sale price and on the same other terms and conditions as are described in the Sale Notice (including, without limitation, the number of shares of Common Stock being sold), for a period of one hundred twenty (120) days thereafter (subject to extension in the event of required regulatory approvals not having been obtained by such date but in any event no later than two hundred seventy (270) days after receipt of the Tag-Along Notice). In the event the Apollo Holders have not consummated the Tag-Along Transaction within such one hundred twenty (120) day period (subject to extension as provided above), the Apollo Holders shall not thereafter consummate a Tag-Along Transaction, without first providing a Sale Notice and an opportunity to Paulson to sell in the manner provided above. If Paulson gives the Apollo Holders a timely Tag-Along Notice, then the Apollo Holders shall use reasonable efforts to cause the prospective transferee or Group to agree to acquire all the shares of Class A Common Stock identified in all timely Tag-Along Notices, upon the same terms and conditions as are applicable to the shares of Common Stock held by the Apollo Holders. If such prospective transferee or Group is unable or unwilling to acquire all the shares of Common Stock proposed to be included in the Tag-Along Transaction upon such terms, then the Apollo Holders may elect either to cancel such Tag-Along Transaction or to allocate the maximum number of shares that such prospective transferee or Group is willing to purchase among the Apollo Holders and the Tag-Along Holders in the proportion that the Apollo Holders’ and each such Tag-Along Holder’s Proportionate Percentage bears to the total Proportionate Percentages of the Apollo Holders and the Tag-Along Holders. In connection with the Tag-Along Transaction, each party shall bear its own expenses.

(d) For purposes of this Section 5, any holder of shares of Common Stock who has a contractual right (other than, for the avoidance of doubt, pursuant to this Agreement) to participate in such Tag-Along Transaction or any other holder of Common Stock who is otherwise participating in such Tag-Along Transaction with the consent of the Apollo Holders, shall be deemed to be a “Tag-Along Holder” under this Section 5 (provided that, for the avoidance of doubt, this Section 5 (d) is not intended to nor shall it grant any rights to any Person to participate in any Tag-Along Transaction that is not otherwise granted pursuant to Section 5 (a)-(c) above).


Section 6. Board Composition . Subject to the satisfaction of applicable laws, rules and regulations, Paulson shall have the right to either (i) nominate one member of the Board (such appointed member, the “ Paulson Appointee ”) or (ii) designate one representative (the “ Paulson Observer ”) to attend all meetings of the Board as a non-voting observer; provided , however , that such rights to nominate the Paulson Appointee or designate the Paulson Observer shall not be assigned by Paulson to any other party (other than Affiliates of Paulson) and any purported assignment shall be void ab initio and of no effect. Paulson’s right to nominate the Paulson Appointee and designate the Paulson Observer shall terminate once Paulson is no longer a party to this Agreement. Upon such termination, Paulson shall promptly cause the Paulson Appointee to resign from the Board. The Company shall use its commercially reasonable efforts to maintain a directors and officer’s liability policy and shall indemnify and advance expenses to its directors and officers, including the Paulson Appointee, with respect to all acts or omissions by them in their capacities as such to the fullest extent permitted by the law and shall enter into an indemnification agreement with the Paulson Appointee.

Section 7. Dividends and Distributions . Prior to a Qualified Public Offering, the Company shall not, and shall cause Intermediate and Realogy not to, declare or pay any dividends or any other distributions on capital stock or redeem or repurchase any shares of capital stock without Paulson’s prior written consent; provided , however , that the Company shall be permitted to declare or pay any dividends or any other distributions on capital stock or redeem or repurchase any shares of capital stock, without Paulson’s prior written consent, to the extent such declaration, payment, distribution, redemption or repurchase is permitted by Section 4.07(b)(1), (2), (4), (5), (6), (8), (12), (13), (15), (16), (17) and (19) of the indentures for such Existing Notes.

Section 8. Related Party Transactions . Prior to a Qualified Public Offering, the Company shall not, and shall cause its direct and indirect subsidiaries not to, enter into any transaction or series of transactions with the Apollo Holders or any of their respective Affiliates if such transaction involves a consideration in excess of $10 million unless (A) Paulson gives its prior written consent or (B) such transaction is (i) contemplated by the Exchange Transactions, a Preemptive Event pursuant to which Paulson accepted and was provided with, or failed to accept the Preemptive Rights Offer, or pursuant to any agreements or arrangements entered into prior to the date hereof, (ii) expressly permitted by Section 4.11(b) (Transactions with Affiliates) of the indentures pursuant to which the New Notes are issued as supplemented, amended or otherwise modified from time to time, or (iii) not materially less favorable to the Company, Intermediate, Realogy or any of their respective direct or indirect subsidiaries than those that could have been obtained in a comparable transaction with an unrelated person, as evidenced by a resolution adopted in good faith by the majority of the Board approving such transaction and an officer’s certificate certifying that such transaction complies with clause (B)(iii) of this Section 8.

Section 9. Amendment of Convertible Notes . Without the prior written consent of Paulson, the Company will not enter into any amendment or supplement of the indenture that governs the Convertible Notes that would materially adversely affect Paulson for so long as Paulson holds at least 50% of the Convertible Notes it receives in the Exchange Offers.

Section 10. Ownership of Subsidiaries . Without the prior written consent of Paulson, (i) the Company shall not permit its Subsidiaries to effectuate an initial public offering of common


stock, (ii) the Company shall at all times own 100% of the capital stock of Intermediate and Intermediate shall at all times own, directly or indirectly 100% of the capital stock of Realogy and (iii) the Company shall not engage in any business or activity other than owning shares of Intermediate and Intermediate shall not engage in any business or activity other than owning shares of Realogy.

Section 11. HSR . To the extent necessary in order to enable Paulson from time to time to convert all of its then outstanding Convertible Notes into Class A Common Stock without filing a notification under the HSR Act at the time of the desired conversion, the Company will cooperate with and assist Paulson in completing an annual notification to comply with the requirements of the HSR Act. The Company shall provide Paulson with written notice at least seventy five (75) days prior to (i) a Change of Control (as such term is defined in the indentures pursuant to which the New Notes are issued), to the extent such Change of Control occurs prior to a Qualified Public Offering, and (ii) a Qualified Public Offering; provided that such Change of Control or Qualified Public Offering, as applicable, may be consummated within such seventy five (75) day period if Paulson has complied with the requirements of the HSR Act and received the necessary approvals or otherwise determined no filing under the HSR Act is required following conversion of its then outstanding Convertible Notes into Class A Common Stock. The Company shall also pay (a) any HSR Act filing fee incurred by Paulson under this Agreement and (b) all other fees and expenses (including reasonable attorneys’ fees of one counsel not to exceed $50,000 on an annual basis) incurred by Paulson in connection with such filings.

Section 12. Notices . In the event a notice or other document is required to be sent hereunder to the Company or to any party hereto, such notice or other document, if sent by mail, shall be sent by registered mail, return receipt requested (and by air mail in the event the addressee is not in the continental United States), to the party entitled to receive such notice or other document at the address set forth on Annex I hereto. Any such notice shall be effective and deemed received three (3) days after proper deposit in the mails, but actual notice shall be effective however and whenever received. Any party may effect a change of address for purposes of this Agreement by giving notice of such change to each of the other parties in the manner provided herein. Until such notice of change of address is properly given, the addresses set forth on Annex I shall be effective for all purposes.

Section 13. Amendment . This Agreement may be amended, modified, supplemented or waived from time to time by an instrument in writing signed by the Company, Realogy, Paulson and each Apollo Holder.

Section 14. Term; Termination . This Agreement shall only become effective on the Closing Date; provided that this Agreement shall automatically terminate if the Exchange Offers contemplated herein are terminated and abandoned. Unless earlier terminated by the mutual agreement of all the parties hereto, this Agreement shall terminate automatically upon the earlier of (i) the dissolution of the Company (unless the Company continues to exist after such dissolution as a limited liability company or in another form, whether incorporated in Delaware or another jurisdiction), (ii) with respect to Paulson, the first date on which Paulson ceases to hold, directly or indirectly, Registrable Securities (assuming all of the then outstanding Convertible Notes held by Paulson have been converted into shares of Class A Common Stock) representing at least 5% of the outstanding shares of Common Stock on a fully-diluted basis and


(iii) with respect to each Apollo Holder, the first date on which such Apollo Holder ceases to hold, directly or indirectly, any shares of Common Stock or Convertible Notes convertible into shares of Common Stock.

Section 15. Miscellaneous Provisions .

(a) THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE 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.

(b) The Company may, without the consent of Paulson, permit any holder that acquires in the Exchange Offers Convertible Notes convertible into shares of Class A Common Stock representing 10% or more of the outstanding shares of Common Stock on an “as converted” basis to become a party to this Agreement and to give such holder the same rights as Paulson under this Agreement.

(c) Whenever the context requires, the gender of all words used herein shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural.

(d) Except as provided in Section 14, any party to this Agreement who Disposes of all of his, her or its Common Stock and/or Convertible Notes in conformity with the terms of this Agreement shall cease to be a party to this Agreement and shall have no further rights hereunder other than rights to indemnification under Section 4, if applicable.

(e) Each party to this Agreement acknowledges that a remedy at law for any breach or attempted breach of this Agreement will be inadequate, agrees that each other party to this Agreement shall be entitled to specific performance and injunctive and other equitable relief in case of any such breach or attempted breach and further agrees to waive (to the extent legally permissible) any legal conditions required to be met for the obtaining of any such injunctive or other equitable relief (including posting any bond in order to obtain equitable relief).

(f) This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

(g) Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other


provision or any other jurisdiction, and such invalid, illegal or otherwise unenforceable provisions shall be null and void as to such jurisdiction. It is the intent of the parties, however, that any invalid, illegal or otherwise unenforceable provisions be automatically replaced by other provisions which are as similar as possible in terms to such invalid, illegal or otherwise unenforceable provisions but are valid and enforceable to the fullest extent permitted by law.

(h) Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and other documents as any other party hereto reasonably may request in order to carry out the provisions of this Agreement and the consummation of the transactions contemplated hereby.

(i) The parties to this Agreement agree that jurisdiction and venue in any action brought by any party hereto pursuant to this Agreement shall exclusively and properly lie in the Delaware State Chancery Court located in Wilmington, Delaware, or (in the event that such court denies jurisdiction) any federal or state court located in the State of Delaware. By execution and delivery of this Agreement each party hereto irrevocably submit to the jurisdiction of such courts for himself and in respect of his property with respect to such action. The parties hereto irrevocably agree that venue for such action would be proper in such court, and hereby waive any objection that such court is an improper or inconvenient forum for the resolution of such action. The parties further agree that the mailing by certified or registered mail, return receipt requested, of any process required by any such court shall constitute valid and lawful service of process against them, without necessity for service by any other means provided by statute or rule of court.

(j) No course of dealing between the Company, or its subsidiaries, and the other parties hereto (or any of them) or any delay in exercising any rights hereunder will operate as a waiver of any rights of any party to this Agreement. The failure of any party to enforce any of the provisions of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

(k) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHT OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS ENTERED INTO IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN.

(l) This Agreement sets forth the entire agreement of the parties hereto as to the subject matter hereof and supersedes all previous agreements among all or some of the


parties hereto, whether written, oral or otherwise, as to such subject matter. Unless otherwise provided herein, any consent required by any party hereto may be withheld by such party in its sole discretion.

(m) Except as otherwise expressly provided herein, no Person not a party to this Agreement, as a third party beneficiary or otherwise, shall be entitled to enforce any rights or remedies under this Agreement.

(n) If, and as often as, there are any changes in the Common Stock and/or Convertible Notes, as applicable, by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions of this Agreement, as may be required, so that the rights, privileges, duties and obligations hereunder shall continue with respect to the Common Stock or Convertible Notes as so changed.

(o) Without limiting anything in the Charter or the Bylaws, no director of the Company shall be personally liable to the Company or any party hereto as a result of any acts or omissions taken under this Agreement in good faith.

(p) Notwithstanding anything to the contrary contained herein, (i) each Apollo Holder may assign its rights or obligations, in whole or in part, under this Agreement to any member of the Apollo Holders, and such Person shall automatically become party to this Agreement and this Agreement shall be amended and restated to provide that such Person or a designee of such Person shall have the same rights and obligations of the Apollo Holders and the Apollo Holders hereunder and (ii) Paulson may assign its rights under Section 4.2 and Section 4.5 to any third party transferee in connection with any transfer (other than pursuant to a public offering) of at least $10 million aggregate principal amount of its Subject Securities, provided that such third party transferee executes and delivers to the Company a joinder agreement in the form set forth in Exhibit A and becomes a party to this Agreement.

* * * * *


This Agreement is executed by the parties hereto to be effective as of the Closing Date.

 

REALOGY CORPORATION
By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   EVP, CFO & Treasuer

 

DOMUS HOLDINGS CORP.
By:   /s/ Anthony E. Hull
  Name: Anthony E. Hull
  Title: EVP, CFO & Treasuer


DOMUS INVESTMENT HOLDINGS, LLC
By:  

Apollo Management VI, L.P.,

    its manager

By:  

AIF VI Management, LLC,

    its general partner

By:   /s/ Laurie Medley
  Name: Laurie Medley
  Title: Vice President

 

RCIV HOLDINGS, L.P. (CAYMAN)
By:  

Apollo Advisors VI (EH), L.P.,

    its general partner

By:  

Apollo Advisors VI (EH-GP), Ltd.,

    its general partner

By:   /s/ Laurie Medley
  Name: Laurie Medley
  Title: Vice President

 

APOLLO INVESTMENT FUND VI, L.P.
By:  

Apollo Advisors VI, L.P.,

    its general partner

By:  

Apollo Capital Management VI, LLC,

    its general partner

By:   /s/ Laurie Medley
  Name: Laurie Medley
  Title: Vice President

 

DOMUS CO-INVESTMENT HOLDINGS, LLC
By:  

Apollo Management VI, L.P.,

    its managing member

By:  

AIF VI Management, LLC,

    its general partner

By:   /s/ Laurie Medley
  Name: Laurie Medley
  Title: Vice President


RCIV HOLDINGS (LUXEMBOURG), S.A.R.L.
By:   /s/ Laurie Medley
  Name: Laurie Medley
  Title: Vice President


PAULSON & CO. INC.
By:   /s/ Stuart Merzer
  Name: Stuart Merzer
  Title: Authorized Signatory


ANNEX I

ADDRESSES FOR NOTICE

DOMUS HOLDINGS CORP.

DOMUS INVESTMENT HOLDINGS, LLC

RCIV HOLDINGS, L.P. (CAYMAN)

RCIV HOLDINGS (LUXEMBOURG) S.A.R.L.

APOLLO INVESTMENT FUND VI, L.P.

DOMUS CO-INVESTMENT HOLDINGS LLC

c/o Apollo Management VI, L.P.

9 West 57 th Street, 43 rd Floor

New York, NY 10019

Attention: Marc Becker

Email: Becker@apollolp.com

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Facsimile: (212) 735-2000

Attention: Stacy J. Kanter, Esq.

         Thomas W. Greenberg, Esq.

PAULSON & CO. INC.

1251 Avenue of the Americas, 50th Floor

New York, NY, 10020

Attn: Mr. Alex Blades

Telephone: (212) 956-2221

Fax: (212) 351-5887

with a copy (which shall not constitute notice) to:

Kleinberg, Kaplan, Wolff & Cohen, P.C.

551 Fifth Avenue

New York, NY 10176

Facsimile: (212) 986-8866

Attn: Max Karpel, Esq.

Jonathan Ain, Esq.


EXHIBIT A

JOINDER AGREEMENT

This Joinder Agreement (“ Joinder ”) is executed pursuant to the terms of the Investor Securityholders Agreement dated as of November 30, 2010, a copy of which is attached hereto (the “ Investor Securityholders Agreement ”), by the transferee (“ Transferee ”) executing this Joinder. By the execution of this Joinder, the Transferee agrees as follows:

 

  1. Acknowledgement . Transferee acknowledges that Transferee is acquiring or receiving from Paulson $10 million or more in aggregate principal amount of certain Convertible Notes convertible at any time at the option of the holders thereof, in whole or in part, into shares of Class A Common Stock of Domus Holdings Corp. a Delaware corporation (the “ Company ”). Capitalized terms used herein without definition are defined in the Investor Securityholders Agreement and are used herein with the same meanings set forth therein.

 

  2. Agreement to be Bound . Transferee by delivering this Joinder agrees that it shall have only the registration rights referenced in Section 4.2 of the Securityholders Agreement and agrees to become a party to the Securityholders Agreement.

 

  3. Further Agreement . The Transferee further acknowledges and agrees that it shall not have any rights under the Securityholders Agreement other than piggy-back registration rights and certain indemnification rights.

 

  4. Effectiveness . This Joinder shall take effect and Transferee shall be bound by Sections 4.2 and 4.5 of the Investor Securityholders Agreement immediately upon the execution hereof.

 

  5. Law . THIS ADOPTION WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS ADOPTION, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.


 
Name of Transferee
   
Signature
   
Date


Schedule III

Form of Avenue Stockholders Agreement


 

 

INVESTOR SECURITYHOLDERS AGREEMENT

by and among

DOMUS HOLDINGS CORP.,

REALOGY CORPORATION,

AVENUE CAPITAL MANAGEMENT II, L.P., and

the SECURITYHOLDERS that are parties hereto

DATED AS OF NOVEMBER 30, 2010

 

 

 


INVESTOR SECURITYHOLDERS AGREEMENT, dated as of November 30, 2010 (this “ Agreement ”), by and among Domus Holdings Corp., a Delaware corporation (the “ Company ”), Realogy Corporation, a Delaware corporation (“ Realogy ”), Avenue Capital Management II, L.P., a limited partnership (together with its affiliated funds, (“ Avenue ”)), and the Apollo Holders (as such term is hereinafter defined).

WHEREAS, the Company owns, directly or indirectly, all of the outstanding equity interests of Realogy;

WHEREAS, Realogy has previously issued 10.50% Senior Notes due 2014, 11.00%/11.75% Senior Toggle Notes due 2014, and 12.375% Senior Subordinated Notes due 2015 (collectively, the “ Existing Notes ”);

WHEREAS, Avenue will exchange its Existing Notes for new 11.00% Senior Cash Notes due 2017, new 11.50% Senior Cash Notes due 2017, and new 12.875% Senior Subordinated Notes due 2018 (collectively, the “ Extended Maturity Notes ” and together with the Convertible Notes, the “ New Notes ”) and 11.00% Series A Convertible Notes due 2018 (the “ Series A Convertible Notes ”), 11.00% Series B Convertible Notes due 2018 (the “ Series B Convertible Notes ”) and 11.00% Series B Convertible Notes due 2018 (the “ Series C Convertible Notes ” and, together with the Series A Convertible Notes and the Series B Convertible Notes, the “ Convertible Notes ”) convertible at any time at the option of the holders thereof, in whole or in part, into shares of Class A common stock of the Company, par value $0.01 per share (the foregoing transactions, collectively, the “ Exchange Transactions ”);

WHEREAS, RCIV Holdings (Luxembourg) s.à.r.l., a Luxembourg société à responsabilité limitée (“ RCIV Luxco ”), a wholly owned subsidiary of RCIV Holdings, L.P, a Cayman Islands exempted limited partnership (“ RCIV Cayman ”), owns Existing Notes and will own Convertible Notes convertible into an equity interest in the Company upon consummation of the Exchange Transactions;

WHEREAS, Apollo Investment Fund VI, LP, a Delaware limited partnership (“ AIF VI ”), Domus Investment Holdings, LLC, a Delaware limited liability company (“ Domus Investment ”) and Domus Co-Investment Holdings, LLC, a Delaware limited liability company (“ Co-Investment Holdings ”), each own capital stock of the Company; and

WHEREAS, each of the Company, the Apollo Holders and Avenue deem it to be in their respective best interests to enter into this Agreement to set forth their agreements with respect to certain matters concerning the Company.

NOW, THEREFORE, in consideration of the premises and of the mutual consents and obligations hereinafter set forth, intending to be legally bound, the parties hereto hereby agree as follows:

Section 1. Definitions.

As used in this Agreement:

Affiliate ” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. 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.

 

2


Agreement ” has the meaning set forth in the preamble.

AIF VI ” has the meaning set forth in the preamble.

Apollo Holders ” means AIF VI, Domus Investment, RCIV Cayman, RCIV Luxco and Co-Investment Holdings, collectively with each of their respective Affiliates (including, for avoidance of doubt, any syndication vehicles).

Avenue ” has the meaning set forth in the recitals.

Class A Common Stock ” means the Class A common stock of the Company, par value $.01 per share.

Class B Common Stock ” means the Class B common stock of the Company, par value $.01 per share.

Closing Date ” means the date of the closing of the Exchange Transactions.

Co-Investment Holdings ” has the meaning set forth in the preamble.

Common Stock ” means the Class A Common Stock, and the Class B Common Stock, collectively, and any class of common stock into which the Class A common stock or Class B common stock may be reclassified, converted or exchanged.

Company ” has the meaning set forth in the preamble.

Company Offered Securities ” has the meaning set forth in Section 2.

Convertible Notes ” has the meaning set forth in the preamble.

Disposition ” means any direct or indirect transfer, assignment, sale, gift, pledge, hypothecation or other encumbrance, or any other disposition, of Subject Securities (or any interest therein or right thereto) or of all or part of the voting power (other than the granting of a revocable proxy) associated with the Subject Securities (or any interest therein) whatsoever, or any other transfer of beneficial ownership of Subject Securities whether voluntary or involuntary, including, without limitation (a) as a part of any liquidation of a securityholder’s assets or (b) as a part of any reorganization of a securityholder pursuant to the United States, state, foreign or other bankruptcy law or other similar debtor relief laws. “ Dispose ” shall have a correlative meaning.

Domus Investment ” has the meaning set forth in the preamble.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

Exchange Transactions ” has the meaning set forth in the recitals.

Existing Notes ” has the meaning set forth in the recitals.

Extended Maturity Notes ” has the meaning set forth in the recitals.

Group ” has the meaning ascribed to such term in Section 13(d)(3) of the Exchange Act.

 

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Intermediate ” shall mean Domus Intermediate Holdings Corp., a Delaware corporation.

IPO ” means the initial public offering of shares of the Common Stock pursuant to an effective Registration Statement under the Securities Act.

Lock-Up Period ” has the meaning set forth in Section 3.1(c).

Lock-Up Exceptions ” has the meaning set forth in Section 3.1(c).

Losses ” has the meaning set forth in Section 3.3(a).

New Notes ” has the meaning set forth in the recitals.

Participating Holders ” has the meaning set forth in Section 3.2(a).

Person ” shall be construed broadly and shall include, without limitation, an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity or any department, agency or political subdivision thereof or any other entity.

Piggy-Back Notice ” has the meaning set forth in Section 3.1(a).

Piggy-Back Registration Right ” has the meaning set forth in Section 3.1(a)

Preemptive Event ” has the meaning set forth in Section 2.

Preemptive Rights Offer ” has the meaning set forth in Section 2.

Preemptive Rights Offer Notice ” has the meaning set forth in Section 2.

Pro Rata Debt Ownership ” shall be a fraction of the Company Offered Securities determined by dividing (A) the aggregate principal amount of New Notes then owned by Avenue plus the aggregate principal amount of Convertible Notes converted into Class A Common Stock by Avenue to the extent such Class A Common Stock is still held by Avenue by (B) $[ ] billion (which is the total outstanding indebtedness of the Company and Realogy on a consolidated basis as of the date of this Agreement).

Proportionate Debt Percentage ” shall mean a number (expressed as a percentage) equal to a fraction, the numerator of which is the aggregate principal amount of the debt proposed to be purchased by the holder of the Existing Notes or New Notes in connection with a debt financing to third parties and the denominator of which is the aggregate principal amount of the Existing Notes or New Notes owned by such holder.

Proportionate Percentage ” with respect to any holder of Common Stock, shall mean a number (expressed as a percentage) equal to a fraction, the numerator of which is the total number of shares of Common Stock proposed to be transferred by such holder in a proposed Disposition and the denominator of which is the total number of shares of Common Stock owned by such holder.

Public Sale ” means any sale, occurring simultaneously with or after an IPO, of Common Stock to the public pursuant to an offering registered under the Securities Act or to the public in the manner described by the provisions of Rule 144 promulgated thereunder, other than an offering relating to employee incentive plans.

 

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Qualified Public Offering ” means (a) an Underwritten Offering of shares of Class A Common Stock by the Company or any selling securityholders pursuant to an effective Registration Statement filed by the Company with the SEC (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 Class A 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 $200 million and (b) the listing of Company Class A Common Stock on the NASDAQ Global Select Market, the NASDAQ Global Market, the New York Stock Exchange or any successor exchange to the foregoing.

RCIV Cayman ” has the meaning set forth in the preamble.

RCIV Luxco ” has the meaning set forth in the preamble.

Realogy ” has the meaning set forth in the recitals.

Registrable Securities ” shall mean (i) the shares of Class A Common Stock issued upon the conversion of the Convertible Notes, (ii) the shares of Class A Common Stock acquired in connection with the exercise of preemptive rights in accordance with Section 2, (iii) any and all shares of Common Stock issued or issuable with respect to Registrable Securities by way of stock dividend or a stock split; provided, that any Registrable Securities shall cease to be Registrable Securities when (A) a Registration Statement with respect to the sale of such Registrable Securities has been declared effective under the Securities Act and such Registrable Securities have been disposed of pursuant to such Registration Statement, (B) such Registrable Securities have been disposed of in reliance upon Rule 144 (or any similar provision then in force) under the Securities Act or (C) except for a transfer in accordance with Section 8(p), such Registrable Securities shall have been otherwise transferred to a third party; and provided, further, that any securities that have ceased to be Registrable Securities shall not thereafter become Registrable Securities and any security that is issued or distributed in respect of securities that have ceased to be Registrable Securities is not a Registrable Security and (iv) any shares of Common Stock required to be registered by the Company on behalf of any other Person possessing registration rights pursuant to another agreement in which the Company had granted such rights.

Registration Statement ” means any shelf registration statement or other registration statement filed with the SEC with respect to the Common Stock.

Sale Notice ” has the meaning set forth in Section 4.

SEC ” means the Securities and Exchange Commission.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Series A Convertible Notes ” has the meaning set forth in the recitals.

Series B Convertible Notes ” has the meaning set forth in the recitals.

Series C Convertible Notes ” has the meaning set forth in the recitals.

 

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Subject Securities ” means shares of Class A Common Stock, the Convertible Notes and any shares of Class A Common Stock issuable upon conversion thereof.

Tag-Along Holder ” has the meaning set forth in Section 4(b).

Tag-Along Notice ” has the meaning set forth in Section 4(b).

Tag-Along Transaction ” has the meaning set forth in Section 4(a)

Underwritten Offering ” means a sale of shares of Common Stock to an underwriter for reoffering to the public.

Section 2. Preemptive Events . If any time prior to (but not including) a Qualified Public Offering, (i) the Company or Realogy proposes to issue or sell any equity securities (or securities convertible into, issuable upon exercise of or exchangeable for any such equity securities) (not including (a) securities issued pursuant to any equity compensation plans, (b) securities issued as a dividend or distribution or upon any stock split, recapitalization or other subdivision or combination of securities, (c) securities issued upon the exercise, conversion or exchange of any options, warrants or convertible securities issued prior to the date hereof or for which Avenue has had the opportunity to subscribe for pursuant to its preemptive rights (and which shall include the Convertible Notes), (d) securities issued (other than to an Apollo Holder) in connection with (X) the funding of an acquisition (whether by stock sale, merger, recapitalization, asset purchase or otherwise) or (Y) a joint venture or strategic alliance) or (ii) the Company or Realogy proposes to issue or sell debt to any Affiliate of Realogy or the Company (for the avoidance of doubt, such Affiliate of Realogy or the Company shall not include the Company, Realogy, Intermediate or any subsidiary of Realogy) (collectively, “ Company Offered Securities ”), the Company shall give notice in writing (the “ Preemptive Rights Offer Notice ”) to Avenue of such proposed issuance or sale (a “ Preemptive Event ”). The Preemptive Rights Offer Notice shall describe the proposed transaction, identify the proposed purchaser(s), and contain an offer (the “ Preemptive Rights Offer ”) to sell to Avenue, at the same price, on the same terms and for the same consideration to be paid by the proposed purchaser(s). With respect to clause (i) of this Section 2, Avenue shall have the right to participate in the Preemptive Event up to its respective pro rata fully-diluted portion of its equity ownership (which shall be a fraction of the Company Offered Securities determined by dividing (A) the number of shares of Common Stock then owned by Avenue on a fully-diluted basis assuming the conversion of all of its Convertible Notes by (B) the number of shares of Common Stock then outstanding (before giving effect to the Preemptive Event) on a fully-diluted basis assuming, among other things, the conversion of all Convertible Notes then outstanding. With respect to clause (ii) of this Section 2, Avenue shall have the right to participate in the Preemptive Event up to its Pro Rata Debt Ownership. The Preemptive Rights Offer Notice shall be made fifteen (15) days prior to the relevant issuance or sale. If Avenue fails to accept in writing the Preemptive Rights Offer by the tenth (10th) day after the Company’s delivery of the Preemptive Rights Offer Notice, Avenue shall have no further rights with respect to the proposed transaction; provided, however, that if any of the terms of the Preemptive Event, taken as a whole, materially change after the date of the Preemptive Rights Offer Notice, then the Company shall be required to give a new Preemptive Rights Offer Notice and Avenue shall have an additional ten (10) days to accept in writing the Preemptive Rights Offer. If at any time prior to a Qualified Public Offering, the Company or Realogy proposes to undertake a debt financing to third parties and the Apollo

 

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Holders do not participate in such debt financing, then the Company shall use its commercially reasonable efforts to allow Avenue to participate, up to its Pro Rata Debt Ownership, at the same price, on the same terms and for the same consideration as other participants in the financing; provided however that if the Apollo Holders participate in such financing, then Avenue shall have the right to participate in the financing at the same price, on the same terms and for the same consideration as the Apollo Holders, provided that the Proportionate Debt Percentage of debt to be purchased by Avenue shall not exceed the Proportionate Debt Percentage of debt that the Apollo Holders elect to acquire in such debt financing to third parties.

Section 3. Registration Rights.

3.1 Piggy-Back Registration Rights .

(h) Participation . Subject to Section 3.1(b), if at any time the Company proposes to register any of its shares of Common Stock under the Securities Act (other than a registration on Form S-4 or S-8 or any successor form to such Forms or any registration of securities as it relates to an offering and sale to management of the Company pursuant to any employee stock plan or other employee benefit plan arrangement or pursuant to a shelf registration statement), whether for its own account or for the account of one or more stockholders of the Company, and the registration form to be used may be used for any registration of Registrable Securities, then the Company shall give prompt written notice (the “ Piggy-Back Notice ”) to Avenue of its intention to effect such a registration and, subject to Section 3.1(b), shall include in such registration all Registrable Securities with respect to which the Company has received a written request from Avenue for inclusion therein within 15 days after the receipt of the Piggy-Back Notice. The Piggy-Back Notice shall offer Avenue the right, subject to Section 3.1(b) (the “ Piggy-Back Registration Right ”), to register such number of shares of Registrable Securities as Avenue may request and shall set forth (i) the anticipated filing date of such Registration Statement and (ii) the number of shares of Class A Common Stock that is proposed to be included in such Registration Statement.

(i) Underwriters’ Cutback . Notwithstanding the foregoing, if a registration pursuant to this Section 3.1 involves an Underwritten Offering and the managing underwriter or underwriters of such proposed Underwritten Offering advises the Company that the total or kind of securities which Avenue and any other persons or entities intend to include in such offering would be reasonably likely to adversely affect the price, timing or distribution of the securities offered in such offering, then the number of securities proposed to be included in such registration shall be allocated among the Company and all of the selling securityholders, such that the number of securities that each such Person shall be entitled to sell in the Underwritten Offering shall be included in the following order:

(i) In the event of an exercise by any Person possessing demand rights pursuant to another agreement in which the Company has granted demand rights:

(1) first, the Registrable Securities held by the Person exercising a demand right pursuant to any other agreement in which the Company has granted demand rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person in connection with such registration;

 

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(2) second, the Registrable Securities held by the Persons requesting their Registrable Securities to be included in such registration pursuant to the terms of Section 3.1(a) or pursuant to any other agreement in which the Company has granted piggy-back registration rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person at the time of such registration; and

(3) third, the securities to be issued and sold by the Company in such registration.

(ii) In all other cases:

(1) first, the securities to be issued and sold by the Company in such registration; and

(2) second, the Registrable Securities held by the Persons requesting their Registrable Securities to be included in such registration pursuant to the terms of Section 3.1(a) or pursuant to any other agreement in which the Company has granted Piggy-Back registration rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person at the time of such registration.

Notwithstanding anything to the contrary set forth in this Section 3.1(b), if the managing underwriter for an Underwritten Offering advises the Company that the inclusion of the number of shares of Common Stock proposed to be included in any registration by any particular Person would interfere with the successful marketing (including pricing) of such shares to be offered thereby, then the number of such shares proposed to be included in such registration by such Person shall be reduced to the lower of the number of such shares that the managing underwriter advises that such Person may sell in the Underwritten Offering and the number of such shares calculated pursuant to the foregoing.

(j) Lock-up . If the Company at any time shall register shares of Common Stock under the Securities Act for sale to the public in an underwritten offering and if requested by the lead managing underwriter, Avenue agrees not to sell publicly, make any short sale of, grant any option for the purchase of, or otherwise dispose of, any capital stock of the Company without the prior written consent of the lead managing underwriter, during a period of not more than ninety (90) days (or up to one hundred eighty (180) days if requested by the lead managing underwriter in connection with a Qualified Public Offering) commencing on the effective date of the Registration Statement (the “Lock-Up Period”); provided, however, that, if any holders of Registrable Securities shall be subject to a shorter period or receives more advantageous terms relating to the Lock-Up Period, then the Lock-Up Period shall be such shorter period and also on such more advantageous terms and Avenue shall be released from its obligations under this clause to the extent any other holder of Registrable Securities is released. Notwithstanding the foregoing, Avenue shall be entitled to transfer any shares of Class A Common Stock (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to Affiliates of Avenue where such Affiliates agree to be bound in writing by the restrictions set forth herein, (iii) with the prior written consent of the Company, (iv) to a nominee or custodian of a Person to whom a disposition or transfer would be permitted hereunder, provided that such nominee or custodian agrees to be bound in writing by the restrictions set forth herein, (v) following the consummation of a Qualified Public Offering, in transactions relating to shares of Common Stock or other securities acquired in open market

 

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transactions, or (vi) to any wholly-owned subsidiary or any stockholders, partners, members or similar persons of Avenue, provided that such Person agrees to be bound in writing by the restrictions set forth herein; provided that, in the case of this clause (i), (iv), (v) and (vi), such transfers do not give rise to a requirement to disclose in any public report or filing with the SEC and Avenue does not otherwise voluntarily effect any public filing or report regarding such transfers (collectively, the “ Lock-Up Exceptions ”). In addition, if requested by the lead managing underwriter, in connection with a public offering, Avenue shall enter into a customary lock-up agreement with the lead managing underwriter. If the Company notifies Avenue of its intention to consummate a Qualified Public Offering, on its own behalf or in connection with an exercise by any Person possessing demand rights pursuant to another agreement in which the Company has granted demand rights, Avenue agrees that it shall not sell publicly, make any short sale of, grant any option for the purchase of, or otherwise dispose, any shares of Class A Common Stock (except, in each case, as part of the Qualified Public Offering, if permitted) during the period beginning on the delivery or receipt of such notice until the expiration of the Lock-Up Period, subject to the Lock-Up Exceptions.

(k) Company Control . The Company may decline to file a Registration Statement after giving the Piggy-Back Notice, or withdraw a Registration Statement after filing and after such Piggy-Back Notice, but prior to the effectiveness of the Registration Statement, provided that the Company shall promptly notify Avenue in writing of any such action and provided further that the Company shall bear all reasonable expenses incurred by Avenue or otherwise in connection with such withdrawn Registration Statement.

(l) Participation in Underwritten Offerings . No Person may participate in any Underwritten Offering under this Section 3.1 unless such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Persons entitled to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements, lock-ups and other documents required for such underwriting arrangements. Nothing in this Section 3.1(e) shall be construed to create any additional rights regarding the Piggy-Back registration of Registrable Securities in any Person otherwise than as set forth herein.

(m) Expenses . The Company will pay all registration fees and other reasonable expenses in connection with each registration of Registrable Securities requested pursuant to this Section 3, including reasonable fees and expenses of one counsel to the Participating Holders which shall not exceed $100,000; provided, that each Participating Holder shall pay any remaining counsel fees and expenses and all applicable underwriting fees, discounts and similar charges (pro rata based on the securities sold).

(n) Publicly Available Information . If the Company is not required to file reports under the Securities Act or the Exchange Act, the Company will make publicly available such necessary information for so long as necessary to permit sales pursuant to Rule 144 under the Securities Act.

3.2 Registration Rights Procedures .

 

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(o) In connection with the Company’s obligation under Section 3.1 to file a Registration Statement, the Company shall use its reasonable best efforts to cause such Registration Statement to become effective to permit the sale of such Registrable Securities in accordance with the intended method or methods of distribution thereof as expeditiously as reasonably practicable, and in connection therewith the Company shall:

(i) prepare the required Registration Statement including all exhibits and financial statements required under the Securities Act to be filed therewith, and before filing a Registration Statement or prospectus, or any amendments or supplements thereto, (x) furnish to the underwriters, if any, and to the holders of Registrable Securities covered by the applicable Registration Statement (“ Participating Holders ”), copies of all documents prepared to be filed, which documents shall be subject to the review of such underwriters and the Participating Holders and their respective counsel and make such changes to such documents as are reasonably requested by the Participating Holders and (y) except in the case of a registration under Section 3.1, not file any Registration Statement hereunder or prospectus or amendments or supplements thereto to which the underwriters, if any, or the Participating Holders shall reasonably object;

(ii) prepare and file with the SEC such pre- and post-effective amendments to such Registration Statement and supplements to the prospectus as may be (x) reasonably requested by any other Participating Holder (to the extent such request relates to information relating to such holder), or (z) necessary to keep such registration effective for the period of time required by this Agreement, and comply with provisions of the applicable securities laws with respect to the sale or other disposition of all securities covered by such Registration Statement during such period in accordance with the intended method or methods of disposition by the sellers thereof set forth in such Registration Statement;

(iii) notify the Participating Holders and the managing underwriter or underwriters, if any, and (if requested) confirm such advice in writing and provide copies of the relevant documents, as soon as reasonably practicable after notice thereof is received by the Company (a) when the applicable Registration Statement or any amendment thereto has been filed or becomes effective, and when the applicable prospectus or any amendment or supplement to such prospectus has been filed, (b) of any written comments by the SEC or any request by the SEC or any other federal or state governmental authority for amendments or supplements to such Registration Statement or such prospectus or for additional information, (c) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or any order by the SEC or any other regulatory authority preventing or suspending the use of any preliminary or final prospectus or the initiation or threatening of any proceedings for such purposes, (d) if, at any time, the representations and warranties of the Company in any applicable underwriting agreement cease to be true and correct in any material respect, and (e) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;

(iv) promptly notify the Participating Holders and the managing underwriter or underwriters, if any, when the Company becomes aware of the happening of any event as a result of which the applicable Registration Statement or the prospectus included in

 

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such Registration Statement (as then in effect) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of such prospectus and any preliminary prospectus, in light of the circumstances under which they were made) not misleading or, if for any other reason it shall be necessary during such time period to amend or supplement such Registration Statement or prospectus in order to comply with the Securities Act and, in either case as promptly as reasonably practicable thereafter, prepare and file with the SEC, and furnish without charge to the Participating Holders and the managing underwriter or underwriters, if any, an amendment or supplement to such Registration Statement or prospectus which shall correct such misstatement or omission or effect such compliance;

(v) use its reasonable best efforts to prevent, or obtain the withdrawal of, any stop order or other order suspending the use of any preliminary or final prospectus;

(vi) promptly incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters reasonably believes should be included therein relating to the plan of distribution with respect to such Registrable Securities, and make all required filings of such prospectus supplement or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;

(vii) furnish to each Participating Holder and each underwriter, if any, without charge, as many conformed copies as such Participating Holder or underwriter may reasonably request of the applicable Registration Statement and any amendment or post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference);

(viii) deliver to each Participating Holder and each underwriter, if any, without charge, as many copies of the applicable prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Participating Holder or underwriter may reasonably request (it being understood that the Company consents to the use of such prospectus or any amendment or supplement thereto by such holder of Common Stock and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such prospectus or any amendment or supplement thereto) and such other documents as Avenue or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities by Avenue or underwriter;

(ix) use its commercially reasonable efforts to register or qualify, or obtain exemption from registration or qualification for, all Registrable Securities by the time a Registration Statement is declared effective by the SEC under all applicable state securities or “blue sky” laws of such jurisdictions as Avenue, the holder of Registrable Securities or the managing underwriter or underwriter, if any, shall reasonably request in writing, keep each such registration or qualification or exemption effective and do any and all other acts and things that may be reasonably necessary or advisable to enable Avenue or the holder of Registrable Securities to consummate the disposition in each such jurisdiction of such Registrable Securities owned by Avenue or such holder; provided, however, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction or to register as a broker or dealer in such jurisdiction where it would not otherwise be required to qualify but for this Section 3.2(a)(ix) and

 

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except as may be required by the Securities Act, (ii) subject itself to taxation in any such jurisdiction, or (iii) submit to the general service of process in any such jurisdiction;

(x) make such representations and warranties to the Participating Holders and the underwriters or agents, if any, in form, substance and scope as are customarily made by issuers in secondary underwritten public offerings;

(xi) enter into such customary agreements (including underwriting and indemnification agreements) and take all such other actions as the managing underwriter or underwriters, if any, reasonably request in order to expedite or facilitate the registration and disposition of such Registrable Securities;

(xii) obtain for delivery to the Participating Holders and to the underwriter or underwriters, if any, an opinion or opinions from counsel for the Company dated the effective date of the Registration Statement or, in the event of an Underwritten Offering, the date of the closing under the underwriting agreement, in customary form, scope and substance, which opinions shall be reasonably satisfactory to such Participating Holder or underwriters, as the case may be, and their respective counsel;

(xiii) in the case of an Underwritten Offering, obtain for delivery to the Company and the managing underwriter or underwriters, with copies to the Participating Holders, a cold comfort letter from the Company’s independent certified public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters as the managing underwriter or underwriters reasonably request, dated the date of execution of the underwriting agreement and brought down to the closing under the underwriting agreement;

(xiv) cooperate with each Participating Holder and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA;

(xv) use its reasonable best efforts to comply with all applicable securities laws and make available to its securityholders party hereto, as soon as reasonably practicable, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder;

(xvi) make available upon reasonable notice at reasonable times and for reasonable periods for inspection by any underwriter participating in any disposition to be effected pursuant to such Registration Statement and by any attorney, accountant or other agent retained by any such underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause all of the Company’s officers, directors and employees and the independent public accountants who have certified its financial statements to make themselves available to discuss the business of the Company and to supply all information reasonably requested by any such Person in connection with such Registration Statement as shall be necessary to enable them to exercise their due diligence responsibility; provided that any such Person gaining access to information regarding the Company pursuant to this Section 3.2(a)(xvi) shall agree to hold in strict confidence and shall not make any disclosure

 

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or use any information regarding the Company that the Company determines in good faith to be confidential, and of which determination such Person is notified, unless (w) the release of such information is requested or required (by deposition, interrogatory, requests for information or documents by a governmental entity, subpoena or similar process), (x) such information is or becomes publicly known other than through a breach of this or any other agreement of which such Person has knowledge, (y) such information is or becomes available to such Person on a non-confidential basis from a source other than the Company or (z) such information is independently developed by such Person;

(xvii) in the case of an Underwritten Offering, cause the senior executive officers of the Company to participate in the customary “road show” presentations that may be reasonably requested by the managing underwriter or underwriters in any such Underwritten Offering and otherwise to facilitate, cooperate with, and participate in each proposed offering contemplated herein and customary selling efforts related thereto;

(xviii) as of the effective date of any Registration Statement relating thereto, use its reasonable best efforts to cause all such Registrable Securities to be listed on the NASDAQ Global Select Market, the NASDAQ Global Market or the New York Stock Exchange; and

(xix) as of the effective date of any Registration Statement relating thereto, provide a transfer agent and registrar for all such Registrable Securities.

(p) The Company may require each Participating Holder to furnish to the Company such information, documents and instruments from such Participating Holder as the Company may from time to time reasonably request, including, but not limited to, a questionnaire, custody agreement, power of attorney, lock-up letters and underlying agreement. Each Participating Holder agrees to furnish such information to the Company and to cooperate with the Company as reasonably necessary to enable the Company to comply with the provisions of this Agreement.

(q) Each Participating Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.2(a)(iv), such Participating Holder will forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement until such Participating Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3.2(a)(iv), or until such Participating Holder is advised in writing by the Company that the use of the prospectus may be resumed, and if so directed by the Company, such Participating Holder shall deliver to the Company (at the Company’s expense) all copies of the prospectus covering such Registrable Securities, other than permanent file copies, then in such Participating Holder’s possession. In the event the Company shall give any such notice, the period during which the applicable Registration Statement is required to be maintained effective shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of Registrable Securities covered by such Registration Statement either receives the copies of the supplemented or amended prospectus contemplated by Section 3.2(a)(iv) or is advised in writing by the Company that the use of the prospectus may be resumed.

 

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(r) Avenue shall not use any free writing prospectus (as defined in Rule 405) in connection with the sale of Registrable Securities without the prior consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed.

3.3 Indemnification .

(s) The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, Avenue and its officers, directors, employees, managers, members, partners and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) Avenue or such other indemnified Person from and against all losses, claims, damages, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses including all reasonable expenses incurred in enforcing this indemnity) (collectively, the “ Losses ”) caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of a material fact contained in any Registration Statement, prospectus or preliminary prospectus (including any issuer free writing prospectus) or any amendment thereof or supplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as the same are caused by any information furnished in writing to the Company by Avenue expressly for use therein. In connection with an Underwritten Offering and without limiting any of the Company’s other obligations under this Agreement, the Company shall also indemnify such underwriters, their officers, directors, employees and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) such underwriters or such other indemnified Person to the same extent as provided above with respect to the indemnification (and exceptions thereto) of Avenue. Reimbursements payable pursuant to the indemnification contemplated by this subsection (a) will be made by periodic payments during the course of any investigation or defense, as and when bills are received or expenses incurred.

(t) In connection with any proposed registration in which Avenue is participating pursuant to this Agreement, Avenue agrees to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) the Company or such other indemnified Person against all Losses caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of material fact contained in the Registration Statement, prospectus or preliminary prospectus (including any issuer free writing prospectus) or any amendment thereof or supplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, but only to the extent that such untrue statement or omission contained in any information or affidavit so furnished in writing by Avenue to the Company for inclusion in such Registration Statement, prospectus or preliminary prospectus and has not been corrected in a subsequent writing prior to or concurrently with the sale of the securities to the Person asserting such loss, claim, damage, liability or expense. In no event shall the liability of Avenue hereunder be greater in amount than the dollar amount of the net cash proceeds actually received by Avenue upon the sale of the securities giving rise to such indemnification obligation. The Company and Avenue shall be entitled to receive indemnities from underwriters, selling brokers, dealer

 

14


managers and similar securities industry professionals participating in the distribution, to the same extent as provided above with respect to information so furnished in writing by such Persons for inclusion in any prospectus or Registration Statement.

(u) Any Person entitled to indemnification hereunder will (i) give prompt (but in any event within 30 days after such Person has actual knowledge of the facts constituting the basis for indemnification) written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any delay or failure to so notify the indemnifying party shall relieve the indemnifying party of its obligations hereunder only to the extent, if at all, that the indemnifying party is actually prejudiced by reason of such delay or failure; provided, further, however, that any Person entitled to indemnification hereunder shall have the right to select and employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (a) the indemnifying party has agreed in writing to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim within a reasonable time after receipt of notice of such claim from the Person entitled to indemnification hereunder and employ counsel reasonably satisfactory to such Person or (c) in the reasonable judgment of any such Person, based upon advice of counsel, a conflict of interest may exist between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person). If such defense is not assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). An indemnified party shall not be required to consent to any settlement involving the imposition of equitable remedies or involving the imposition of any obligations or admissions on such indemnified party other than financial obligations for which such indemnified party will be indemnified hereunder. No indemnifying party will be required to consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim in any one jurisdiction, unless the use of one counsel would be expected to give rise to a conflict of interest between such indemnified party and any other of such indemnified parties with respect to such claim, in which case the indemnifying party shall be obligated to pay the fees and expenses of each additional counsel.

(v) If for any reason the indemnification provided for in the preceding clauses 3.3(a) and 3.3(b) is unavailable to an indemnified party or insufficient to hold it harmless as contemplated by the preceding clauses 3.3(a) and 3.3(b), then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations, provided that Avenue shall not be required to contribute in an amount greater

 

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than the dollar amount of the net cash proceeds actually received by Avenue with respect to the sale of any securities under this Section 4. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

Section 4. Tag-Along Rights .

(a) Prior to the consummation of a Qualified Public Offering, if the Apollo Holders desire to effect any sale or transfer of shares of Common Stock representing more than 5% or more of the outstanding shares of Common Stock on a fully diluted basis in a single transaction or series of related transactions for value to any third party that is not an Affiliate of the Apollo Holders, other than in a Public Sale (a “ Tag-Along Transaction ”), it shall give written notice to Avenue offering Avenue the option to participate in such Tag-Along Transaction (a “ Sale Notice ”). The Sale Notice shall set forth the material terms of the proposed Tag-Along Transaction and identify the contemplated transferee or Group.

(b) Avenue may, by written notice to the Apollo Holders (a “ Tag-Along Notice ”) delivered within ten (10) days after the date of the Sale Notice (Avenue delivering such timely notice being a “ Tag-Along Holder ”), elect to sell in such Tag-Along Transaction all or a portion of the shares of Class A Common Stock held by Avenue, provided that, without the consent of the Apollo Holders, the Proportionate Percentage of shares to be sold by any Tag-Along Holder will not exceed the Proportionate Percentage of the shares of Common Stock that the Apollo Holders proposes to sell or transfer in the applicable Tag-Along Transaction.

(c) If Avenue does not deliver a timely Tag-Along Notice, then the Apollo Holders may thereafter consummate the Tag-Along Transaction, at the same sale price and on the same other terms and conditions as are described in the Sale Notice (including, without limitation, the number of shares of Common Stock being sold), for a period of one hundred twenty (120) days thereafter (subject to extension in the event of required regulatory approvals not having been obtained by such date but in any event no later than two hundred seventy (270) days after receipt of the Tag-Along Notice). In the event the Apollo Holders have not consummated the Tag-Along Transaction within such one hundred twenty (120) day period (subject to extension as provided above), the Apollo Holders shall not thereafter consummate a Tag-Along Transaction, without first providing a Sale Notice and an opportunity to Avenue to sell in the manner provided above. If Avenue gives the Apollo Holders a timely Tag-Along Notice, then the Apollo Holders shall use reasonable efforts to cause the prospective transferee or Group to agree to acquire all the shares of Class A Common Stock identified in all timely Tag-Along Notices, upon the same terms and conditions as are applicable to the shares of Common Stock held by the Apollo Holders. If such prospective transferee or Group is unable or unwilling to acquire all the shares of Common Stock proposed to be included in the Tag-Along Transaction upon such terms, then the Apollo Holders may elect either to cancel such Tag-Along Transaction or to allocate the maximum number of shares that such prospective transferee or Group is willing to purchase among the Apollo Holders and the Tag-Along Holders in the proportion that the Apollo Holders’ and each such Tag-Along Holder’s Proportionate Percentage bears to the total Proportionate Percentages of the Apollo Holders and the Tag-Along Holders. In connection with the Tag-Along Transaction, each party shall bear its own expenses.

 

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(d) For purposes of this Section 4, any holder of shares of Common Stock who has a contractual right (other than, for the avoidance of doubt, pursuant to this Agreement) to participate in such Tag-Along Transaction or any other holder of Common Stock who is otherwise participating in such Tag-Along Transaction with the consent of the Apollo Holders, shall be deemed to be a “Tag-Along Holder” under this Section 4 (provided that, for the avoidance of doubt, this Section 4(d) is not intended to nor shall it grant any rights to any Person to participate in any Tag-Along Transaction that is not otherwise granted pursuant to Section 4 (a)-(c) above).

Section 5. Notices . In the event a notice or other document is required to be sent hereunder to the Company or to any party hereto, such notice or other document, if sent by mail, shall be sent by registered mail, return receipt requested (and by air mail in the event the addressee is not in the continental United States), to the party entitled to receive such notice or other document at the address set forth on Annex I hereto. Any such notice shall be effective and deemed received three (3) days after proper deposit in the mails, but actual notice shall be effective however and whenever received. Any party may effect a change of address for purposes of this Agreement by giving notice of such change to each of the other parties in the manner provided herein. Until such notice of change of address is properly given, the addresses set forth on Annex II shall be effective for all purposes.

Section 6. Amendment . This Agreement may be amended, modified, supplemented or waived from time to time by an instrument in writing signed by the Company, Realogy, Avenue and each Apollo Holder.

Section 7. Term; Termination . This Agreement shall only become effective on the Closing Date; provided that, this Agreement shall automatically terminate if the Exchange Offers contemplated herein are terminated and abandoned. Unless earlier terminated by the mutual agreement of all the parties hereto, this Agreement shall terminate automatically upon the earlier of (i) the dissolution of the Company (unless the Company continues to exist after such dissolution as a limited liability company or in another form, whether incorporated in Delaware or another jurisdiction), (ii) with respect to Avenue, the first date on which Avenue ceases to hold, directly or indirectly, Registrable Securities (assuming all of the then outstanding Convertible Notes held by Avenue have been converted into shares of Class A Common Stock) representing at least 30% of the Registrable Securities (assuming all of the Convertible Notes held by Avenue on the Closing Date were converted into shares of Class A Common Stock) Avenue acquired on the Closing Date or thereafter and (iii) with respect to each Apollo Holder, the first date on which such Apollo Holder ceases to hold, directly or indirectly, any shares of Common Stock or Convertible Notes convertible into shares of Common Stock.

Section 8. Miscellaneous Provisions .

(a) THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE 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

 

17


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.

(b) The Company may, without the consent of Avenue, permit any holder that acquires in the Exchange Offers Convertible Notes convertible into shares of Class A Common Stock representing 10% or more of the outstanding shares of Common Stock on an “as converted” basis to become a party to this Agreement and to give such holder the same rights as Avenue under this Agreement.

(c) Whenever the context requires, the gender of all words used herein shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural.

(d) Except as provided in Section 7, any party to this Agreement who Disposes of all of his, her or its Common Stock and/or Convertible Notes in conformity with the terms of this Agreement shall cease to be a party to this Agreement and shall have no further rights hereunder other than rights to indemnification under Section 3.3, if applicable.

(e) Each party to this Agreement acknowledges that a remedy at law for any breach or attempted breach of this Agreement will be inadequate, agrees that each other party to this Agreement shall be entitled to specific performance and injunctive and other equitable relief in case of any such breach or attempted breach and further agrees to waive (to the extent legally permissible) any legal conditions required to be met for the obtaining of any such injunctive or other equitable relief (including posting any bond in order to obtain equitable relief).

(f) This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

(g) Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, and such invalid, illegal or otherwise unenforceable provisions shall be null and void as to such jurisdiction. It is the intent of the parties, however, that any invalid, illegal or otherwise unenforceable provisions be automatically replaced by other provisions which are as similar as possible in terms to such invalid, illegal or otherwise unenforceable provisions but are valid and enforceable to the fullest extent permitted by law.

(h) Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and other documents as any other party hereto reasonably may request in order to carry out the provisions of this Agreement and the consummation of the transactions contemplated hereby.

 

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(i) The parties to this Agreement agree that jurisdiction and venue in any action brought by any party hereto pursuant to this Agreement shall exclusively and properly lie in the Delaware State Chancery Court located in Wilmington, Delaware, or (in the event that such court denies jurisdiction) any federal or state court located in the State of Delaware. By execution and delivery of this Agreement each party hereto irrevocably submit to the jurisdiction of such courts for himself and in respect of his property with respect to such action. The parties hereto irrevocably agree that venue for such action would be proper in such court, and hereby waive any objection that such court is an improper or inconvenient forum for the resolution of such action. The parties further agree that the mailing by certified or registered mail, return receipt requested, of any process required by any such court shall constitute valid and lawful service of process against them, without necessity for service by any other means provided by statute or rule of court.

(j) No course of dealing between the Company, or its subsidiaries, and the other parties hereto (or any of them) or any delay in exercising any rights hereunder will operate as a waiver of any rights of any party to this Agreement. The failure of any party to enforce any of the provisions of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

(k) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHT OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS ENTERED INTO IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN.

(l) This Agreement sets forth the entire agreement of the parties hereto as to the subject matter hereof and supersedes all previous agreements among all or some of the parties hereto, whether written, oral or otherwise, as to such subject matter. Unless otherwise provided herein, any consent required by any party hereto may be withheld by such party in its sole discretion.

(m) Except as otherwise expressly provided herein, no Person not a party to this Agreement, as a third party beneficiary or otherwise, shall be entitled to enforce any rights or remedies under this Agreement.

(n) If, and as often as, there are any changes in the Common Stock and/or Convertible Notes, as applicable, by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions of this Agreement, as may

 

19


be required, so that the rights, privileges, duties and obligations hereunder shall continue with respect to the Common Stock or Convertible Notes as so changed.

(o) Without limiting anything in the Charter or the Bylaws, no director of the Company shall be personally liable to the Company or any party hereto as a result of any acts or omissions taken under this Agreement in good faith.

(p) Notwithstanding anything to the contrary contained herein, (i) each Apollo Holder may assign its rights or obligations, in whole or in part, under this Agreement to any member of the Apollo Holders, and such Person shall automatically become party to this Agreement and this Agreement shall be amended and restated to provide that such Person or a designee of such Person shall have the same rights and obligations of the Apollo Holders and the Apollo Holders hereunder and (ii) Avenue may assign its rights under Section 3 to any third party transferee in connection with any transfer (other than pursuant to a public offering) of at least $10 million aggregate principal amount of its Subject Securities, provided that such third party transferee executes and delivers to the Company a joinder agreement in the form set forth in Exhibit A and becomes a party to this Agreement.

* * * * *

 

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This Agreement is executed by the parties hereto to be effective as of the Closing Date.

 

REALOGY CORPORATION
By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   EVP, CFO & Treasuer
DOMUS HOLDINGS CORP.
By:   /s/ Anthony E. Hull
  Name: Anthony E. Hull
  Title: EVP, CFO & Treasuer

 

[ Signature Page to Investor Securityholders Agreement - Avenue ]


DOMUS INVESTMENT HOLDINGS, LLC
By:   Apollo Management VI, L.P., its manager
By:   AIF VI Management, LLC, its general partner
By:   /s/ Laurie Medley
  Name: Laurie Medley
  Title: Vice President
RCIV HOLDINGS, L.P. (CAYMAN)
By:   Apollo Advisors VI (EH), L.P., its general partner
By:   Apollo Advisors VI (EH-GP), Ltd., its general partner
By:   /s/ Laurie Medley
  Name: Laurie Medley
  Title: Vice President
APOLLO INVESTMENT FUND VI, L.P.
By:   Apollo Advisors VI, L.P., its general partner
By:   Apollo Capital Management VI, LLC, its general partner
By:   /s/ Laurie Medley
  Name: Laurie Medley
  Title: Vice President
DOMUS CO-INVESTMENT HOLDINGS, LLC
By:   Apollo Management VI, L.P., its managing member
By:   AIF VI Management, LLC, its general partner
By:   /s/ Laurie Medley
  Name: Laurie Medley
  Title: Vice President

 

[ Signature Page to Investor Securityholders Agreement- Avenue ]


RCIV HOLDINGS (LUXEMBOURG), S.A.R.L.
By:   /s/ Laurie Medley
  Name: Laurie Medley
  Title: Vice President

 

[ Signature Page to Investor Securityholders Agreement - Avenue ]


AVENUE CAPITAL MANAGEMENT II, L.P.

BY: AVENUE CAPITAL MANAGEMENT II GENPAR, L.P. (ON BEHALF OF FUNDS MANAGED BY IT)

By:   /s/ Marc Lasry
  Name: Marc Lasry
  Title: Managing Member

 

[ Signature Page to Investor Securityholders Agreement - Avenue ]


ANNEX I

ADDRESSES FOR NOTICE

DOMUS HOLDINGS CORP.

DOMUS INVESTMENT HOLDINGS, LLC

RCIV HOLDINGS, L.P. (CAYMAN)

RCIV HOLDINGS (LUXEMBOURG) S.A.R.L.

APOLLO INVESTMENT FUND VI, L.P.

DOMUS CO-INVESTMENT HOLDINGS LLC

c/o Apollo Management VI, L.P.

9 West 57 th Street, 43 rd Floor

New York, NY 10019

Attention: Marc Becker

Email: Becker@apollolp.com

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Facsimile: (212) 735-2000

Attention:    Stacy J. Kanter, Esq.

                    Thomas W. Greenberg, Esq.

AVENUE CAPITAL MANAGEMENT II, L.P.

399 Park Avenue, 6th Floor

New York, New York 10022

Attention:    Jane Castle

                    Eric Ross

with a copy (which shall not constitute notice) to:

Akin Gump Strauss Hauer & Feld LLP

1333 New Hampshire Avenue NW

Washington, DC 20036-1511

Facsimile: (202) 955-7697

Attention: Michael S. Mandel, Esq.


EXHIBIT A

JOINDER AGREEMENT

This Joinder Agreement (“ Joinder ”) is executed pursuant to the terms of the Investor Securityholders Agreement dated as of November 30, 2010, a copy of which is attached hereto (the “ Investor Securityholders Agreement ”), by the transferee (“ Transferee ”) executing this Joinder. By the execution of this Joinder, the Transferee agrees as follows:

 

  1. Acknowledgement . Transferee acknowledges that Transferee is acquiring or receiving from Avenue $10 million or more in aggregate principal amount of certain Convertible Notes convertible at any time at the option of the holders thereof, in whole or in part, into shares of Class A Common Stock of Domus Holdings Corp. a Delaware corporation (the “ Company ”). Capitalized terms used herein without definition are defined in the Investor Securityholders Agreement and are used herein with the same meanings set forth therein.

 

  2. Agreement to be Bound . Transferee by delivering this Joinder agrees that it shall have only the registration rights referenced in Section 3 of the Securityholders Agreement and agrees to become a party to the Securityholders Agreement.

 

  3. Further Agreement . The Transferee further acknowledges and agrees that it shall not have any rights under the Securityholders Agreement other than piggy-back registration rights and certain indemnification rights.

 

  4. Effectiveness . This Joinder shall take effect and Transferee shall be bound by Section 3 of the Investor Securityholders Agreement immediately upon the execution hereof.

 

  5. Law . THIS ADOPTION WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS ADOPTION, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.


   
Name of Transferee
   
Signature
   
Date

 

Exhibit A-2

Exhibit 10.28

 

 

 

AMENDED AND RESTATED INVESTOR SECURITYHOLDERS AGREEMENT

by and among

DOMUS HOLDINGS CORP.,

REALOGY CORPORATION,

PAULSON & CO. INC., and

the SECURITYHOLDERS that are parties hereto

DATED AS OF JANUARY 5, 2011

 

 

 


AMENDED AND RESTATED INVESTOR SECURITYHOLDERS AGREEMENT, dated as of January 5, 2011 (this “ Agreement ”), by and among Domus Holdings Corp., a Delaware corporation (the “ Company ”), Realogy Corporation, a Delaware corporation (“ Realogy ”), Paulson & Co. Inc., a Delaware corporation, on behalf of the several investment funds and accounts managed by it (“ Paulson ”), and the Apollo Holders (as such term is hereinafter defined).

WHEREAS, the Company, Realogy, Paulson and the Apollo Holders previously executed the Investor Securityholders Agreement, dated as of November 30, 2010, which is being amended and restated hereby;

WHEREAS, the Company owns, directly or indirectly, all of the outstanding equity interests of (i) Domus Intermediate Holdings Corp., a Delaware corporation (“ Intermediate ”), and (ii) Realogy;

WHEREAS, Realogy has previously issued 10.50% Senior Notes due 2014, 11.00%/11.75% Senior Toggle Notes due 2014, and 12.375% Senior Subordinated Notes due 2015 (collectively, the “ Existing Notes ”);

WHEREAS, the Company and Paulson will exchange a portion of the Existing Notes for 11.00% Series A Convertible Notes due 2018 (the “ Series A Convertible Notes ”), 11.00% Series B Convertible Notes due 2018 (the “ Series B Convertible Notes ”) and 11.00% Series C Convertible Notes due 2018 (the “ Series C Convertible Notes ” and, together with the Series A Convertible Notes and the Series B Convertible Notes, the “ Convertible Notes ”) convertible at any time at the option of the holders thereof, in whole or in part, into shares of Class A common stock of the Company, par value $0.01 per share, and Realogy will offer to exchange the Existing Notes held by the Existing Note holders for new 11.00% Senior Cash Notes due 2017, new 11.50% Senior Cash Notes due 2017, and new 12.875% Senior Subordinated Notes due 2018 (collectively, the “ Extended Maturity Notes ” and together with the Convertible Notes, the “ New Notes ” ) (the foregoing transactions, collectively, the “ Exchange Transactions ”);

WHEREAS, RCIV Holdings (Luxembourg) s.à.r.l., a Luxembourg société à responsabilité limitée (“ RCIV Luxco ”), a wholly owned subsidiary of RCIV Holdings, L.P, a Cayman Islands exempted limited partnership (“ RCIV Cayman ”), owns Existing Notes and will own Convertible Notes convertible into an equity interest in the Company upon consummation of the Exchange Transactions;

WHEREAS, Apollo Investment Fund VI, LP, a Delaware limited partnership (“ AIF VI ”), Domus Investment Holdings, LLC, a Delaware limited liability company (“ Domus Investment ”) and Domus Co-Investment Holdings, LLC, a Delaware limited liability company (“ Co-Investment Holdings ”), each own capital stock of the Company; and

WHEREAS, each of the Company, the Apollo Holders and Paulson deem it to be in their respective best interests to enter into this Agreement to set forth their agreements with respect to certain matters concerning the Company.

 

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NOW, THEREFORE, in consideration of the premises and of the mutual consents and obligations hereinafter set forth, intending to be legally bound, the parties hereto hereby agree as follows:

Section 1. Definitions .

As used in this Agreement:

Accelerated Issuance ” has the meaning set forth in Section 3.

Acquisition Counterparty ” has the meaning set forth in Section 3.

Affiliate ” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. 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.

Agreement ” has the meaning set forth in the preamble.

AIF VI ” has the meaning set forth in the preamble.

Apollo Holders ” means AIF VI, Domus Investment, RCIV Cayman, RCIV Luxco and Co-Investment Holdings, collectively with each of their respective Affiliates (including, for avoidance of doubt, any syndication vehicles).

Avenue Investor Securityholders Agreement ” means the amended and restated investor securityholders agreement dated as of the date hereof by and between Avenue Investments L.P., the Company, Realogy and the Apollo Holders.

Business Day ” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close.

Board ” means the Board of Directors of the Company. All determinations by the Board required pursuant to the terms of this Agreement shall be made in the good faith sole discretion of the Board and shall be binding and conclusive.

Bylaws ” means the Company’s bylaws, as the same may be amended from time to time.

Charter ” means the Company’s Certificate of Incorporation, as the same may be amended from time to time.

Cl ass A Common Stock ” means the Class A common stock of the Company, par value $.01 per share.

 

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Cl ass B Common Stock ” means the Class B common stock of the Company, par value $.01 per share.

Closing Date ” means the date of the closing of the Exchange Transactions.

Co-Investment Holdings ” has the meaning set forth in the recitals.

Common Stock ” means the Class A Common Stock, and the Class B Common Stock, collectively, and any class of common stock into which the Class A Common Stock or Class B Common Stock may be reclassified, converted or exchanged.

Company ” has the meaning set forth in the preamble.

Company Offered Securities ” has the meaning set forth in Section 3.

Convertible Notes ” has the meaning set forth in the recitals.

Debt Preemptive Event ” has the meaning set forth in Section 3.

Domus Investment ” has the meaning set forth in the recitals.

Equity Preemptive Event ” has the meaning set forth in Section 3.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

Exchange Transactions ” has the meaning set forth in the recitals.

Existing Notes ” has the meaning set forth in the recitals.

Extended Maturity Notes ” has the meaning set forth in the recitals.

Group ” has the meaning ascribed to such term in Section 13(d)(3) of the Exchange Act.

HSR Act ” means Hart-Scott-Rodino Act of 1976, as amended.

Intermediate ” has the meaning set forth in the recitals.

IPO ” means the initial public offering of shares of the Common Stock pursuant to an effective Registration Statement under the Securities Act.

Liquidated Damages ” has the meaning set forth in Section 4.3.

Lock-Up Period ” has the meaning set forth in Section 4.2(c).

Losses ” has the meaning set forth in Section 4.5(a).

 

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Management Investor Rights Agreement ” means the management investor rights agreement by and between the Company, AIF IV, Domus Investment and certain holders party thereto, as amended.

Maximum Suspension Period ” has the meaning set forth in Section 4.3.

New Notes ” has the meaning set forth in the recitals.

Participating Holders ” has the meaning set forth in Section 4.4(a)(i).

Paulson ” has the meaning set forth in the recitals.

Paulson Appointee ” has the meaning set forth in Section 6.

Paulson Observer ” has the meaning set forth in Section 6.

Person ” shall be construed broadly and shall include, without limitation, an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity or any department, agency or political subdivision thereof or any other entity.

Piggy- B ack Notice ” has the meaning set forth in Section 4.2(a).

Piggy-Back Registration Right ” has the meaning set forth in Section 4.2(a).

Preemptive Event ” has the meaning set forth in Section 3.

Preemptive Rights Offer ” has the meaning set forth in Section 3.

Preemptive Rights Offer Notice ” has the meaning set forth in Section 3.

Pro Rata Debt Ownership ” shall be a fraction of the Company Offered Securities or, in the case of a Third Party Debt Financing, a fraction of the aggregate principal amount of indebtedness to be incurred, determined by dividing (A) the aggregate principal amount of New Notes then owned by Paulson plus the aggregate principal amount of Convertible Notes converted into Class A Common Stock by Paulson to the extent such Class A Common Stock is still held by Paulson by (B) $6.985 billion (which is the total outstanding indebtedness of the Company and Realogy on a consolidated basis as of November 30, 2010).

Proportionate Debt Percentage ” shall mean a number (expressed as a percentage) equal to a fraction, the numerator of which is the aggregate principal amount of the debt proposed to be purchased by the holder of the Existing Notes or New Notes in connection with a debt financing to third parties and the denominator of which is the aggregate principal amount of the Existing Notes or New Notes owned by such holder.

Proportionate Percentage ” with respect to any holder of Convertible Notes (or shares of Class A Common Stock issued upon conversion of such Convertible Notes or a combination thereof), shall mean a number (expressed as a percentage) equal to a fraction, the numerator of

 

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which is the total number of shares of Common Stock on an as-converted basis proposed to be transferred by such holder in a proposed Tag-Along Transaction and the denominator of which is the total number of shares of Common Stock on an as-converted basis owned by such holder.

Public Sale ” means any sale, occurring simultaneously with or after an IPO, of Common Stock to the public pursuant to an offering registered under the Securities Act or to the public in the manner described by the provisions of Rule 144 promulgated thereunder, other than an offering relating to employee incentive plans.

Qualified Public Offering ” means (a) an Underwritten Offering of shares of Class A Common Stock by the Company or any selling securityholders pursuant to an effective Registration Statement filed by the Company with the SEC (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 Class A 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 $200 million and (b) the listing of Company Class A Common Stock on the NASDAQ Global Select Market, the NASDAQ Global Market, the New York Stock Exchange or any successor exchange to the foregoing.

RCIV Cayman ” has the meaning set forth in the recitals.

RCIV Luxco ” has the meaning set forth in the recitals.

Realogy ” has the meaning set forth in the preamble.

Registrable Securities ” shall mean (i) the shares of Class A Common Stock issued upon the conversion of the Convertible Notes, (ii) the shares of Class A Common Stock acquired in connection with the exercise of preemptive rights in accordance with Section 3, (iii) any and all shares of Common Stock issued or issuable with respect to Registrable Securities by way of a stock dividend or a stock split; provided, that any Registrable Securities shall cease to be Registrable Securities when (A) a Registration Statement with respect to the sale of such Registrable Securities has been declared effective under the Securities Act and such Registrable Securities have been disposed of pursuant to such Registration Statement, (B) such Registrable Securities have been disposed of in reliance upon Rule 144 (or any similar provision then in force) under the Securities Act or (C) except for a transfer in accordance with Section 15(p), such Registrable Securities shall have been otherwise transferred to a third party; and provided, further, that any securities that have ceased to be Registrable Securities shall not thereafter become Registrable Securities and any security that is issued or distributed in respect of securities that have ceased to be Registrable Securities is not a Registrable Security and (iv) any shares of Common Stock required to be registered by the Company on behalf of any other Person possessing registration rights pursuant to another agreement in which the Company had granted such rights.

Registration Request ” has the meaning set forth in Section 4.1(a).

 

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Registration Statement ” means any shelf registration statement or other registration statement filed with the SEC with respect to the Class A Common Stock.

Sale Notice ” has the meaning set forth in Section 5(a).

SEC ” means the Securities and Exchange Commission.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Securityholders Agreement ” means the securityholders agreement by and between the Company and the securityholders party thereto, as amended.

Series A Convertible Notes ” has the meaning set forth in the recitals.

Series B Convertible Notes ” has the meaning set forth in the recitals.

Series C Convertible Notes ” has the meaning set forth in the recitals.

Subject Securities ” means shares of Class A Common Stock, the Convertible Notes and any shares of Class A Common Stock issuable upon conversion thereof.

Suspension Period ” has the meaning set forth in Section 4.3.

Syndicated Third Party Bank Financing ” means a Third Party Debt Financing involving loans provided by a syndicate of banks, financial institutions and other institutional lenders.

Tag-Along Holder ” has the meaning set forth in Section 5(b).

Tag-Along Notice ” has the meaning set forth in Section 5(b).

Tag-Along Transaction ” has the meaning set forth in Section 5(a).

Third Party Debt Financing ” has the meaning set forth in Section 2.

Third Party Debt Financing Notice ” has the meaning set forth in Section 2.

Third Party Debt Financing Offer ” has the meaning set forth in Section 2.

Underwritten Offering ” means a sale of shares of Class A Common Stock to an underwriter for reoffering to the public.

Underwritten Third Party Notes Offering ” means a Third Party Debt Financing involving a public or broadly marketed offering (as determined in good faith by the Board of Directors of the Company or a committee thereof) of debt securities.

Section 2. Representations and Warranties . The Company hereby represents and warrants that the Company has not granted registration rights to any Person other than pursuant

 

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to (i) the Management Investor Rights Agreement, (ii) the Securityholders Agreement and (iii) the Avenue Investor Securityholders Agreement.

Section 3. Preemptive Events . If any time prior to (but not including) a Qualified Public Offering, (i) the Company or Realogy proposes to issue or sell any equity securities (or securities convertible into, issuable upon exercise of or exchangeable for any such equity securities) (not including (1) securities issued pursuant to any equity compensation plans, (2) securities issued as a dividend or distribution on all shares of Common Stock or upon any stock split, recapitalization or other subdivision or combination of securities, (3) securities issued upon the exercise, conversion or exchange of any options, warrants or convertible securities issued prior to the date hereof or for which Paulson has had the opportunity to subscribe for pursuant to its preemptive rights (and which shall include the Convertible Notes) and (4) securities issued (other than to an Apollo Holder) (Y) as consideration in an acquisition (whether by stock sale, merger, recapitalization, asset purchase or otherwise) or (Z) in connection with a joint venture or strategic alliance) or (ii) the Company or Realogy proposes to issue or sell debt to any Affiliate of Realogy or the Company (for the avoidance of doubt, such Affiliate of Realogy or the Company shall not include the Company, Realogy, Intermediate or any subsidiary of Realogy) (collectively, “ Company Offered Securities ”), the Company shall give notice in writing (the “ Preemptive Rights Offer Notice ”) to Paulson of such proposed issuance or sale of equity (an “ Equity Preemptive Event ”) or debt (a “ Debt Preemptive Event ” and, together with an Equity Preemptive Event, a “ Preemptive Event ”). The Preemptive Rights Offer Notice shall describe the terms of the proposed transaction, identify the proposed purchaser(s), and contain an offer (the “ Preemptive Rights Offer ”) to sell Company Offered Securities to Paulson, at the same price, on the same terms and for the same consideration to be paid by the proposed purchaser(s) as set forth in this Section 3. With respect to an Equity Preemptive Event, Paulson shall have the right to participate in the Preemptive Event up to its respective pro rata fully-diluted portion of its equity ownership (which shall be a fraction of the Company Offered Securities determined by dividing (A) the number of shares of Common Stock then owned by Paulson on a fully-diluted basis assuming the conversion of all of its Convertible Notes by (B) the number of shares of Common Stock then outstanding (before giving effect to the Preemptive Event) on a fully-diluted basis assuming, among other things, the conversion of all Convertible Notes then outstanding. With respect to a Debt Preemptive Event, Paulson shall have the right to participate in the Preemptive Event up to its Pro Rata Debt Ownership. The Preemptive Rights Offer Notice shall be delivered at least fifteen (15) days prior to the relevant issuance or sale. If Paulson fails to accept in writing the Preemptive Rights Offer by the tenth (10th) day after the Company’s delivery of the Preemptive Rights Offer Notice, Paulson shall have no further rights with respect to the Preemptive Event; provided, however, that if (i) any of the terms of the Preemptive Event, taken as a whole, materially change after the date of the Preemptive Rights Offer Notice or (ii) the issuance or sale of the Company Offered Securities pursuant to the Preemptive Event shall not have occurred within one hundred twenty (120) days after the delivery of the Preemptive Rights Offer Notice (subject to extension in the event of required regulatory approvals not having been obtained by such date but in any event no later than one hundred eighty (180) days after delivery of the Preemptive Rights Offer Notice), then, in each case, any additional issuance shall again be subject to this Section 3 and the Company shall be required to give a new Preemptive Rights Offer Notice within the time period described above and Paulson shall have

 

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an additional ten (10) days to accept in writing the Preemptive Rights Offer. If Paulson accepts the Preemptive Rights Offer and such acceptance could require Paulson to complete a filing under the HSR Act, Paulson may participate in the Preemptive Event until the earlier of the date that (i) is two business days following the date that Paulson has complied with the requirements of the HSR Act and received the necessary approvals or otherwise determined no filing under the HSR Act is required with respect to such participation and (ii) seventy five (75) days following the Company’s delivery of the Preemptive Rights Offer Notice, or such later date as may be described in the Preemptive Rights Offer Notice. Notwithstanding any of the foregoing, following any Preemptive Rights Offer Notice relating to Company Offered Securities, the Company may immediately issue, prior to the expiration of the time periods above, the Company Offered Securities whenever it determines that it would be to the advantage of the Company for it to issue such Company Offered Securities (an “ Accelerated Issuance ”). To the extent that the Company effects an Accelerated Issuance and Paulson accepts in writing the Preemptive Rights Offer, the Company will issue to Paulson additional Company Offered Securities at the same price, on the same terms and for the same consideration paid by the purchaser(s) in the Accelerated Issuance, such that the percentage of the Company Offered Securities issued to Paulson would equal the percentage of the Company Offered Securities Paulson would have otherwise received in the absence of an Accelerated Issuance in accordance with this Section 3. In addition, if at any time prior to a Qualified Public Offering, the Company or Realogy proposes to incur indebtedness (other than indebtedness (X) incurred in the ordinary course of business, (Y) incurred in favor of the seller, target, acquisition or merger counterparty or their Affiliates (each, an “ Acquisition Counterparty ”) or assumed from an Acquisition Counterparty as consideration in an acquisition (whether by stock sale, merger, recapitalization, asset purchase or otherwise) or (Z) incurred in connection with a joint venture or strategic alliance in favor of such joint venture or strategic alliance or joint venture partner or strategic partner or their Affiliates) pursuant to a new debt financing with one or more third parties (a “ Third Party Debt Financing ”), then the Company shall use its commercially reasonable efforts to allow Paulson to participate, up to its Pro Rata Debt Ownership, at the same price, on the same terms and for the same consideration as other participants in the financing; provided however that if the Apollo Holders participate in such debt financing, then Paulson shall have the right to participate in the debt financing at the same price, on the same terms and for the same consideration as the Apollo Holders, provided that the Proportionate Debt Percentage of debt to be purchased by Paulson shall not exceed the Proportionate Debt Percentage of debt that the Apollo Holders elect to acquire in such debt financing. The Company shall deliver written notice (the “ Third Party Debt Financing Notice ”) to Paulson of such proposed Third Party Debt Financing electronically via facsimile or electronic mail (i) in the case of an Underwritten Third Party Notes Offering, promptly upon the commencement of the marketing thereof, (ii) in the case of a Syndicated Third Party Bank Financing, promptly after the beginning of the marketing period for such Syndicated Third Party Bank Financing, and (iii) in the case of any other Third Party Debt Financing, at least ten (10) days prior to the relevant incurrence, issuance or sale. The Third Party Debt Financing Notice shall describe the anticipated terms (provided that the description of such terms may be limited to the information provided to other potential investors in the Third Party Debt Financing) of the proposed transaction, contain an offer (the “ Third Party Debt Financing Offer ”) to Paulson to participate in the Third Party Debt Financing at the same price, on the same terms and for the same consideration to be paid by other potential investors in the proposed Third Party Debt Financing or by the Apollo Holders if the Apollo Holders participate

 

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in such proposed debt financing, and, in the case of an Underwritten Third Party Notes Offering or a Syndicated Third Party Bank Financing, indicate the anticipated length of the marketing period, and provide instructions, including any relevant contact information, on how to participate in the offering. If Paulson fails to accept the Third Party Debt Financing Offer, (i) in the case of an Underwritten Third Party Notes Offering or a Syndicated Third Party Bank Financing, by (a) indicating their interest in participating in the Third Party Debt Financing in accordance with the instructions included in the Third Party Debt Financing Notice and (b) promptly notifying the Company in writing electronically via facsimile or electronic mail, prior to the end of the marketing period for such transaction indicated on the Third Party Debt Financing Notice, or (ii) in the case of any other Third Party Debt Financing, in writing electronically via facsimile or electronic mail to the Company by the tenth (10th) day after the Company’s delivery of the Third Party Debt Financing Notice, Paulson shall have no further rights with respect to the Third Party Debt Financing; provided, however, that if the relevant incurrence, issuance or sale in a Third Party Debt Financing shall not have occurred within one hundred twenty (120) days after the delivery of the Third Party Debt Financing Notice (subject to extension in the event of required regulatory approvals not having been obtained by such date but in any event no later than one hundred eighty (180) days after delivery of the Third Party Debt Financing Notice), then any additional incurrence, issuance or sale shall again be subject to this Section 3 and the Company shall be required to give a new Third Party Debt Financing Notice within the time periods described above and Paulson shall have an additional ten (10) days to accept in writing the Third Party Debt Financing Notice.

Section 4. Registration Rights .

4.1 Underwritten Demand Registration Rights .

(a) Subject to the other provisions of this Section 4.1, at any time after the date that is thirty six (36) months after the Closing Date, Paulson may make no more than two (2) written requests (each, a “ Registration Request ”) to the Company for registration under and in accordance with the provisions of the Securities Act of all or part of its shares of Common Stock. The offering of the Registrable Securities pursuant to such Registration Request shall be in the form of an Underwritten Offering only. Notwithstanding anything to the contrary set forth in this Section 4.1(a), the Company will not be required to effect a registration pursuant to this Section 4.1(a) unless the estimated gross proceeds from the sale of the Registrable Securities included in the Registration Request are at least $75 million.

(b) If prior to a Qualified Public Offering Paulson elects to exercise its demand rights pursuant to this Section 4.1 or the Company notifies Paulson of its intention to consummate a Qualified Public Offering, on its own behalf or in connection with an exercise by any Person possessing demand rights pursuant to another agreement in which the Company has granted demand rights, Paulson agrees that Paulson shall not sell publicly, make any short sale of, grant any option for the purchase of, or otherwise dispose, any shares of Class A Common Stock (except, in each case, as part of the Qualified Public Offering, if permitted) during the period

 

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beginning on the delivery or receipt of such notice and ending ninety (90) days (or, in either case, such greater period as may be requested by the lead managing underwriter or underwriters, not to exceed one hundred eighty (180) days) after the effective date of the Registration Statement filed in connection with such Qualified Public Offering. Notwithstanding the foregoing, Paulson shall be entitled to transfer any shares of Class A Common Stock (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to Affiliates of Paulson where such Affiliates agree to be bound in writing by the restrictions set forth herein, (iii) with the prior written consent of the Company, (iv) to a nominee or custodian of a Person to whom a disposition or transfer would be permitted hereunder, provided that such nominee or custodian agrees to be bound in writing by the restrictions set forth herein, (v) following the consummation of a Qualified Public Offering, in transactions relating to shares of Common Stock or other securities acquired in open market transactions, or (vi) to any wholly-owned subsidiary or any stockholders, partners, members or similar persons of Paulson, provided that such Person agrees to be bound in writing by the restrictions set forth herein; provided that, in the case of this clause (i), (iv), (v) and (vi), such transfers do not give rise to a requirement to disclose in any public report or filing with the SEC and Paulson does not otherwise voluntarily effect any public filing or report regarding such transfers.

(c) All Registration Requests made pursuant to this Section 4 will specify the aggregate amount of shares of Common Stock to be registered. The Company shall include in the Underwritten Offering pursuant to a Registration Request all Registrable Securities with respect to which the Company has received a written request from any other Person possessing such rights pursuant to another agreement in which the Company has granted demand rights for inclusion therein within fifteen days after receipt by the Company of such demand. Promptly upon receipt of any such Registration Request, the Company will use its reasonable best efforts to effect such registration under the Securities Act (including, without limitation, filing post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with the applicable regulations promulgated under the Securities Act) of the shares of Class A Common Stock which the Company has been so requested to register within 180 days after such request (or within 120 days of such request in the case of a Registration Request after a Qualified Public Offering (subject to any lock-up restrictions)).

(d) Registrations under this Section 4.1 shall be on such appropriate registration form of the SEC as shall be selected by the Company.

(e) The Company shall use its reasonable best efforts to keep any Registration Statement filed in response to a Registration Request effective for as long as is necessary for Paulson to dispose of the covered securities.

(f) The Company shall select the underwriters, provided such selection is reasonably acceptable to Paulson.

 

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4.2 Piggy-Back Registration Rights .

(a) Participation . Subject to Section 4.2(b), if at any time the Company proposes to register any of its shares of Common Stock under the Securities Act (other than a registration on Form S-4 or S-8 or any successor form to such Forms or any registration of securities as it relates to an offering and sale to management of the Company pursuant to any employee stock plan or other employee benefit plan arrangement or pursuant to a shelf registration statement), whether for its own account or for the account of one or more stockholders of the Company, and the registration form to be used may be used for any registration of Registrable Securities, then the Company shall give prompt written notice (the “ Piggy-Back Notice ”) to Paulson of its intention to effect such a registration and, subject to Section 4.2(b), shall include in such registration all Registrable Securities with respect to which the Company has received a written request from Paulson for inclusion therein within 15 days after the receipt of the Piggy-Back Notice. The Piggy-Back Notice shall offer Paulson the right, subject to Section 4.2(b) (the “ Piggy-Back Registration Right ”), to register such number of shares of Registrable Securities as Paulson may request and shall set forth (i) the anticipated filing date of such Registration Statement and (ii) the number of shares of Class A Common Stock that is proposed to be included in such Registration Statement.

(b) Underwriters’ Cutback . Notwithstanding the foregoing, if a registration pursuant to this Section 4 (including Section 4.1) involves an Underwritten Offering and the managing underwriter or underwriters of such proposed Underwritten Offering advises the Company that the total or kind of securities which Paulson and any other persons or entities intend to include in such offering would be reasonably likely to adversely affect the price, timing or distribution of the securities offered in such offering, then the number of securities proposed to be included in such registration shall be allocated among the Company and all of the selling securityholders, such that the number of securities that each such Person shall be entitled to sell in the Underwritten Offering shall be included in the following order:

(i) In the event of an exercise by Paulson of its demand rights or any other Person possessing such rights pursuant to another agreement in which the Company has granted demand rights:

(1) first, the Registrable Securities held by the Person exercising a demand right pursuant to Section 4.1 or pursuant to any other agreement in which the Company has granted demand rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person in connection with such registration;

(2) second, the Registrable Securities held by the Persons requesting their Registrable Securities to be included in such registration pursuant to the terms of Section 4.2(a) or pursuant to any other agreement in which the Company has granted piggy-back registration rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person at the time of such registration; and

(3) third, the securities to be issued and sold by the Company in such registration.

 

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(ii) In all other cases:

(1) first, the securities to be issued and sold by the Company in such registration; and

(2) second, the Registrable Securities held by the Persons requesting their Registrable Securities to be included in such registration pursuant to the terms of Section 4.2(a) or pursuant to any other agreement in which the Company has granted Piggy-Back registration rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person at the time of such registration.

Notwithstanding anything to the contrary set forth in this Section 4.2, if the managing underwriter for an Underwritten Offering advises the Company that the inclusion of the number of shares of Common Stock proposed to be included in any registration by any particular Person would interfere with the successful marketing (including pricing) of such shares to be offered thereby, then the number of such shares proposed to be included in such registration by such Person shall be reduced to the lower of the number of such shares that the managing underwriter advises that such Person may sell in the Underwritten Offering and the number of such shares calculated pursuant to the foregoing. If the number of Paulson’s shares of Common Stock included in a registration made pursuant to a Registration Request is reduced in accordance with this Section 4.2(b) to less than two-thirds of the total shares of Common Stock originally proposed to be included by Paulson in such registration, Paulson shall not be deemed to have used a Registration Request under Section 4.1.

(c) Lock-up . If the Company at any time shall register shares of Common Stock under the Securities Act for sale to the public in an underwritten offering and if requested by the lead managing underwriter, Paulson agrees not to sell publicly, make any short sale of, grant any option for the purchase of, or otherwise dispose of, any capital stock of the Company without the prior written consent of the lead managing underwriter, during a period of not more than ninety (90) days (or up to one hundred eighty (180) days if requested by the lead managing underwriter in connection with a Qualified Public Offering) commencing on the effective date of the Registration Statement (the “Lock-Up Period”); provided, however, that if any holders of Registrable Securities shall be subject to a shorter period or receives more advantageous terms relating to the Lock-Up Period, then the Lock-Up Period shall be such shorter period and also on such more advantageous terms and Paulson shall be released from its obligations under this clause to the extent any other holder of Registrable Securities is released. Notwithstanding the foregoing, Paulson shall be entitled to transfer any shares of Class A Common Stock (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to Affiliates of Paulson where such Affiliates agree to be bound in writing by the restrictions set forth herein, (iii) with the prior written consent of the Company, (iv) to a nominee or custodian of a Person to whom a disposition or transfer would be permitted hereunder, provided that such nominee or custodian agrees to be bound in writing by the restrictions set forth herein, (v) following the consummation of a Qualified Public Offering, in transactions relating to shares of Common Stock or other securities acquired in open market

 

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transactions, or (vi) to any wholly-owned subsidiary or any stockholders, partners, members or similar persons of Paulson, provided that such Person agrees to be bound in writing by the restrictions set forth herein; provided that, in the case of this clause (i), (iv), (v) and (vi), such transfers do not give rise to a requirement to disclose in any public report or filing with the SEC and Paulson does not otherwise voluntarily effect any public filing or report regarding such transfers. In addition, if requested by the lead managing underwriter, in connection with a public offering, Paulson shall enter into a customary lock-up agreement with the lead managing underwriter.

(d) Company Control . The Company may decline to file a Registration Statement after giving the Piggy-Back Notice, or withdraw a Registration Statement after filing and after such Piggy-Back Notice, but prior to the effectiveness of the Registration Statement, provided that the Company shall promptly notify Paulson in writing of any such action and provided further that the Company shall bear all reasonable expenses incurred by Paulson or otherwise in connection with such withdrawn Registration Statement. Except as provided in Section 4.1(f), notwithstanding any other provision herein, the Company shall have sole discretion to select any and all underwriters that may participate in any Underwritten Offering.

(e) Participation in Underwritten Offerings . No Person may participate in any Underwritten Offering under this Section 4 unless such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Persons entitled to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements, lock-ups and other documents required for such underwriting arrangements. Nothing in this Section 4.2(e) shall be construed to create any additional rights regarding the Piggy-Back registration of Registrable Securities in any Person otherwise than as set forth herein.

(f) Expenses . The Company will pay all registration fees and other reasonable expenses in connection with each registration of Registrable Securities requested pursuant to this Section 4, including reasonable fees and expenses of one counsel to the Participating Holders which shall not exceed $100,000; provided, that each Participating Holder shall pay any remaining counsel fees and expenses and all applicable underwriting fees, discounts and similar charges (pro rata based on the securities sold).

(g) Publicly Available Information . If the Company is not required to file reports under the Securities Act or the Exchange Act, the Company will make publicly available such necessary information for so long as necessary to permit sales pursuant to Rule 144 under the Securities Act.

4.3 Registration Statement Suspension . Following Paulson’s receipt of a resolution of the Board certified by the secretary of the Company stating that, in the good faith judgment of the Board, the filing, initial effectiveness or continued use of a Registration Statement would require the Company to make a public disclosure of material non-public information, which disclosure in the good faith judgment of the Board (A) would be required to be made in any Registration Statement so that such Registration Statement would not be materially misleading, (B) would not be required to be made at such time but for the filing, effectiveness or continued

 

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use of such Registration Statement, and (C) would reasonably be expected to either (1) materially and adversely affect the Company or its business if made at such time or (2) unreasonably interfere with the Company’s ability to effect a planned or proposed acquisition, disposition, financing, reorganization, recapitalization or similar transaction, the Company may delay the filing or initial effectiveness of, or suspend use of, such Registration Statement; provided that the Company shall not be permitted to do so under this Section 4.3 for more than 90 days during any twelve-month period (the “ Maximum Suspension Period ”); provided , further , that the Company shall pay liquidated damages (“ Liquidated Damages ”), from and including each day in excess of the Maximum Suspension Period at a rate per annum equal to an additional 0.25% of the principal balance of the notional amount of Convertible Notes that were exchanged by Paulson for those Registrable Securities that are still held by Paulson and with respect to which Paulson has requested registration and increasing by an additional 0.25% at the end of each subsequent 90 day period that such Registration Statement is suspended in excess of the Maximum Suspension Period, not to exceed 0.75%; provided that no Liquidated Damages shall accrue during any Suspension Period not in excess of the Maximum Suspension Period or if any Suspension Period is rescinded. Any amounts to be paid as Liquidated Damages shall be paid in cash semi-annually in arrears on the stated interest payment dates of the Convertible Notes. Any period during which the Company has delayed the filing or initial effectiveness of, or suspended the use of, a Registration Statement pursuant to this Section 4.3 is herein called a “ Suspension Period . ” The Company shall provide prompt written notice to Paulson of the commencement and termination of any Suspension Period but shall not be obligated under this Agreement to disclose the reasons therefor. Paulson shall keep the existence of each Suspension Period confidential and agrees to suspend, promptly upon receipt of the notice referred to above, the use of any prospectus relating to such registration in connection with any sale or offer to sell Registrable Securities. In addition, if the Company receives a Registration Request and the Company is then in the process of preparing to engage in a Public Sale, the Company shall inform Paulson of the Company’s intent to engage in a Public Sale and may require Paulson to withdraw such Registration Request for a period of up to 120 days so that the Company may complete its Public Sale, and such withdrawn Registration Request shall not count as one of Paulson’s two Registration Requests hereunder. In the event that the Company ceases to pursue such Public Sale, it shall promptly inform Paulson and Paulson shall be permitted to submit a new Registration Request. Notwithstanding the foregoing, if the public announcement of the material, nonpublic information that resulted in such delay or suspension is made during such Suspension Period, then such Suspension Period shall terminate without any further action of the parties and the Company shall promptly notify Paulson of such termination. To the extent that the Company initiates one or more Suspension Periods hereunder in respect of any effective Registration Statement filed pursuant to this Agreement, the Company shall maintain the effectiveness of such Registration Statement for an additional number of days equal to the aggregate amount of days that the Company implemented such Suspension Period(s). Notwithstanding the foregoing, in the event of a postponement by the Company of the filing or effectiveness of a Registration Statement pursuant to a Registration Request or in the event that a sale is not made under a Registration Statement pursuant to a Registration Request that has remained effective for at least 30 days, Paulson shall have the right to withdraw such Registration Request, and such Registration Request shall not count as one of Paulson’s two Registration Requests hereunder. The foregoing shall be without prejudice to any rights of Paulson pursuant to Section 5.

 

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4.4 Registration Rights Procedures .

(a) In connection with the Company’s obligations under Sections 4.1 and 4.2 to file a Registration Statement, the Company shall use its reasonable best efforts to cause such Registration Statement to become effective to permit the sale of such Registrable Securities in accordance with the intended method or methods of distribution thereof as expeditiously as reasonably practicable, and in connection therewith the Company shall:

(i) prepare the required Registration Statement including all exhibits and financial statements required under the Securities Act to be filed therewith, and before filing a Registration Statement or prospectus, or any amendments or supplements thereto, (x) furnish to the underwriters, if any, and to the holders of Registrable Securities covered by the applicable Registration Statement (“ Participating Holders ”), copies of all documents prepared to be filed, which documents shall be subject to the review of such underwriters and the Participating Holders and their respective counsel and make such changes to such documents as are reasonably requested by the Participating Holders and (y) except in the case of a registration under Section 4.2, not file any Registration Statement hereunder or prospectus or amendments or supplements thereto to which the underwriters, if any, or the Participating Holders shall reasonably object;

(ii) prepare and file with the SEC such pre- and post-effective amendments to such Registration Statement and supplements to the prospectus as may be (x) reasonably requested by any other Participating Holders (to the extent such request relates to information relating to such holder), or (z) necessary to keep such registration effective for the period of time required by this Agreement, and comply with provisions of the applicable securities laws with respect to the sale or other disposition of all securities covered by such Registration Statement during such period in accordance with the intended method or methods of disposition by the sellers thereof set forth in such Registration Statement;

(iii) notify the Participating Holders and the managing underwriter or underwriters, if any, and (if requested) confirm such advice in writing and provide copies of the relevant documents, as soon as reasonably practicable after notice thereof is received by the Company (a) when the applicable Registration Statement or any amendment thereto has been filed or becomes effective, and when the applicable prospectus or any amendment or supplement to such prospectus has been filed, (b) of any written comments by the SEC or any request by the SEC or any other federal or state governmental authority for amendments or supplements to such Registration Statement or such prospectus or for additional information, (c) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or any order by the SEC or any other regulatory authority preventing or suspending the use of any preliminary or final prospectus or the initiation or threatening of any proceedings for such purposes, (d) if, at any time, the representations and warranties of the Company in any applicable underwriting agreement cease to be true and correct in any material respect, and (e) of the receipt by the Company of any notification with respect to the suspension of the qualification of the

 

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Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;

(iv) promptly notify the Participating Holders and the managing underwriter or underwriters, if any, when the Company becomes aware of the happening of any event as a result of which the applicable Registration Statement or the prospectus included in such Registration Statement (as then in effect) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of such prospectus and any preliminary prospectus, in light of the circumstances under which they were made) not misleading or, if for any other reason it shall be necessary during such time period to amend or supplement such Registration Statement or prospectus in order to comply with the Securities Act and, in either case as promptly as reasonably practicable thereafter, prepare and file with the SEC, and furnish without charge to the Participating Holders and the managing underwriter or underwriters, if any, an amendment or supplement to such Registration Statement or prospectus which shall correct such misstatement or omission or effect such compliance;

(v) use its reasonable best efforts to prevent, or obtain the withdrawal of, any stop order or other order suspending the use of any preliminary or final prospectus;

(vi) promptly incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters reasonably believes should be included therein relating to the plan of distribution with respect to such Registrable Securities, and make all required filings of such prospectus supplement or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;

(vii) furnish to each Participating Holder and each underwriter, if any, without charge, as many conformed copies as such Participating Holder or underwriter may reasonably request of the applicable Registration Statement and any amendment or post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference);

(viii) deliver to each Participating Holder and each underwriter, if any, without charge, as many copies of the applicable prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Participating Holder or underwriter may reasonably request (it being understood that the Company consents to the use of such prospectus or any amendment or supplement thereto by such holder of Common Stock and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such prospectus or any amendment or supplement thereto) and such other documents as Paulson or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities by Paulson or underwriter;

 

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(ix) use its commercially reasonable efforts to register or qualify, or obtain exemption from registration or qualification for, all Registrable Securities by the time a Registration Statement is declared effective by the SEC under all applicable state securities or “blue sky” laws of such jurisdictions as Paulson, the holder of Registrable Securities or the managing underwriter or underwriter, if any, shall reasonably request in writing, keep each such registration or qualification or exemption effective and do any and all other acts and things that may be reasonably necessary or advisable to enable Paulson or the holder of Registrable Securities to consummate the disposition in each such jurisdiction of such Registrable Securities owned by Paulson or such holder; provided , however , that the Company shall not be required to (i) qualify generally to do business in any jurisdiction or to register as a broker or dealer in such jurisdiction where it would not otherwise be required to qualify but for this Section 4.4(a)(ix) and except as may be required by the Securities Act, (ii) subject itself to taxation in any such jurisdiction, or (iii) submit to the general service of process in any such jurisdiction;

(x) make such representations and warranties to the Participating Holders and the underwriters or agents, if any, in form, substance and scope as are customarily made by issuers in secondary underwritten public offerings;

(xi) enter into such customary agreements (including underwriting and indemnification agreements) and take all such other actions as the managing underwriter or underwriters, if any, reasonably request in order to expedite or facilitate the registration and disposition of such Registrable Securities;

(xii) obtain for delivery to the Participating Holders and to the underwriter or underwriters, if any, an opinion or opinions from counsel for the Company dated the effective date of the Registration Statement or, in the event of an Underwritten Offering, the date of the closing under the underwriting agreement, in customary form, scope and substance, which opinions shall be reasonably satisfactory to such Participating Holders or underwriters, as the case may be, and their respective counsel;

(xiii) in the case of an Underwritten Offering, obtain for delivery to the Company and the managing underwriter or underwriters, with copies to the Participating Holders, a cold comfort letter from the Company’s independent certified public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters as the managing underwriter or underwriters reasonably request, dated the date of execution of the underwriting agreement and brought down to the closing under the underwriting agreement;

(xiv) cooperate with each Participating Holder and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA;

 

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(xv) use its reasonable best efforts to comply with all applicable securities laws and make available to its securityholders party hereto, as soon as reasonably practicable, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder;

(xvi) make available upon reasonable notice at reasonable times and for reasonable periods for inspection by any underwriter participating in any disposition to be effected pursuant to such Registration Statement and by any attorney, accountant or other agent retained by any such underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause all of the Company’s officers, directors and employees and the independent public accountants who have certified its financial statements to make themselves available to discuss the business of the Company and to supply all information reasonably requested by any such Person in connection with such Registration Statement as shall be necessary to enable them to exercise their due diligence responsibility; provided that any such Person gaining access to information regarding the Company pursuant to this Section 4.4(a)(xvi) shall agree to hold in strict confidence and shall not make any disclosure or use any information regarding the Company that the Company determines in good faith to be confidential, and of which determination such Person is notified, unless (w) the release of such information is requested or required (by deposition, interrogatory, requests for information or documents by a governmental entity, subpoena or similar process), (x) such information is or becomes publicly known other than through a breach of this or any other agreement of which such Person has knowledge, (y) such information is or becomes available to such Person on a non-confidential basis from a source other than the Company or (z) such information is independently developed by such Person;

(xvii) in the case of an Underwritten Offering, cause the senior executive officers of the Company to participate in the customary “road show” presentations that may be reasonably requested by the managing underwriter or underwriters in any such Underwritten Offering and otherwise to facilitate, cooperate with, and participate in each proposed offering contemplated herein and customary selling efforts related thereto;

(xviii) as of the effective date of any Registration Statement relating thereto, use its reasonable best efforts to cause all such Registrable Securities to be listed on the NASDAQ Global Select Market, the NASDAQ Global Market or the New York Stock Exchange; and

(xix) as of the effective date of any Registration Statement relating thereto, provide a transfer agent and registrar for all such Registrable Securities.

(b) The Company may require each Participating Holder to furnish to the Company such information, documents and instruments from such Participating Holder as the Company may from time to time reasonably request, including, but not limited to, a

 

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questionnaire, custody agreement, power of attorney, lock-up letters and underlying agreement. Each Participating Holder agrees to furnish such information to the Company and to cooperate with the Company as reasonably necessary to enable the Company to comply with the provisions of this Agreement.

(c) Each Participating Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 4.4(a)(iv), such Participating Holder will forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement until such Participating Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 4.4(a)(iv), or until such Participating Holder is advised in writing by the Company that the use of the prospectus may be resumed, and if so directed by the Company, such Participating Holder shall deliver to the Company (at the Company’s expense) all copies of the prospectus covering such Registrable Securities, other than permanent file copies, then in such Participating Holder’s possession. In the event the Company shall give any such notice, the period during which the applicable Registration Statement is required to be maintained effective shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of Registrable Securities covered by such Registration Statement either receives the copies of the supplemented or amended prospectus contemplated by Section 4.4(a)(iv) or is advised in writing by the Company that the use of the prospectus may be resumed.

(d) Paulson shall not use any free writing prospectus (as defined in Rule 405) in connection with the sale of Registrable Securities without the prior consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed.

4.5 Indemnification .

(a) The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, Paulson and its officers, directors, employees, managers, members, partners and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) Paulson or such other indemnified Person from and against all losses, claims, damages, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses including all reasonable expenses incurred in enforcing this indemnity) (collectively, the “ Losses ”) caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of a material fact contained in any Registration Statement, prospectus or preliminary prospectus (including any issuer free writing prospectus) or any amendment thereof or supplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as the same are caused by any information furnished in writing to the Company by Paulson expressly for use therein. In connection with an Underwritten Offering and without limiting any of the Company’s other obligations under this Agreement, the Company shall also indemnify

 

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such underwriters, their officers, directors, employees and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) such underwriters or such other indemnified Person to the same extent as provided above with respect to the indemnification (and exceptions thereto) of Paulson. Reimbursements payable pursuant to the indemnification contemplated by this subsection (a) will be made by periodic payments during the course of any investigation or defense, as and when bills are received or expenses incurred.

(b) In connection with any proposed registration in which Paulson is participating pursuant to this Agreement, Paulson agrees to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) the Company or such other indemnified Person against all Losses caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of material fact contained in the Registration Statement, prospectus or preliminary prospectus (including any issuer free writing prospectus) or any amendment thereof or supplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, but only to the extent that such untrue statement or omission contained in any information or affidavit so furnished in writing by Paulson to the Company for inclusion in such Registration Statement, prospectus or preliminary prospectus and has not been corrected in a subsequent writing prior to or concurrently with the sale of the securities to the Person asserting such loss, claim, damage, liability or expense. In no event shall the liability of Paulson hereunder be greater in amount than the dollar amount of the net cash proceeds actually received by Paulson upon the sale of the securities giving rise to such indemnification obligation. The Company and Paulson shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above with respect to information so furnished in writing by such Persons for inclusion in any prospectus or Registration Statement.

(c) Any Person entitled to indemnification hereunder will (i) give prompt (but in any event within 30 days after such Person has actual knowledge of the facts constituting the basis for indemnification) written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any delay or failure to so notify the indemnifying party shall relieve the indemnifying party of its obligations hereunder only to the extent, if at all, that the indemnifying party is actually prejudiced by reason of such delay or failure; provided, further, however, that any Person entitled to indemnification hereunder shall have the right to select and employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (a) the indemnifying party has agreed in writing to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim within a reasonable time after receipt of notice of such claim from the Person entitled to indemnification hereunder and employ counsel reasonably satisfactory to such Person or (c) in the reasonable judgment of any such Person, based upon advice of counsel, a conflict of interest

 

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may exist between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person). If such defense is not assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). An indemnified party shall not be required to consent to any settlement involving the imposition of equitable remedies or involving the imposition of any obligations or admissions on such indemnified party other than financial obligations for which such indemnified party will be indemnified hereunder. No indemnifying party will be required to consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim in any one jurisdiction, unless the use of one counsel would be expected to give rise to a conflict of interest between such indemnified party and any other of such indemnified parties with respect to such claim, in which case the indemnifying party shall be obligated to pay the fees and expenses of each additional counsel.

(d) If for any reason the indemnification provided for in the preceding clauses 4.5(a) and 4.5(b) is unavailable to an indemnified party or insufficient to hold it harmless as contemplated by the preceding clauses 4.5(a) and 4.5(b), then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations, provided that Paulson shall not be required to contribute in an amount greater than the dollar amount of the net cash proceeds actually received by Paulson with respect to the sale of any securities under this Section 4. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

Section 5. Tag-Along Rights .

(a) Prior to the consummation of a Qualified Public Offering, if the Apollo Holders desire to effect any sale or transfer of shares of Common Stock representing 5% or more of the outstanding shares of Common Stock on a fully diluted basis in a single transaction or series of related transactions for value to any third party that is not an Affiliate of the Apollo Holders, other than in a Public Sale (a “ Tag-Along Transaction ”), it shall give written notice to Paulson offering Paulson the option to participate in such Tag-Along Transaction (a “ Sale Notice ”). If Paulson’s participation in the Tag-Along Transaction could require Paulson to make a filing under the HSR Act, the Sale Notice shall be delivered to Paulson at least seventy five (75) days prior to the date on which the Tag-Along Transaction is to be consummated; provided that

 

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once Paulson has complied with the requirements of the HSR Act and received the necessary approvals or otherwise determined no filing under the HSR Act is required with respect to its participation in the Tag-Along Transaction, the Apollo Holders may consummate the Tag-Along Transaction at any time thereafter. The Sale Notice shall set forth in reasonable detail the material terms and conditions of the proposed Tag-Along Transaction and identify the contemplated transferee or Group.

(b) Paulson may, by written notice to the Apollo Holders (a “ Tag-Along Notice ”) delivered within ten (10) days after the delivery of the Sale Notice (Paulson delivering such timely notice being a “ Tag-Along Holder ”), elect to sell in such Tag-Along Transaction all or a portion of the shares of Class A Common Stock held by Paulson or shares of Class A Common Stock issuable upon conversion of the Convertible Notes held by Paulson on the same terms and conditions as the Apollo Holders, provided that, without the consent of the Apollo Holders, the Proportionate Percentage of shares of Common Stock to be sold by any Tag-Along Holder will not exceed the Proportionate Percentage of shares of Common Stock that the Apollo Holders propose to sell or transfer in the applicable Tag-Along Transaction; provided that, to the extent that any Tag-Along Holder needs to convert all or a portion of its Convertible Notes into shares of Class A Common Stock in order to participate in the applicable Tag-Along Transaction, the Apollo Holders shall structure the applicable Tag-Along Transaction to enable such conversion to occur on the closing date of such Tag-Along Transaction.

(c) If Paulson does not deliver a timely Tag-Along Notice, then the Apollo Holders may thereafter consummate the Tag-Along Transaction, at the same sale price and on the same other terms and conditions as are described in the Sale Notice (including, without limitation, the number of shares of Common Stock being sold), for a period of one hundred twenty (120) days thereafter (subject to extension in the event of required regulatory approvals not having been obtained by such date but in any event no later than two hundred seventy (270) days after delivery of the Tag-Along Notice). In the event the Apollo Holders have not consummated the Tag-Along Transaction within such one hundred twenty (120) day period (subject to extension as provided above), the Apollo Holders shall not thereafter consummate a Tag-Along Transaction, without first providing a Sale Notice and an opportunity to Paulson to sell in the manner provided above. If Paulson gives the Apollo Holders a timely Tag-Along Notice, then the Apollo Holders shall use reasonable efforts to cause the prospective transferee or Group to agree to acquire all the shares of Class A Common Stock identified in all timely Tag-Along Notices, upon the same terms and conditions as are applicable to the shares of Common Stock held by the Apollo Holders. If such prospective transferee or Group is unable or unwilling to acquire all the shares of Common Stock proposed to be included in the Tag-Along Transaction upon such terms, then the Apollo Holders may elect either to cancel such Tag-Along Transaction or to allocate the maximum number of shares that such prospective transferee or Group is willing to purchase among the Apollo Holders and the Tag-Along Holders in such proportions that the Apollo Holders’ and each such Tag-Along Holder’s Proportionate Percentages are reduced on a pro rata basis to reflect the total number of shares of Common Stock to be sold. In connection with the Tag-Along Transaction, each party shall bear its own expenses.

 

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(d) For purposes of this Section 5, any holder of shares of Common Stock who has a contractual right (other than, for the avoidance of doubt, pursuant to this Agreement) to participate in such Tag-Along Transaction or any other holder of Common Stock who is otherwise participating in such Tag-Along Transaction with the consent of the Apollo Holders, shall be deemed to be a “Tag-Along Holder” under this Section 5 (provided that, for the avoidance of doubt, this Section 5 (d) is not intended to nor shall it grant any rights to any Person to participate in any Tag-Along Transaction that is not otherwise granted pursuant to Section 5 (a)-(c) above).

Section 6. Board Composition . Subject to the satisfaction of applicable laws, rules and regulations, Paulson shall have the right to either (i) nominate one member of the Board (such appointed member, the “ Paulson Appointee ”) or (ii) designate one representative (the “ Paulson Observer ”) to attend all meetings of the Board as a non-voting observer; provided , however , that such rights to nominate the Paulson Appointee or designate the Paulson Observer shall not be assigned by Paulson to any other party (other than Affiliates of Paulson) and any purported assignment shall be void ab initio and of no effect. Paulson’s right to nominate the Paulson Appointee and designate the Paulson Observer shall terminate once Paulson is no longer a party to this Agreement. Upon such termination, Paulson shall promptly cause the Paulson Appointee to resign from the Board. The Company shall use its commercially reasonable efforts to maintain a directors and officer’s liability policy and shall indemnify and advance expenses to its directors and officers, including the Paulson Appointee, with respect to all acts or omissions by them in their capacities as such to the fullest extent permitted by the law and shall enter into an indemnification agreement with the Paulson Appointee.

Section 7. Dividends and Distributions . Prior to a Qualified Public Offering, the Company shall not, and shall cause Intermediate and Realogy not to, declare or pay any dividends or any other distributions on capital stock or redeem or repurchase any shares of capital stock without Paulson’s prior written consent; provided , however , that the Company shall be permitted to declare or pay any dividends or any other distributions on capital stock or redeem or repurchase any shares of capital stock, without Paulson’s prior written consent, to the extent such declaration, payment, distribution, redemption or repurchase is permitted by Section 4.07(b)(1), (2), (4), (5), (6), (8), (12), (13), (15), (16), (17) and (19) of the indentures for such Existing Notes.

Section 8. Related Party Transactions . Prior to a Qualified Public Offering, the Company shall not, and shall cause its direct and indirect subsidiaries not to, enter into any transaction or series of transactions with the Apollo Holders or any of their respective Affiliates if such transaction involves a consideration in excess of $10 million unless (A) Paulson gives its prior written consent or (B) such transaction is (i) contemplated by the Exchange Transactions, a Preemptive Event pursuant to which Paulson accepted and was provided with, or failed to accept the Preemptive Rights Offer, or pursuant to any agreements or arrangements entered into prior to the date hereof, (ii) expressly permitted by Section 4.11(b) (Transactions with Affiliates) of the indentures pursuant to which the New Notes are issued as supplemented, amended or otherwise modified from time to time, or (iii) not materially less favorable to the Company, Intermediate,

 

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Realogy or any of their respective direct or indirect subsidiaries than those that could have been obtained in a comparable transaction with an unrelated person, as evidenced by a resolution adopted in good faith by the majority of the Board approving such transaction and an officer’s certificate certifying that such transaction complies with clause (B)(iii) of this Section 8.

Section 9. Amendment of Convertible Notes . Without the prior written consent of Paulson, the Company will not enter into any amendment or supplement of the indenture that governs the Convertible Notes that would materially adversely affect Paulson for so long as Paulson holds at least 50% of the Convertible Notes it receives in the Exchange Offers.

Section 10. Ownership of Subsidiaries . Without the prior written consent of Paulson, (i) the Company shall not permit its Subsidiaries to effectuate an initial public offering of common stock, (ii) the Company shall at all times own 100% of the capital stock of Intermediate and Intermediate shall at all times own, directly or indirectly 100% of the capital stock of Realogy and (iii) the Company shall not engage in any business or activity other than owning shares of Intermediate and Intermediate shall not engage in any business or activity other than owning shares of Realogy.

Section 11. HSR . To the extent necessary in order to enable Paulson from time to time to convert all of its then outstanding Convertible Notes into Class A Common Stock without filing a notification under the HSR Act at the time of the desired conversion, the Company will cooperate with and assist Paulson in completing an annual notification to comply with the requirements of the HSR Act. The Company shall provide Paulson with written notice at least seventy five (75) days prior to (i) a Change of Control (as such term is defined in the indentures pursuant to which the New Notes are issued), to the extent such Change of Control occurs prior to a Qualified Public Offering, and (ii) a Qualified Public Offering; provided that such Change of Control or Qualified Public Offering, as applicable, may be consummated within such seventy five (75) day period if Paulson has complied with the requirements of the HSR Act and received the necessary approvals or otherwise determined no filing under the HSR Act is required following conversion of its then outstanding Convertible Notes into Class A Common Stock. The Company shall also pay (a) any HSR Act filing fee incurred by Paulson under this Agreement and (b) all other fees and expenses (including reasonable attorneys’ fees of one counsel not to exceed $50,000 on an annual basis) incurred by Paulson in connection with such filings.

Section 12. Notices . All notices, requests, consents and other communications hereunder shall be in writing and will be deemed to have been duly delivered: (i) upon personal delivery; (ii) three (3) days after being mailed by certified or registered mail, postage prepaid, return receipt requested; (iii) one (1) Business Day after being sent via a nationally recognized overnight courier service; or (iv) upon receipt of electronic or other confirmation of transmission if sent via facsimile or electronic mail to the appropriate party at the address, facsimile number or email specified on Annex I hereto, or at such other addresses, facsimile numbers or email addresses as the parties may designate by written notice in accordance with this Section 12.

 

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Section 13. Amendment . This Agreement may be amended, modified, supplemented or waived from time to time by an instrument in writing signed by the Company, Realogy, Paulson and each Apollo Holder.

Section 14. Term; Termination . This Agreement shall only become effective on the Closing Date; provided that this Agreement shall automatically terminate if the Exchange Offers contemplated herein are terminated and abandoned. Unless earlier terminated by the mutual agreement of all the parties hereto, this Agreement shall terminate automatically upon the earlier of (i) the dissolution, liquidation or winding-up of the Company (unless the Company continues to exist after such dissolution, liquidation or winding-up as a limited liability company or in another form, whether incorporated in Delaware or another jurisdiction), (ii) with respect to each Apollo Holder, the first date on which such Apollo Holder ceases to hold, directly or indirectly, any shares of Common Stock or Convertible Notes convertible into shares of Common Stock; and (iii) with respect to Paulson, the first date on which Paulson ceases to hold, directly or indirectly, Registrable Securities (assuming all of the then outstanding Convertible Notes held by Paulson have been converted into shares of Class A Common Stock) representing at least 5% of the outstanding shares of Common Stock on a fully-diluted basis; provided that Paulson’s rights pursuant to Sections 3 (solely with respect to Equity Preemptive Events) and 5 shall survive any termination of this Agreement until the earlier of (x) the first date on which Paulson ceases to own, directly or indirectly, Convertible Notes (or shares of Class A Common Stock issued upon conversion of such Convertible Notes or a combination thereof) representing at least $15 million aggregate principal amount of the Convertible Notes acquired by Paulson on the Closing Date and (y) the consummation of a Qualified Public Offering.

Section 15. Miscellaneous Provisions .

(a) THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE 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.

(b) The Company may, without the consent of Paulson, permit any holder that acquires in the Exchange Offers Convertible Notes convertible into shares of Class A Common Stock representing 10% or more of the outstanding shares of Common Stock on an “as converted” basis to become a party to this Agreement and to give such holder the same rights as Paulson under this Agreement.

 

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(c) Whenever the context requires, the gender of all words used herein shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural.

(d) Except as provided in Section 14, any party to this Agreement who disposes of all of his, her or its Common Stock and/or Convertible Notes in conformity with the terms of this Agreement shall cease to be a party to this Agreement and shall have no further rights hereunder other than rights to indemnification under Section 4, if applicable.

(e) Each party to this Agreement acknowledges that a remedy at law for any breach or attempted breach of this Agreement will be inadequate, agrees that each other party to this Agreement shall be entitled to specific performance and injunctive and other equitable relief in case of any such breach or attempted breach and further agrees to waive (to the extent legally permissible) any legal conditions required to be met for the obtaining of any such injunctive or other equitable relief (including posting any bond in order to obtain equitable relief).

(f) This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. Exchange and delivery of this Agreement by PDF via electronic mail or by exchange of facsimile copies bearing the facsimile signature of a party shall constitute a valid and binding execution and delivery of this Agreement by such party. Such PDF and facsimile copies shall constitute legally enforceable original documents.

(g) Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, and such invalid, illegal or otherwise unenforceable provisions shall be null and void as to such jurisdiction. It is the intent of the parties, however, that any invalid, illegal or otherwise unenforceable provisions be automatically replaced by other provisions which are as similar as possible in terms to such invalid, illegal or otherwise unenforceable provisions but are valid and enforceable to the fullest extent permitted by law.

(h) Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and other documents as any other party hereto reasonably may request in order to carry out the provisions of this Agreement and the consummation of the transactions contemplated hereby, in each case, subject to the provisions hereunder, including, without limitation, those set forth in Section 3 and Section 5.

 

27


(i) The parties to this Agreement agree that jurisdiction and venue in any action brought by any party hereto pursuant to this Agreement shall exclusively and properly lie in the Delaware State Chancery Court located in Wilmington, Delaware, or (in the event that such court denies jurisdiction) any federal or state court located in the State of Delaware. By execution and delivery of this Agreement each party hereto irrevocably submits to the jurisdiction of such courts for itself and in respect of its property with respect to such action. The parties hereto irrevocably agree that venue for such action would be proper in such court, and hereby waive any objection that such court is an improper or inconvenient forum for the resolution of such action. The parties further agree that the mailing by certified or registered mail, return receipt requested to the address of such parties set forth on the signature pages hereto, of any process required by any such court shall constitute valid and lawful service of process against them, without necessity for service by any other means provided by statute or rule of court.

(j) No course of dealing between the Company, or its subsidiaries, and the other parties hereto (or any of them) or any delay in exercising any rights hereunder will operate as a waiver of any rights of any party to this Agreement. The failure of any party to enforce any of the provisions of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

(k) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHT OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS ENTERED INTO IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN.

(l) This Agreement sets forth the entire agreement of the parties hereto as to the subject matter hereof and supersedes all previous agreements among all or some of the parties hereto, whether written, oral or otherwise, as to such subject matter. Unless otherwise provided herein, any consent required by any party hereto may be withheld by such party in its sole discretion.

(m) Except as otherwise expressly provided herein, no Person not a party to this Agreement, as a third party beneficiary or otherwise, shall be entitled to enforce any rights or remedies under this Agreement.

 

28


(n) If, and as often as, there are any changes in the Common Stock and/or Convertible Notes, as applicable, by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions of this Agreement, as may be required, so that the rights, privileges, duties and obligations hereunder shall continue with respect to the Common Stock or Convertible Notes as so changed.

(o) Without limiting anything in the Charter or the Bylaws, no director of the Company shall be personally liable to the Company or any party hereto as a result of any acts or omissions taken under this Agreement in good faith.

(p) Notwithstanding anything to the contrary contained herein, (i) each Apollo Holder may assign its rights or obligations, in whole or in part, under this Agreement to any member of the Apollo Holders, and such Person shall automatically become party to this Agreement and this Agreement shall be amended and restated to provide that such Person or a designee of such Person shall have the same rights and obligations of the Apollo Holders and the Apollo Holders hereunder and (ii) Paulson may assign its rights under Section 4.2 and Section 4.5 to any third party transferee in connection with any transfer (other than pursuant to a public offering) of at least $10 million aggregate principal amount of its Subject Securities, provided that such third party transferee executes and delivers to the Company a joinder agreement in the form set forth in Exhibit A and becomes a party to this Agreement.

* * * * *

 

29


This Agreement is executed by the parties hereto to be effective as of the Closing Date.

 

REALOGY CORPORATION
By:  

/s/ Anthony E. Hull

Name:   Anthony E. Hull
Title:   EVP, CFO & Treasurer
DOMUS HOLDINGS CORP.
By:  

/s/ Anthony E. Hull

  Name:   Anthony E. Hull
  Title:   EVP, CFO & Treasurer

 

30


DOMUS INVESTMENT HOLDINGS, LLC
By:  

Apollo Management VI, L.P.,

        its manager

By:  

AIF VI Management, LLC,

        its general partner

By:  

/s/ Laurie Medley

  Name:    Laurie Medley
  Title:   Vice President
RCIV HOLDINGS, L.P. (CAYMAN)
By:  

Apollo Advisors VI (EH), L.P.,

its general partner

By:  

Apollo Advisors VI (EH-GP), Ltd.,

its general partner

By:  

/s/ Laurie Medley

  Name:   Laurie Medley
  Title:   Vice President
APOLLO INVESTMENT FUND VI, L.P.
By:  

Apollo Advisors VI, L.P.,

its general partner

By:  

Apollo Capital Management VI, LLC,

its general partner

By:  

/s/ Laurie Medley

  Name:   Laurie Medley
  Title:   Vice President

 

31


DOMUS CO-INVESTMENT HOLDINGS, LLC
By:  

Apollo Management VI, L.P.,

its managing member

By:  

AIF VI Management, LLC,

its general partner

By:  

/s/ Laurie Medley

  Name:   Laurie Medley
  Title:   Vice President

 

32


RCIV HOLDINGS (LUXEMBOURG), S.A.R.L.
By:  

/s/ Laurie Medley

Name:   Laurie Medley
Title:   Class A Manager

 

33


PAULSON & CO. INC. (ON BEHALF OF THE SEVERAL INVESTMENT FUNDS AND ACCOUNTS MANAGED BY IT)
By:  

/s/ Stuart Merzer

Name:   Stuart Merzer
Title:   Authorized Signatory

 

34


ANNEX I

ADDRESSES FOR NOTICE

DOMUS HOLDINGS CORP.

DOMUS INVESTMENT HOLDINGS, LLC

RCIV HOLDINGS, L.P. (CAYMAN)

RCIV HOLDINGS (LUXEMBOURG) S.A.R.L.

APOLLO INVESTMENT FUND VI, L.P.

DOMUS CO-INVESTMENT HOLDINGS LLC

c/o Apollo Management VI, L.P.

9 West 57 th Street, 43 rd Floor

New York, NY 10019

Attention: Marc Becker

Facsimile:

Email: Becker@apollolp.com

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Facsimile: (212) 735-2000

Attention:    Stacy J. Kanter, Esq.   
   Thomas W. Greenberg, Esq.   

PAULSON & CO. INC.

1251 Avenue of the Americas, 50th Floor

New York, NY, 10020

Attn: Mr. Alex Blades

Telephone: (212) 956-2221

Fax: (212) 351-5887

with a copy (which shall not constitute notice) to:

Kleinberg, Kaplan, Wolff & Cohen, P.C.

551 Fifth Avenue

New York, NY 10176

Facsimile: (212) 986-8866

Attn:    Max Karpel, Esq.   
   Jonathan Ain, Esq.   

 

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EXHIBIT A

JOINDER AGREEMENT

This Joinder Agreement (“ Joinder ”) is executed pursuant to the terms of the Amended and Restated Investor Securityholders Agreement dated as of January 5, 2011, a copy of which is attached hereto (the “ Investor Securityholders Agreement ”), by the transferee (“ Transferee ”) executing this Joinder. By the execution of this Joinder, the Transferee agrees as follows:

 

  1. Acknowledgement . Transferee acknowledges that Transferee is acquiring or receiving from Paulson $10 million or more in aggregate principal amount of certain Convertible Notes convertible at any time at the option of the holders thereof, in whole or in part, into shares of Class A Common Stock of Domus Holdings Corp. a Delaware corporation (the “ Company ”). Capitalized terms used herein without definition are defined in the Investor Securityholders Agreement and are used herein with the same meanings set forth therein.

 

  2. Agreement to be Bound . Transferee by delivering this Joinder agrees that it shall have only the registration rights referenced in Section 4.2 of the Securityholders Agreement and agrees to become a party to the Securityholders Agreement.

 

  3. Further Agreement . The Transferee further acknowledges and agrees that it shall not have any rights under the Securityholders Agreement other than piggy-back registration rights and certain indemnification rights.

 

  4. Effectiveness . This Joinder shall take effect and Transferee shall be bound by Sections 4.2 and 4.5 of the Investor Securityholders Agreement immediately upon the execution hereof.

 

  5. Law . THIS ADOPTION WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS ADOPTION, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

 

36


   
Name of Transferee
   
Signature
   
Date

 

37

Exhibit 10.29

 

 

 

AMENDED AND RESTATED INVESTOR SECURITYHOLDERS AGREEMENT

by and among

DOMUS HOLDINGS CORP.,

REALOGY CORPORATION,

AVENUE CAPITAL MANAGEMENT II, L.P., and

the SECURITYHOLDERS that are parties hereto

DATED AS OF JANUARY 5, 2011

 

 

 


AMENDED AND RESTATED INVESTOR SECURITYHOLDERS AGREEMENT, dated as of January 5, 2011 (this “ Agreement ”), by and among Domus Holdings Corp., a Delaware corporation (the “ Company ”), Realogy Corporation, a Delaware corporation (“ Realogy ”), Avenue Capital Management II, L.P., a Delaware limited partnership (together with its affiliated funds, (“ Avenue ”)), and the Apollo Holders (as such term is hereinafter defined).

WHEREAS, the Company, Realogy, Avenue and the Apollo Holders previously executed the Investor Securityholders Agreement, dated as of November 30, 2010, which is being amended and restated hereby;

WHEREAS, the Company owns, directly or indirectly, all of the outstanding equity interests of Realogy;

WHEREAS, Realogy has previously issued 10.50% Senior Notes due 2014, 11.00%/11.75% Senior Toggle Notes due 2014, and 12.375% Senior Subordinated Notes due 2015 (collectively, the “ Existing Notes ”);

WHEREAS, Avenue will exchange its Existing Notes for new 11.00% Senior Cash Notes due 2017, new 11.50% Senior Cash Notes due 2017, and new 12.875% Senior Subordinated Notes due 2018 (collectively, the “ Extended Maturity Notes ” and together with the Convertible Notes, the “ New Notes ”) and 11.00% Series A Convertible Notes due 2018 (the “ Series A Convertible Notes ”), 11.00% Series B Convertible Notes due 2018 (the “ Series B Convertible Notes ”) and 11.00% Series B Convertible Notes due 2018 (the “ Series C Convertible Notes ” and, together with the Series A Convertible Notes and the Series B Convertible Notes, the “ Convertible Notes ”) convertible at any time at the option of the holders thereof, in whole or in part, into shares of Class A common stock of the Company, par value $0.01 per share (the foregoing transactions, collectively, the “ Exchange Transactions ”);

WHEREAS, RCIV Holdings (Luxembourg) s.à.r.l., a Luxembourg société à responsabilité limitée (“ RCIV Luxco ”), a wholly owned subsidiary of RCIV Holdings, L.P, a Cayman Islands exempted limited partnership (“ RCIV Cayman ”), owns Existing Notes and will own Convertible Notes convertible into an equity interest in the Company upon consummation of the Exchange Transactions;

WHEREAS, Apollo Investment Fund VI, LP, a Delaware limited partnership (“ AIF VI ”), Domus Investment Holdings, LLC, a Delaware limited liability company (“ Domus Investment ”) and Domus Co-Investment Holdings, LLC, a Delaware limited liability company (“ Co-Investment Holdings ”), each own capital stock of the Company; and

WHEREAS, each of the Company, the Apollo Holders and Avenue deem it to be in their respective best interests to enter into this Agreement to set forth their agreements with respect to certain matters concerning the Company.

 

2


NOW, THEREFORE, in consideration of the premises and of the mutual consents and obligations hereinafter set forth, intending to be legally bound, the parties hereto hereby agree as follows:

Section 1. Definitions .

As used in this Agreement:

Accelerated Issuance ” has the meaning set forth in Section 2.

Acquisition Counterparty ” has the meaning set forth in Section 2.

Affiliate ” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. 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.

Agreement ” has the meaning set forth in the preamble.

AIF VI ” has the meaning set forth in the preamble.

Apollo Holders ” means AIF VI, Domus Investment, RCIV Cayman, RCIV Luxco and Co-Investment Holdings, collectively with each of their respective Affiliates (including, for avoidance of doubt, any syndication vehicles).

Avenue ” has the meaning set forth in the recitals.

Business Day ” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close.

Class A Common Stock ” means the Class A common stock of the Company, par value $.01 per share.

Class B Common Stock ” means the Class B common stock of the Company, par value $.01 per share.

Closing Date ” means the date of the closing of the Exchange Transactions.

Co-Investment Holdings ” has the meaning set forth in the recitals.

Common Stock ” means the Class A Common Stock, and the Class B Common Stock, collectively, and any class of common stock into which the Class A Common Stock or Class B Common Stock may be reclassified, converted or exchanged.

Company ” has the meaning set forth in the preamble.

 

3


Company Offered Securities ” has the meaning set forth in Section 2.

Convertible Notes ” has the meaning set forth in the recitals.

Debt Preemptive Event ” has the meaning set forth in Section 2.

Domus Investment ” has the meaning set forth in the recitals.

Equity Preemptive Event ” has the meaning set forth in Section 2.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

Exchange Transactions ” has the meaning set forth in the recitals.

Existing Notes ” has the meaning set forth in the recitals.

Extended Maturity Notes ” has the meaning set forth in the recitals.

Group ” has the meaning ascribed to such term in Section 13(d)(3) of the Exchange Act.

Intermediate ” shall mean Domus Intermediate Holdings Corp., a Delaware corporation.

IPO ” means the initial public offering of shares of the Common Stock pursuant to an effective Registration Statement under the Securities Act.

Lock-Up Period ” has the meaning set forth in Section 3.1(c).

Lock-Up Exceptions ” has the meaning set forth in Section 3.1(c).

Losses ” has the meaning set forth in Section 3.3(a).

New Notes ” has the meaning set forth in the recitals.

Participating Holders ” has the meaning set forth in Section 3.2(a).

Person ” shall be construed broadly and shall include, without limitation, an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity or any department, agency or political subdivision thereof or any other entity.

Piggy-Back Notice ” has the meaning set forth in Section 3.1(a).

Piggy-Back Registration Right ” has the meaning set forth in Section 3.1(a)

Preemptive Event ” has the meaning set forth in Section 2.

Preemptive Rights Offer ” has the meaning set forth in Section 2.

 

4


Preemptive Rights Offer Notice ” has the meaning set forth in Section 2.

Pro Rata Debt Ownership ” shall be a fraction of the Company Offered Securities or, in the case of a Third Party Debt Financing, a fraction of the aggregate principal amount of indebtedness to be incurred, determined by dividing (A) the aggregate principal amount of New Notes then owned by Avenue plus the aggregate principal amount of Convertible Notes converted into Class A Common Stock by Avenue to the extent such Class A Common Stock is still held by Avenue by (B) $6.985 billion (which is the total outstanding indebtedness of the Company and Realogy on a consolidated basis as of November 30, 2010).

Proportionate Debt Percentage ” shall mean a number (expressed as a percentage) equal to a fraction, the numerator of which is the aggregate principal amount of the debt proposed to be purchased by the holder of the Existing Notes or New Notes in connection with a debt financing to third parties and the denominator of which is the aggregate principal amount of the Existing Notes or New Notes owned by such holder.

Proportionate Percentage ” with respect to any holder of Convertible Notes (or shares of Class A Common Stock issued upon conversion of such Convertible Notes or a combination thereof), shall mean a number (expressed as a percentage) equal to a fraction, the numerator of which is the total number of shares of Common Stock on an as-converted basis proposed to be transferred by such holder in a proposed Tag-Along Transaction and the denominator of which is the total number of shares of Common Stock on an as-converted basis owned by such holder.

Public Sale ” means any sale, occurring simultaneously with or after an IPO, of Common Stock to the public pursuant to an offering registered under the Securities Act or to the public in the manner described by the provisions of Rule 144 promulgated thereunder, other than an offering relating to employee incentive plans.

Qualified Public Offering ” means (a) an Underwritten Offering of shares of Class A Common Stock by the Company or any selling securityholders pursuant to an effective Registration Statement filed by the Company with the SEC (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 Class A 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 $200 million and (b) the listing of Company Class A Common Stock on the NASDAQ Global Select Market, the NASDAQ Global Market, the New York Stock Exchange or any successor exchange to the foregoing.

RCIV Cayman ” has the meaning set forth in the recitals.

RCIV Luxco ” has the meaning set forth in the recitals.

Realogy ” has the meaning set forth in the preamble.

 

5


Registrable Securities ” shall mean (i) the shares of Class A Common Stock issued upon the conversion of the Convertible Notes, (ii) the shares of Class A Common Stock acquired in connection with the exercise of preemptive rights in accordance with Section 2, (iii) any and all shares of Common Stock issued or issuable with respect to Registrable Securities by way of stock dividend or a stock split; provided, that any Registrable Securities shall cease to be Registrable Securities when (A) a Registration Statement with respect to the sale of such Registrable Securities has been declared effective under the Securities Act and such Registrable Securities have been disposed of pursuant to such Registration Statement, (B) such Registrable Securities have been disposed of in reliance upon Rule 144 (or any similar provision then in force) under the Securities Act or (C) except for a transfer in accordance with Section 8(p), such Registrable Securities shall have been otherwise transferred to a third party; and provided, further, that any securities that have ceased to be Registrable Securities shall not thereafter become Registrable Securities and any security that is issued or distributed in respect of securities that have ceased to be Registrable Securities is not a Registrable Security and (iv) any shares of Common Stock required to be registered by the Company on behalf of any other Person possessing registration rights pursuant to another agreement in which the Company had granted such rights.

Registration Statement ” means any shelf registration statement or other registration statement filed with the SEC with respect to the Class A Common Stock.

Sale Notice ” has the meaning set forth in Section 4.

SEC ” means the Securities and Exchange Commission.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Series A Convertible Notes ” has the meaning set forth in the recitals.

Series B Convertible Notes ” has the meaning set forth in the recitals.

Series C Convertible Notes ” has the meaning set forth in the recitals.

Subject Securities ” means shares of Class A Common Stock, the Convertible Notes and any shares of Class A Common Stock issuable upon conversion thereof.

Syndicated Third Party Bank Financing ” means a Third Party Debt Financing involving loans provided by a syndicate of banks, financial institutions and other institutional lenders.

Tag-Along Holder ” has the meaning set forth in Section 4(b).

Tag-Along Notice ” has the meaning set forth in Section 4(b).

Tag-Along Transaction ” has the meaning set forth in Section 4(a).

Third Party Debt Financing ” has the meaning set forth in Section 2.

 

6


Third Party Debt Financing Notice ” has the meaning set forth in Section 2.

Third Party Debt Financing Offer ” has the meaning set forth in Section 2.

Underwritten Offering ” means a sale of shares of Class A Common Stock to an underwriter for reoffering to the public.

Underwritten Third Party Notes Offering ” means a Third Party Debt Financing involving a public or broadly marketed offering (as determined in good faith by the Board of Directors of the Company or a committee thereof) of debt securities.

Section 2. Preemptive Events . If any time prior to (but not including) a Qualified Public Offering, (i) the Company or Realogy proposes to issue or sell any equity securities (or securities convertible into, issuable upon exercise of or exchangeable for any such equity securities) (not including (a) securities issued pursuant to any equity compensation plans, (b) securities issued as a dividend or distribution on all shares of Common Stock or upon any stock split, recapitalization or other subdivision or combination of securities, (c) securities issued upon the exercise, conversion or exchange of any options, warrants or convertible securities issued prior to the date hereof or for which Avenue has had the opportunity to subscribe for pursuant to its preemptive rights (and which shall include the Convertible Notes), (d) securities issued (other than to an Apollo Holder) (X) as consideration in an acquisition (whether by stock sale, merger, recapitalization, asset purchase or otherwise) or (Y) in connection with a joint venture or strategic alliance or (ii) the Company or Realogy proposes to issue or sell debt to any Affiliate of Realogy or the Company (for the avoidance of doubt, such Affiliate of Realogy or the Company shall not include the Company, Realogy, Intermediate or any subsidiary of Realogy) (collectively, “ Company Offered Securities ”), the Company shall give notice in writing (the “ Preemptive Rights Offer Notice ”) to Avenue of such proposed issuance or sale of equity (an “ Equity Preemptive Event ”) or debt (a “ Debt Preemptive Event ” and, together with an Equity Preemptive Event, a “ Preemptive Event ”). The Preemptive Rights Offer Notice shall describe the terms of the proposed transaction, identify the proposed purchaser(s), and contain an offer (the “ Preemptive Rights Offer ”) to sell Company Offered Securities to Avenue, at the same price, on the same terms and for the same consideration to be paid by the proposed purchaser(s) as set forth in this Section 2. With respect to an Equity Preemptive Event, Avenue shall have the right to participate in the Preemptive Event up to its respective pro rata fully-diluted portion of its equity ownership (which shall be a fraction of the Company Offered Securities determined by dividing (A) the number of shares of Common Stock then owned by Avenue on a fully-diluted basis assuming the conversion of all of its Convertible Notes by (B) the number of shares of Common Stock then outstanding (before giving effect to the Preemptive Event) on a fully-diluted basis assuming, among other things, the conversion of all Convertible Notes then outstanding. With respect to a Debt Preemptive Event, Avenue shall have the right to participate in the Preemptive Event up to its Pro Rata Debt Ownership. The Preemptive Rights Offer Notice shall be delivered at least fifteen (15) days prior to the relevant issuance or sale. If Avenue fails to accept in writing the Preemptive Rights Offer by the tenth (10th) day after the Company’s delivery of the Preemptive Rights Offer Notice, Avenue shall have no further rights with respect to the Preemptive Event; provided, however, that if (i) any of the terms of the Preemptive Event, taken as a whole, materially change after the date of the Preemptive Rights Offer Notice or (ii) the issuance or sale of the Company Offered Securities pursuant to the Preemptive Event shall

 

7


not have occurred within one hundred twenty (120) days after the delivery of the Preemptive Rights Offer Notice (subject to extension in the event of required regulatory approvals not having been obtained by such date but in any event no later than one hundred eighty (180) days after delivery of the Preemptive Rights Offer Notice), then, in each case, any additional issuances shall again be subject to this Section 2 and the Company shall be required to give a new Preemptive Rights Offer Notice within the time period described above and Avenue shall have an additional ten (10) days to accept in writing the Preemptive Rights Offer. Notwithstanding any of the foregoing, following any Preemptive Rights Offer Notice relating to Company Offered Securities, the Company may immediately issue, prior to the expiration of the time periods above, the Company Offered Securities whenever it determines that it would be to the advantage of the Company for it to issue such Company Offered Securities (an “ Accelerated Issuance ”). To the extent that the Company effects an Accelerated Issuance and Avenue accepts in writing the Preemptive Rights Offer, the Company will issue to Avenue additional Company Offered Securities at the same price, on the same terms and for the same consideration paid by the purchaser(s) in the Accelerated Issuance, such that the percentage of the Company Offered Securities issued to Avenue would equal the percentage of the Company Offered Securities Avenue would have otherwise received in the absence of an Accelerated Issuance in accordance with this Section 2. In addition, if at any time prior to a Qualified Public Offering, the Company or Realogy proposes to incur indebtedness (other than indebtedness (X) incurred in the ordinary course of business, (Y) incurred in favor of the seller, target, acquisition or merger counterparty or their Affiliates (each, an “ Acquisition Counterparty ”) or assumed from an Acquisition Counterparty as consideration in an acquisition (whether by stock sale, merger, recapitalization, asset purchase or otherwise) or (Z) incurred in connection with a joint venture or strategic alliance in favor of such joint venture or strategic alliance or joint venture partner or strategic partner or their Affiliates) pursuant to a new debt financing with one or more third parties (a “ Third Party Debt Financing ”), then the Company shall use its commercially reasonable efforts to allow Avenue to participate, up to its Pro Rata Debt Ownership, at the same price, on the same terms and for the same consideration as other participants in the financing; provided however that if the Apollo Holders participate in such debt financing, then Avenue shall have the right to participate in the debt financing at the same price, on the same terms and for the same consideration as the Apollo Holders, provided that the Proportionate Debt Percentage of debt to be purchased by Avenue shall not exceed the Proportionate Debt Percentage of debt that the Apollo Holders elect to acquire in such debt financing. The Company shall deliver written notice (the “ Third Party Debt Financing Notice ”) to Avenue of such proposed Third Party Debt Financing electronically via facsimile or electronic mail (i) in the case of an Underwritten Third Party Notes Offering, promptly upon the commencement of the marketing thereof, (ii) in the case of a Syndicated Third Party Bank Financing, promptly after the beginning of the marketing period for such Syndicated Third Party Bank Financing, and (iii) in the case of any other Third Party Debt Financing, at least ten (10) days prior to the relevant incurrence, issuance or sale. The Third Party Debt Financing Notice shall describe the anticipated terms (provided that the description of such terms may be limited to the information provided to other potential investors in the Third Party Debt Financing) of the proposed transaction, contain an offer (the “ Third Party Debt Financing Offer ”) to Avenue to participate in the Third Party Debt Financing at the same price, on the same terms and for the same consideration to be paid by other potential investors in the proposed Third Party Debt Financing or by the Apollo Holders if the Apollo Holders participate in such proposed debt financing, and, in the case of an Underwritten Third Party

 

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Notes Offering or a Syndicated Third Party Bank Financing, indicate the anticipated length of the marketing period, and provide instructions, including any relevant contact information, on how to participate in the offering. If Avenue fails to accept the Third Party Debt Financing Offer, (i) in the case of an Underwritten Third Party Notes Offering or a Syndicated Third Party Bank Financing, by (a) indicating their interest in participating in the Third Party Debt Financing in accordance with the instructions included in the Third Party Debt Financing Notice and (b) promptly notifying the Company in writing electronically via facsimile or electronic mail, prior to the end of the marketing period for such transaction indicated on the Third Party Debt Financing Notice, or (ii) in the case of any other Third Party Debt Financing, in writing electronically via facsimile or electronic mail to the Company by the tenth (10th) day after the Company’s delivery of the Third Party Debt Financing Notice, Avenue shall have no further rights with respect to the Third Party Debt Financing; provided, however, that if the relevant incurrence, issuance or sale in a Third Party Debt Financing shall not have occurred within one hundred twenty (120) days after the delivery of the Third Party Debt Financing Notice (subject to extension in the event of required regulatory approvals not having been obtained by such date but in any event no later than one hundred eighty (180) days after delivery of the Third Party Debt Financing Notice), then any additional incurrence, issuance or sale shall again be subject to this Section 3 and the Company shall be required to give a new Third Party Debt Financing Notice within the time periods described above and Avenue shall have an additional ten (10) days to accept in writing the Third Party Debt Financing Notice.

Section 3. Registration Rights.

3.1 Piggy-Back Registration Rights .

(a) Participation . Subject to Section 3.1(b), if at any time the Company proposes to register any of its shares of Common Stock under the Securities Act (other than a registration on Form S-4 or S-8 or any successor form to such Forms or any registration of securities as it relates to an offering and sale to management of the Company pursuant to any employee stock plan or other employee benefit plan arrangement or pursuant to a shelf registration statement), whether for its own account or for the account of one or more stockholders of the Company, and the registration form to be used may be used for any registration of Registrable Securities, then the Company shall give prompt written notice (the “ Piggy-Back Notice ”) to Avenue of its intention to effect such a registration and, subject to Section 3.1(b), shall include in such registration all Registrable Securities with respect to which the Company has received a written request from Avenue for inclusion therein within 15 days after the receipt of the Piggy-Back Notice. The Piggy-Back Notice shall offer Avenue the right, subject to Section 3.1(b) (the “ Piggy-Back Registration Right ”), to register such number of shares of Registrable Securities as Avenue may request and shall set forth (i) the anticipated filing date of such Registration Statement and (ii) the number of shares of Class A Common Stock that is proposed to be included in such Registration Statement.

(b) Underwriters’ Cutback . Notwithstanding the foregoing, if a registration pursuant to this Section 3.1 involves an Underwritten Offering and the managing underwriter or underwriters of such proposed Underwritten Offering advises the Company that the total or kind

 

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of securities which Avenue and any other persons or entities intend to include in such offering would be reasonably likely to adversely affect the price, timing or distribution of the securities offered in such offering, then the number of securities proposed to be included in such registration shall be allocated among the Company and all of the selling securityholders, such that the number of securities that each such Person shall be entitled to sell in the Underwritten Offering shall be included in the following order:

(i) In the event of an exercise by any Person possessing demand rights pursuant to another agreement in which the Company has granted demand rights:

(1) first, the Registrable Securities held by the Person exercising a demand right pursuant to any other agreement in which the Company has granted demand rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person in connection with such registration;

(2) second, the Registrable Securities held by the Persons requesting their Registrable Securities to be included in such registration pursuant to the terms of Section 3.1(a) or pursuant to any other agreement in which the Company has granted piggy-back registration rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person at the time of such registration; and

(3) third, the securities to be issued and sold by the Company in such registration.

(ii) In all other cases:

(1) first, the securities to be issued and sold by the Company in such registration; and

(2) second, the Registrable Securities held by the Persons requesting their Registrable Securities to be included in such registration pursuant to the terms of Section 3.1(a) or pursuant to any other agreement in which the Company has granted Piggy-Back registration rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person at the time of such registration.

Notwithstanding anything to the contrary set forth in this Section 3.1(b), if the managing underwriter for an Underwritten Offering advises the Company that the inclusion of the number of shares of Common Stock proposed to be included in any registration by any particular Person would interfere with the successful marketing (including pricing) of such shares to be offered thereby, then the number of such shares proposed to be included in such registration by such Person shall be reduced to the lower of the number of such shares that the managing underwriter advises that such Person may sell in the Underwritten Offering and the number of such shares calculated pursuant to the foregoing.

 

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(c) Lock-up . If the Company at any time shall register shares of Common Stock under the Securities Act for sale to the public in an underwritten offering and if requested by the lead managing underwriter, Avenue agrees not to sell publicly, make any short sale of, grant any option for the purchase of, or otherwise dispose of, any capital stock of the Company without the prior written consent of the lead managing underwriter, during a period of not more than ninety (90) days (or up to one hundred eighty (180) days if requested by the lead managing underwriter in connection with a Qualified Public Offering) commencing on the effective date of the Registration Statement (the “Lock-Up Period”); provided, however, that, if any holders of Registrable Securities shall be subject to a shorter period or receives more advantageous terms relating to the Lock-Up Period, then the Lock-Up Period shall be such shorter period and also on such more advantageous terms and Avenue shall be released from its obligations under this clause to the extent any other holder of Registrable Securities is released. Notwithstanding the foregoing, Avenue shall be entitled to transfer any shares of Class A Common Stock (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to Affiliates of Avenue where such Affiliates agree to be bound in writing by the restrictions set forth herein, (iii) with the prior written consent of the Company, (iv) to a nominee or custodian of a Person to whom a disposition or transfer would be permitted hereunder, provided that such nominee or custodian agrees to be bound in writing by the restrictions set forth herein, (v) following the consummation of a Qualified Public Offering, in transactions relating to shares of Common Stock or other securities acquired in open market transactions, or (vi) to any wholly-owned subsidiary or any stockholders, partners, members or similar persons of Avenue, provided that such Person agrees to be bound in writing by the restrictions set forth herein; provided that, in the case of this clause (i), (iv), (v) and (vi), such transfers do not give rise to a requirement to disclose in any public report or filing with the SEC and Avenue does not otherwise voluntarily effect any public filing or report regarding such transfers (collectively, the “ Lock-Up Exceptions ”). In addition, if requested by the lead managing underwriter, in connection with a public offering, Avenue shall enter into a customary lock-up agreement with the lead managing underwriter. If the Company notifies Avenue of its intention to consummate a Qualified Public Offering, on its own behalf or in connection with an exercise by any Person possessing demand rights pursuant to another agreement in which the Company has granted demand rights, Avenue agrees that it shall not sell publicly, make any short sale of, grant any option for the purchase of, or otherwise dispose, any shares of Class A Common Stock (except, in each case, as part of the Qualified Public Offering, if permitted) during the period beginning on the delivery or receipt of such notice until the expiration of the Lock-Up Period, subject to the Lock-Up Exceptions.

(d) Company Control . The Company may decline to file a Registration Statement after giving the Piggy-Back Notice, or withdraw a Registration Statement after filing and after such Piggy-Back Notice, but prior to the effectiveness of the Registration Statement, provided that the Company shall promptly notify Avenue in writing of any such action and provided further that the Company shall bear all reasonable expenses incurred by Avenue or otherwise in connection with such withdrawn Registration Statement.

(e) Participation in Underwritten Offerings . No Person may participate in any Underwritten Offering under this Section 3.1 unless such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Persons entitled to approve such arrangements and (ii) completes and executes all questionnaires, powers

 

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of attorney, indemnities, underwriting agreements, lock-ups and other documents required for such underwriting arrangements. Nothing in this Section 3.1(e) shall be construed to create any additional rights regarding the Piggy-Back registration of Registrable Securities in any Person otherwise than as set forth herein.

(f) Expenses . The Company will pay all registration fees and other reasonable expenses in connection with each registration of Registrable Securities requested pursuant to this Section 3, including reasonable fees and expenses of one counsel to the Participating Holders which shall not exceed $100,000; provided, that each Participating Holder shall pay any remaining counsel fees and expenses and all applicable underwriting fees, discounts and similar charges (pro rata based on the securities sold).

(g) Publicly Available Information . If the Company is not required to file reports under the Securities Act or the Exchange Act, the Company will make publicly available such necessary information for so long as necessary to permit sales pursuant to Rule 144 under the Securities Act.

3.2 Registration Rights Procedures.

(a) In connection with the Company’s obligation under Section 3.1 to file a Registration Statement, the Company shall use its reasonable best efforts to cause such Registration Statement to become effective to permit the sale of such Registrable Securities in accordance with the intended method or methods of distribution thereof as expeditiously as reasonably practicable, and in connection therewith the Company shall:

(i) prepare the required Registration Statement including all exhibits and financial statements required under the Securities Act to be filed therewith, and before filing a Registration Statement or prospectus, or any amendments or supplements thereto, (x) furnish to the underwriters, if any, and to the holders of Registrable Securities covered by the applicable Registration Statement (“ Participating Holders ”), copies of all documents prepared to be filed, which documents shall be subject to the review of such underwriters and the Participating Holders and their respective counsel and make such changes to such documents as are reasonably requested by the Participating Holders and (y) except in the case of a registration under Section 3.1, not file any Registration Statement hereunder or prospectus or amendments or supplements thereto to which the underwriters, if any, or the Participating Holders shall reasonably object;

(ii) prepare and file with the SEC such pre- and post-effective amendments to such Registration Statement and supplements to the prospectus as may be (x) reasonably requested by any other Participating Holder (to the extent such request relates to information relating to such holder), or (z) necessary to keep such registration effective for the period of time required by this Agreement, and comply with provisions of the applicable securities laws with respect to the sale or other disposition of all securities covered by such Registration Statement during such period in accordance with the intended method or methods of disposition by the sellers thereof set forth in such Registration Statement;

 

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(iii) notify the Participating Holders and the managing underwriter or underwriters, if any, and (if requested) confirm such advice in writing and provide copies of the relevant documents, as soon as reasonably practicable after notice thereof is received by the Company (a) when the applicable Registration Statement or any amendment thereto has been filed or becomes effective, and when the applicable prospectus or any amendment or supplement to such prospectus has been filed, (b) of any written comments by the SEC or any request by the SEC or any other federal or state governmental authority for amendments or supplements to such Registration Statement or such prospectus or for additional information, (c) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or any order by the SEC or any other regulatory authority preventing or suspending the use of any preliminary or final prospectus or the initiation or threatening of any proceedings for such purposes, (d) if, at any time, the representations and warranties of the Company in any applicable underwriting agreement cease to be true and correct in any material respect, and (e) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;

(iv) promptly notify the Participating Holders and the managing underwriter or underwriters, if any, when the Company becomes aware of the happening of any event as a result of which the applicable Registration Statement or the prospectus included in such Registration Statement (as then in effect) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of such prospectus and any preliminary prospectus, in light of the circumstances under which they were made) not misleading or, if for any other reason it shall be necessary during such time period to amend or supplement such Registration Statement or prospectus in order to comply with the Securities Act and, in either case as promptly as reasonably practicable thereafter, prepare and file with the SEC, and furnish without charge to the Participating Holders and the managing underwriter or underwriters, if any, an amendment or supplement to such Registration Statement or prospectus which shall correct such misstatement or omission or effect such compliance;

(v) use its reasonable best efforts to prevent, or obtain the withdrawal of, any stop order or other order suspending the use of any preliminary or final prospectus;

(vi) promptly incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters reasonably believes should be included therein relating to the plan of distribution with respect to such Registrable Securities, and make all required filings of such prospectus supplement or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;

(vii) furnish to each Participating Holder and each underwriter, if any, without charge, as many conformed copies as such Participating Holder or underwriter may reasonably request of the applicable Registration Statement and any amendment or post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference);

 

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(viii) deliver to each Participating Holder and each underwriter, if any, without charge, as many copies of the applicable prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Participating Holder or underwriter may reasonably request (it being understood that the Company consents to the use of such prospectus or any amendment or supplement thereto by such holder of Common Stock and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such prospectus or any amendment or supplement thereto) and such other documents as Avenue or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities by Avenue or underwriter;

(ix) use its commercially reasonable efforts to register or qualify, or obtain exemption from registration or qualification for, all Registrable Securities by the time a Registration Statement is declared effective by the SEC under all applicable state securities or “blue sky” laws of such jurisdictions as Avenue, the holder of Registrable Securities or the managing underwriter or underwriter, if any, shall reasonably request in writing, keep each such registration or qualification or exemption effective and do any and all other acts and things that may be reasonably necessary or advisable to enable Avenue or the holder of Registrable Securities to consummate the disposition in each such jurisdiction of such Registrable Securities owned by Avenue or such holder; provided, however, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction or to register as a broker or dealer in such jurisdiction where it would not otherwise be required to qualify but for this Section 3.2(a)(ix) and except as may be required by the Securities Act, (ii) subject itself to taxation in any such jurisdiction, or (iii) submit to the general service of process in any such jurisdiction;

(x) make such representations and warranties to the Participating Holders and the underwriters or agents, if any, in form, substance and scope as are customarily made by issuers in secondary underwritten public offerings;

(xi) enter into such customary agreements (including underwriting and indemnification agreements) and take all such other actions as the managing underwriter or underwriters, if any, reasonably request in order to expedite or facilitate the registration and disposition of such Registrable Securities;

(xii) obtain for delivery to the Participating Holders and to the underwriter or underwriters, if any, an opinion or opinions from counsel for the Company dated the effective date of the Registration Statement or, in the event of an Underwritten Offering, the date of the closing under the underwriting agreement, in customary form, scope and substance, which opinions shall be reasonably satisfactory to such Participating Holder or underwriters, as the case may be, and their respective counsel;

(xiii) in the case of an Underwritten Offering, obtain for delivery to the Company and the managing underwriter or underwriters, with copies to the Participating Holders, a cold comfort letter from the Company’s independent certified public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters as the managing underwriter or underwriters reasonably request, dated the date of execution of the underwriting agreement and brought down to the closing under the underwriting agreement;

 

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(xiv) cooperate with each Participating Holder and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA;

(xv) use its reasonable best efforts to comply with all applicable securities laws and make available to its securityholders party hereto, as soon as reasonably practicable, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder;

(xvi) make available upon reasonable notice at reasonable times and for reasonable periods for inspection by any underwriter participating in any disposition to be effected pursuant to such Registration Statement and by any attorney, accountant or other agent retained by any such underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause all of the Company’s officers, directors and employees and the independent public accountants who have certified its financial statements to make themselves available to discuss the business of the Company and to supply all information reasonably requested by any such Person in connection with such Registration Statement as shall be necessary to enable them to exercise their due diligence responsibility; provided that any such Person gaining access to information regarding the Company pursuant to this Section 3.2(a)(xvi) shall agree to hold in strict confidence and shall not make any disclosure or use any information regarding the Company that the Company determines in good faith to be confidential, and of which determination such Person is notified, unless (w) the release of such information is requested or required (by deposition, interrogatory, requests for information or documents by a governmental entity, subpoena or similar process), (x) such information is or becomes publicly known other than through a breach of this or any other agreement of which such Person has knowledge, (y) such information is or becomes available to such Person on a non-confidential basis from a source other than the Company or (z) such information is independently developed by such Person;

(xvii) in the case of an Underwritten Offering, cause the senior executive officers of the Company to participate in the customary “road show” presentations that may be reasonably requested by the managing underwriter or underwriters in any such Underwritten Offering and otherwise to facilitate, cooperate with, and participate in each proposed offering contemplated herein and customary selling efforts related thereto;

(xviii) as of the effective date of any Registration Statement relating thereto, use its reasonable best efforts to cause all such Registrable Securities to be listed on the NASDAQ Global Select Market, the NASDAQ Global Market or the New York Stock Exchange; and

(xix) as of the effective date of any Registration Statement relating thereto, provide a transfer agent and registrar for all such Registrable Securities.

(b) The Company may require each Participating Holder to furnish to the Company such information, documents and instruments from such Participating Holder as the Company may from time to time reasonably request, including, but not limited to, a questionnaire, custody agreement, power of attorney, lock-up letters and underlying agreement.

 

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Each Participating Holder agrees to furnish such information to the Company and to cooperate with the Company as reasonably necessary to enable the Company to comply with the provisions of this Agreement.

(c) Each Participating Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.2(a)(iv), such Participating Holder will forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement until such Participating Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3.2(a)(iv), or until such Participating Holder is advised in writing by the Company that the use of the prospectus may be resumed, and if so directed by the Company, such Participating Holder shall deliver to the Company (at the Company’s expense) all copies of the prospectus covering such Registrable Securities, other than permanent file copies, then in such Participating Holder’s possession. In the event the Company shall give any such notice, the period during which the applicable Registration Statement is required to be maintained effective shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of Registrable Securities covered by such Registration Statement either receives the copies of the supplemented or amended prospectus contemplated by Section 3.2(a)(iv) or is advised in writing by the Company that the use of the prospectus may be resumed.

(d) Avenue shall not use any free writing prospectus (as defined in Rule 405) in connection with the sale of Registrable Securities without the prior consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed.

3.3 Indemnification .

(a) The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, Avenue and its officers, directors, employees, managers, members, partners and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) Avenue or such other indemnified Person from and against all losses, claims, damages, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses including all reasonable expenses incurred in enforcing this indemnity) (collectively, the “ Losses ”) caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of a material fact contained in any Registration Statement, prospectus or preliminary prospectus (including any issuer free writing prospectus) or any amendment thereof or supplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as the same are caused by any information furnished in writing to the Company by Avenue expressly for use therein. In connection with an Underwritten Offering and without limiting any of the Company’s other obligations under this Agreement, the Company shall also indemnify such underwriters, their officers, directors, employees and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) such underwriters or such other indemnified Person to the same extent as provided above with respect to the indemnification (and exceptions thereto) of Avenue. Reimbursements payable

 

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pursuant to the indemnification contemplated by this subsection (a) will be made by periodic payments during the course of any investigation or defense, as and when bills are received or expenses incurred.

(b) In connection with any proposed registration in which Avenue is participating pursuant to this Agreement, Avenue agrees to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) the Company or such other indemnified Person against all Losses caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of material fact contained in the Registration Statement, prospectus or preliminary prospectus (including any issuer free writing prospectus) or any amendment thereof or supplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, but only to the extent that such untrue statement or omission contained in any information or affidavit so furnished in writing by Avenue to the Company for inclusion in such Registration Statement, prospectus or preliminary prospectus and has not been corrected in a subsequent writing prior to or concurrently with the sale of the securities to the Person asserting such loss, claim, damage, liability or expense. In no event shall the liability of Avenue hereunder be greater in amount than the dollar amount of the net cash proceeds actually received by Avenue upon the sale of the securities giving rise to such indemnification obligation. The Company and Avenue shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above with respect to information so furnished in writing by such Persons for inclusion in any prospectus or Registration Statement.

(c) Any Person entitled to indemnification hereunder will (i) give prompt (but in any event within 30 days after such Person has actual knowledge of the facts constituting the basis for indemnification) written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any delay or failure to so notify the indemnifying party shall relieve the indemnifying party of its obligations hereunder only to the extent, if at all, that the indemnifying party is actually prejudiced by reason of such delay or failure; provided, further, however, that any Person entitled to indemnification hereunder shall have the right to select and employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (a) the indemnifying party has agreed in writing to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim within a reasonable time after receipt of notice of such claim from the Person entitled to indemnification hereunder and employ counsel reasonably satisfactory to such Person or (c) in the reasonable judgment of any such Person, based upon advice of counsel, a conflict of interest may exist between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person). If such defense is not assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld).

 

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An indemnified party shall not be required to consent to any settlement involving the imposition of equitable remedies or involving the imposition of any obligations or admissions on such indemnified party other than financial obligations for which such indemnified party will be indemnified hereunder. No indemnifying party will be required to consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim in any one jurisdiction, unless the use of one counsel would be expected to give rise to a conflict of interest between such indemnified party and any other of such indemnified parties with respect to such claim, in which case the indemnifying party shall be obligated to pay the fees and expenses of each additional counsel.

(d) If for any reason the indemnification provided for in the preceding clauses 3.3(a) and 3.3(b) is unavailable to an indemnified party or insufficient to hold it harmless as contemplated by the preceding clauses 3.3(a) and 3.3(b), then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations, provided that Avenue shall not be required to contribute in an amount greater than the dollar amount of the net cash proceeds actually received by Avenue with respect to the sale of any securities under this Section 4. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

Section 4. Tag-Along Rights .

(a) Prior to the consummation of a Qualified Public Offering, if the Apollo Holders desire to effect any sale or transfer of shares of Common Stock representing 5% or more of the outstanding shares of Common Stock on a fully diluted basis in a single transaction or series of related transactions for value to any third party that is not an Affiliate of the Apollo Holders, other than in a Public Sale (a “ Tag-Along Transaction ”), it shall give written notice to Avenue offering Avenue the option to participate in such Tag-Along Transaction (a “ Sale Notice ”). The Sale Notice shall set forth in reasonable detail the material terms and conditions of the proposed Tag-Along Transaction and identify the contemplated transferee or Group.

(b) Avenue may, by written notice to the Apollo Holders (a “ Tag-Along Notice ”) delivered within ten (10) days after the delivery of the Sale Notice (Avenue delivering such timely notice being a “ Tag-Along Holder ”), elect to sell in such Tag-Along Transaction all or a portion of the shares of Class A Common Stock held by Avenue or shares of Class A Common Stock issuable upon conversion of the Convertible Notes held by Avenue on the same terms and conditions as the Apollo Holders, provided that, without the consent of the Apollo

 

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Holders, the Proportionate Percentage of shares of Common Stock to be sold by any Tag-Along Holder will not exceed the Proportionate Percentage of shares of Common Stock that the Apollo Holders propose to sell or transfer in the applicable Tag-Along Transaction; provided that, to the extent that any Tag-Along Holder needs to convert all or a portion of its Convertible Notes into shares of Class A Common Stock in order to participate in the applicable Tag-Along Transaction, the Apollo Holders shall structure the applicable Tag-Along Transaction to enable such conversion to occur on the closing date of such Tag-Along Transaction.

(c) If Avenue does not deliver a timely Tag-Along Notice, then the Apollo Holders may thereafter consummate the Tag-Along Transaction, at the same sale price and on the same other terms and conditions as are described in the Sale Notice (including, without limitation, the number of shares of Common Stock being sold), for a period of one hundred twenty (120) days thereafter (subject to extension in the event of required regulatory approvals not having been obtained by such date but in any event no later than two hundred seventy (270) days after delivery of the Tag-Along Notice). In the event the Apollo Holders have not consummated the Tag-Along Transaction within such one hundred twenty (120) day period (subject to extension as provided above), the Apollo Holders shall not thereafter consummate a Tag-Along Transaction, without first providing a Sale Notice and an opportunity to Avenue to sell in the manner provided above. If Avenue gives the Apollo Holders a timely Tag-Along Notice, then the Apollo Holders shall use reasonable efforts to cause the prospective transferee or Group to agree to acquire all the shares of Class A Common Stock identified in all timely Tag-Along Notices, upon the same terms and conditions as are applicable to the shares of Common Stock held by the Apollo Holders. If such prospective transferee or Group is unable or unwilling to acquire all the shares of Common Stock proposed to be included in the Tag-Along Transaction upon such terms, then the Apollo Holders may elect either to cancel such Tag-Along Transaction or to allocate the maximum number of shares that such prospective transferee or Group is willing to purchase among the Apollo Holders and the Tag-Along Holders in such proportions that the Apollo Holders’ and each such Tag-Along Holder’s Proportionate Percentages are reduced on a pro rata basis to reflect the total number of shares of Common Stock to be sold. In connection with the Tag-Along Transaction, each party shall bear its own expenses.

(d) For purposes of this Section 4, any holder of shares of Common Stock who has a contractual right (other than, for the avoidance of doubt, pursuant to this Agreement) to participate in such Tag-Along Transaction or any other holder of Common Stock who is otherwise participating in such Tag-Along Transaction with the consent of the Apollo Holders, shall be deemed to be a “Tag-Along Holder” under this Section 4 (provided that, for the avoidance of doubt, this Section 4(d) is not intended to nor shall it grant any rights to any Person to participate in any Tag-Along Transaction that is not otherwise granted pursuant to Section 4 (a)-(c) above).

Section 5. Notices . All notices, requests, consents and other communications hereunder shall be in writing and will be deemed to have been duly delivered: (i) upon personal delivery; (ii) three (3) days after being mailed by certified or registered mail, postage prepaid,

 

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return receipt requested; (iii) one (1) Business Day after being sent via a nationally recognized overnight courier service; or (iv) upon receipt of electronic or other confirmation of transmission if sent via facsimile or electronic mail to the appropriate party at the address, facsimile number or email specified on Annex I hereto, or at such other addresses, facsimile numbers or email addresses as the parties may designate by written notice in accordance with this Section 5.

Section 6. Amendment . This Agreement may be amended, modified, supplemented or waived from time to time by an instrument in writing signed by the Company, Realogy, Avenue and each Apollo Holder.

Section 7. Term; Termination . This Agreement shall only become effective on the Closing Date; provided that, this Agreement shall automatically terminate if the Exchange Offers contemplated herein are terminated and abandoned. Unless earlier terminated by the mutual agreement of all the parties hereto, this Agreement shall terminate automatically upon the earlier of (i) the dissolution, liquidation or winding-up of the Company (unless the Company continues to exist after such dissolution, liquidation or winding-up as a limited liability company or in another form, whether incorporated in Delaware or another jurisdiction), (ii) with respect to each Apollo Holder, the first date on which such Apollo Holder ceases to hold, directly or indirectly, any shares of Common Stock or Convertible Notes convertible into shares of Common Stock, and (iii) with respect to Avenue, the first date on which Avenue ceases to hold, directly or indirectly, Registrable Securities (assuming all of the then outstanding Convertible Notes held by Avenue have been converted into shares of Class A Common Stock) representing at least 30% of the Registrable Securities (assuming all of the Convertible Notes held by Avenue on the Closing Date were converted into shares of Class A Common Stock) Avenue acquired on the Closing Date or thereafter; provided that Avenue’s rights pursuant to Section 2 (solely with respect to Equity Preemptive Events) and Section 4 shall survive any termination of this Agreement until the earlier of (x) the first date on which Avenue ceases to own, directly or indirectly, Convertible Notes (or shares of Class A Common Stock issued upon conversion of such Convertible Notes or a combination thereof) representing at least $15 million aggregate principal amount of the Convertible Notes acquired by Avenue on the Closing Date and (y) the consummation of a Qualified Public Offering.

Section 8. Miscellaneous Provisions .

(a) THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE 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.

 

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(b) The Company may, without the consent of Avenue, permit any holder that acquires in the Exchange Offers Convertible Notes convertible into shares of Class A Common Stock representing 10% or more of the outstanding shares of Common Stock on an “as converted” basis to become a party to this Agreement and to give such holder the same rights as Avenue under this Agreement.

(c) Whenever the context requires, the gender of all words used herein shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural.

(d) Except as provided in Section 7, any party to this Agreement who disposes of all of his, her or its Common Stock and/or Convertible Notes in conformity with the terms of this Agreement shall cease to be a party to this Agreement and shall have no further rights hereunder other than rights to indemnification under Section 3.3, if applicable.

(e) Each party to this Agreement acknowledges that a remedy at law for any breach or attempted breach of this Agreement will be inadequate, agrees that each other party to this Agreement shall be entitled to specific performance and injunctive and other equitable relief in case of any such breach or attempted breach and further agrees to waive (to the extent legally permissible) any legal conditions required to be met for the obtaining of any such injunctive or other equitable relief (including posting any bond in order to obtain equitable relief).

(f) This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. Exchange and delivery of this Agreement by PDF via electronic mail or by exchange of facsimile copies bearing the facsimile signature of a party shall constitute a valid and binding execution and delivery of this Agreement by such party. Such PDF and facsimile copies shall constitute legally enforceable original documents.

(g) Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, and such invalid, illegal or otherwise unenforceable provisions shall be null and void as to such jurisdiction. It is the intent of the parties, however, that any invalid, illegal or otherwise unenforceable provisions be automatically replaced by other provisions which are as similar as possible in terms to such invalid, illegal or otherwise unenforceable provisions but are valid and enforceable to the fullest extent permitted by law.

 

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(h) Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and other documents as any other party hereto reasonably may request in order to carry out the provisions of this Agreement and the consummation of the transactions contemplated hereby, in each case, subject to the provisions hereunder, including, without limitation, those set forth in Section 2 and Section 4.

(i) The parties to this Agreement agree that jurisdiction and venue in any action brought by any party hereto pursuant to this Agreement shall exclusively and properly lie in the Delaware State Chancery Court located in Wilmington, Delaware, or (in the event that such court denies jurisdiction) any federal or state court located in the State of Delaware. By execution and delivery of this Agreement each party hereto irrevocably submits to the jurisdiction of such courts for itself and in respect of its property with respect to such action. The parties hereto irrevocably agree that venue for such action would be proper in such court, and hereby waive any objection that such court is an improper or inconvenient forum for the resolution of such action. The parties further agree that the mailing by certified or registered mail, return receipt requested to the address of such parties set forth on the signature pages hereto, of any process required by any such court shall constitute valid and lawful service of process against them, without necessity for service by any other means provided by statute or rule of court.

(j) No course of dealing between the Company, or its subsidiaries, and the other parties hereto (or any of them) or any delay in exercising any rights hereunder will operate as a waiver of any rights of any party to this Agreement. The failure of any party to enforce any of the provisions of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

(k) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHT OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS ENTERED INTO IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN.

(l) This Agreement sets forth the entire agreement of the parties hereto as to the subject matter hereof and supersedes all previous agreements among all or some of the parties hereto, whether written, oral or otherwise, as to such subject matter. Unless otherwise

 

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provided herein, any consent required by any party hereto may be withheld by such party in its sole discretion.

(m) Except as otherwise expressly provided herein, no Person not a party to this Agreement, as a third party beneficiary or otherwise, shall be entitled to enforce any rights or remedies under this Agreement.

(n) If, and as often as, there are any changes in the Common Stock and/or Convertible Notes, as applicable, by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions of this Agreement, as may be required, so that the rights, privileges, duties and obligations hereunder shall continue with respect to the Common Stock or Convertible Notes as so changed.

(o) Without limiting anything in the Charter or the Bylaws, no director of the Company shall be personally liable to the Company or any party hereto as a result of any acts or omissions taken under this Agreement in good faith.

(p) Notwithstanding anything to the contrary contained herein, (i) each Apollo Holder may assign its rights or obligations, in whole or in part, under this Agreement to any member of the Apollo Holders, and such Person shall automatically become party to this Agreement and this Agreement shall be amended and restated to provide that such Person or a designee of such Person shall have the same rights and obligations of the Apollo Holders and the Apollo Holders hereunder and (ii) Avenue may assign its rights under Section 3 to any third party transferee in connection with any transfer (other than pursuant to a public offering) of at least $10 million aggregate principal amount of its Subject Securities, provided that such third party transferee executes and delivers to the Company a joinder agreement in the form set forth in Exhibit A and becomes a party to this Agreement.

* * * * *

 

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This Agreement is executed by the parties hereto to be effective as of the Closing Date.

 

REALOGY CORPORATION
By:  

/s/ Anthony E. Hull

  Name:   Anthony E. Hull
  Title:   EVP, CFO & Treasurer
DOMUS HOLDINGS CORP.
By:  

/s/ Anthony E. Hull

  Name:   Anthony E. Hull
  Title:   EVP, CFO & Treasurer

[ Signature Page to Investor Securityholders Agreement-Avenue ]


DOMUS INVESTMENT HOLDINGS, LLC
By:  

Apollo Management VI, L.P.,

its manager

By:  

AIF VI Management, LLC,

its general partner

By:  

/s/ Laurie Medley

  Name:    Laurie Medley
  Title:   Vice President
RCIV HOLDINGS, L.P. (CAYMAN)
By:  

Apollo Advisors VI (EH), L.P.,

its general partner

By:  

Apollo Advisors VI (EH-GP), Ltd.,

its general partner

By:  

/s/ Laurie Medley

  Name:   Laurie Medley
  Title:   Vice President
APOLLO INVESTMENT FUND VI, L.P.
By:  

Apollo Advisors VI, L.P.,

its general partner

By:  

Apollo Capital Management VI, LLC,

its general partner

By:  

/s/ Laurie Medley

  Name:   Laurie Medley
  Title:   Vice President

[ Signature Page to Investor Securityholders Agreement-Avenue ]


DOMUS CO-INVESTMENT HOLDINGS, LLC
By:  

Apollo Management VI, L.P.,

its managing member

By:  

AIF VI Management, LLC,

its general partner

By:  

/s/ Laurie Medley

  Name:   Laurie Medley
  Title:   Vice President

[ Signature Page to Investor Securityholders Agreement-Avenue ]


RCIV HOLDINGS (LUXEMBOURG), S.A.R.L.
By:   /s/ Laurie Medley
Name:   Laurie Medley
Title:   Class A Manager

[ Signature Page to Investor Securityholders Agreement-Avenue ]


AVENUE CAPITAL MANAGEMENT II, L.P.
BY: AVENUE CAPITAL MANAGEMENT II GENPAR, L.P. (ON BEHALF OF FUNDS MANAGED BY IT)
By:  

/s/ Sonia Gardner

  Name:   Sonia Gardner
  Title:   Member

[ Signature Page to Investor Securityholders Agreement-Avenue ]


ANNEX I

ADDRESSES FOR NOTICE

DOMUS HOLDINGS CORP.

DOMUS INVESTMENT HOLDINGS, LLC

RCIV HOLDINGS, L.P. (CAYMAN)

RCIV HOLDINGS (LUXEMBOURG) S.A.R.L.

APOLLO INVESTMENT FUND VI, L.P.

DOMUS CO-INVESTMENT HOLDINGS LLC

c/o Apollo Management VI, L.P.

9 West 57 th Street, 43 rd Floor

New York, NY 10019

Attention: Marc Becker

Email: Becker@apollolp.com

Facsimile:

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Facsimile: (212) 735-2000

Attention:        Stacy J. Kanter, Esq.

                           Thomas W. Greenberg, Esq.

AVENUE CAPITAL MANAGEMENT II, L.P.

399 Park Avenue, 6th Floor

New York, New York 10022

Facsimile: (212) 850-7506

Attention:        Jane Castle

                          Eric Ross

with a copy (which shall not constitute notice) to:

Akin Gump Strauss Hauer & Feld LLP

1333 New Hampshire Avenue NW

Washington, DC 20036-1511

Facsimile: (202) 955-7697

Attention: Michael S. Mandel, Esq.


EXHIBIT A

JOINDER AGREEMENT

This Joinder Agreement (“ Joinder ”) is executed pursuant to the terms of the Amended and Restated Investor Securityholders Agreement dated as of January 5, 2011, a copy of which is attached hereto (the “ Investor Securityholders Agreement ”), by the transferee (“ Transferee ”) executing this Joinder. By the execution of this Joinder, the Transferee agrees as follows:

 

  1. Acknowledgement . Transferee acknowledges that Transferee is acquiring or receiving from Avenue $10 million or more in aggregate principal amount of certain Convertible Notes convertible at any time at the option of the holders thereof, in whole or in part, into shares of Class A Common Stock of Domus Holdings Corp. a Delaware corporation (the “ Company ”). Capitalized terms used herein without definition are defined in the Investor Securityholders Agreement and are used herein with the same meanings set forth therein.

 

  2. Agreement to be Bound . Transferee by delivering this Joinder agrees that it shall have only the registration rights referenced in Section 3 of the Securityholders Agreement and agrees to become a party to the Securityholders Agreement.

 

  3. Further Agreement . The Transferee further acknowledges and agrees that it shall not have any rights under the Securityholders Agreement other than piggy-back registration rights and certain indemnification rights.

 

  4. Effectiveness . This Joinder shall take effect and Transferee shall be bound by Section 3 of the Investor Securityholders Agreement immediately upon the execution hereof.

 

  5. Law . THIS ADOPTION WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS ADOPTION, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.


   
Name of Transferee
   
Signature
   
Date

 

Exhibit A-2

Exhibit 10.30

 

 

 

INVESTOR SECURITYHOLDERS AGREEMENT

by and among

DOMUS HOLDINGS CORP.,

REALOGY CORPORATION, and

the SECURITYHOLDERS that are parties hereto

DATED AS OF JANUARY 5, 2011

 

 

 


INVESTOR SECURITYHOLDERS AGREEMENT, dated as of January 5, 2011 (this “ Agreement ”), by and among Domus Holdings Corp., a Delaware corporation (the “ Company ”), Realogy Corporation, a Delaware corporation (“ Realogy ”), the Apollo Holders (as such term is hereinafter defined) and the eligible holders of Existing Notes (as such term is hereinafter defined) identified on the signature pages hereto (each a “ Holder ”).

WHEREAS, the Company owns, directly or indirectly, all of the outstanding equity interests of Realogy;

WHEREAS, Realogy has previously issued 10.50% Senior Notes due 2014, 11.00%/11.75% Senior Toggle Notes due 2014, and 12.375% Senior Subordinated Notes due 2015 (collectively, the “ Existing Notes ”);

WHEREAS, each Holder, collectively with its Affiliates or funds or accounts managed by such Holder, tendered all of their Existing Notes in the Exchange Offers, in the aggregate principal amount and series of Existing Notes set forth under such Holder’s name on the signature pages hereto, at or prior to the expiration of the Exchange Offers and elected to receive, with respect to an aggregate principal amount of greater than $40 million of such Existing Notes, 11.00% Series A Convertible Notes due 2018 (the “ Series A Convertible Notes ”), 11.00% Series B Convertible Notes due 2018 (the “ Series B Convertible Notes ”) and/or 11.00% Series C Convertible Notes due 2018 (the “ Series C Convertible Notes ” and, together with the Series A Convertible Notes and the Series B Convertible Notes, the “ Convertible Notes ”) issued by Realogy, as the case may be, convertible at any time at the option of the holders thereof, in whole or in part, into shares of Class A common stock of the Company, par value $0.01 per share;

WHEREAS, RCIV Holdings (Luxembourg) s.à.r.l., a Luxembourg société à responsabilité limitée (“ RCIV Luxco ”), a wholly owned subsidiary of RCIV Holdings, L.P, a Cayman Islands exempted limited partnership (“ RCIV Cayman ”), owns Existing Notes and will own Convertible Notes convertible into an equity interest in the Company upon consummation of the Exchange Offers;

WHEREAS, Apollo Investment Fund VI, LP, a Delaware limited partnership (“ AIF VI ”), Domus Investment Holdings, LLC, a Delaware limited liability company (“ Domus Investment ”) and Domus Co-Investment Holdings, LLC, a Delaware limited liability company (“ Co-Investment Holdings ”), each own capital stock of the Company; and

WHEREAS, each of the Company, the Apollo Holders and each Holder deems it to be in their respective best interests to enter into this Agreement to set forth their agreements with respect to certain matters concerning the Company.

NOW, THEREFORE, in consideration of the premises and of the mutual consents and obligations hereinafter set forth, intending to be legally bound, the parties hereto hereby agree as follows:

 

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Section 1. Definitions .

As used in this Agreement:

Accelerated Issuance ” has the meaning set forth in Section 3.

Affiliate ” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. 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.

Agreement ” has the meaning set forth in the preamble.

AIF VI ” has the meaning set forth in the preamble.

Apollo Holders ” means AIF VI, Domus Investment, RCIV Cayman, RCIV Luxco and Co-Investment Holdings, collectively with each of their respective Affiliates (including, for avoidance of doubt, any syndication vehicles).

Business Day ” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close.

Class A Common Stock ” means the Class A common stock of the Company, par value $.01 per share.

Class B Common Stock ” means the Class B common stock of the Company, par value $.01 per share.

Closing Date ” means the date of the closing of the Exchange Offers.

Co-Investment Holdings ” has the meaning set forth in the recitals.

Common Stock ” means the Class A Common Stock, and the Class B Common Stock, collectively, and any class of common stock into which the Class A Common Stock or Class B Common Stock may be reclassified, converted or exchanged.

Company ” has the meaning set forth in the preamble.

Company Offered Securities ” has the meaning set forth in Section 3.

Convertible Notes ” has the meaning set forth in the recitals.

Disposition ” means any direct or indirect transfer, assignment, sale, gift, pledge, hypothecation or other encumbrance, or any other disposition, of Subject Securities (or any interest therein or right thereto) or of all or part of the voting power (other than the granting of a revocable proxy) associated with the Subject Securities (or any interest therein) whatsoever, or

 

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any other transfer of beneficial ownership of Subject Securities whether voluntary or involuntary, including, without limitation (a) as a part of any liquidation of a securityholder’s assets or (b) as a part of any reorganization of a securityholder pursuant to the United States, state, foreign or other bankruptcy law or other similar debtor relief laws. “ Dispose ” shall have a correlative meaning.

Domus Investment ” has the meaning set forth in the recitals.

Exchange Offers ” means the offers by Realogy to exchange the Existing Notes for Convertible Notes and/or newly issued 11.50% Senior Cash Notes due 2017, 12.00% Senior Cash Notes due 2017, and 13.375% Senior Subordinated Notes due 2018 (such 11.50% Senior Cash Notes due 2017, 12.00% Senior Cash Notes due 2017, and 13.375% Senior Subordinated Notes due 2018, collectively, the “ Extended Maturity Notes ”).

Existing Notes ” has the meaning set forth in the recitals.

Extended Maturity Notes ” has the meaning set forth in the definition of Exchange Offers.

Group ” has the meaning ascribed to such term in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

Holder ” has the meaning set forth in the preamble.

IAI ” means an institutional “accredited investor” within the meaning of Rule 501 (a)(1), (2), (3) or (7) of Regulation D under the Securities Act.

IPO ” means the initial public offering of shares of the Class A Common Stock pursuant to an effective Registration Statement under the Securities Act.

Person ” shall be construed broadly and shall include, without limitation, an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity or any department, agency or political subdivision thereof or any other entity.

Preemptive Event ” has the meaning set forth in Section 3.

Preemptive Rights Offer ” has the meaning set forth in Section 3.

Preemptive Rights Offer Notice ” has the meaning set forth in Section 3.

Proportionate Percentage ” with respect to any holder of Convertible Notes (or shares of Class A Common Stock issued upon conversion of such Convertible Notes or a combination thereof), shall mean a number (expressed as a percentage) equal to a fraction, the numerator of which is the total number of shares of Common Stock on an as-converted basis proposed to be transferred by such holder in a proposed Tag-Along Transaction and the denominator of which is the total number of shares of Common Stock on an as-converted basis owned by such holder.

 

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Public Sale ” means any sale, occurring simultaneously with or after an IPO, of Common Stock to the public pursuant to an offering registered under the Securities Act or to the public in the manner described by the provisions of Rule 144 promulgated thereunder, other than an offering relating to employee incentive plans.

QIB ” means a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act).

Qualified Public Offering ” means (a) an Underwritten Offering of shares of Class A Common Stock by the Company or any selling securityholders pursuant to an effective Registration Statement filed by the Company with the SEC (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 Class A 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 $200 million and (b) the listing of Company Class A Common Stock on the NASDAQ Global Select Market, the NASDAQ Global Market, the New York Stock Exchange or any successor exchange to the foregoing.

RCIV Cayman ” has the meaning set forth in the recitals.

RCIV Luxco ” has the meaning set forth in the recitals.

Realogy ” has the meaning set forth in the preamble.

Registration Statement ” means any shelf registration statement or other registration statement filed with the SEC with respect to the Class A Common Stock.

Sale Notice ” has the meaning set forth in Section 4.

SEC ” means the Securities and Exchange Commission.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Series A Convertible Notes ” has the meaning set forth in the recitals.

Series B Convertible Notes ” has the meaning set forth in the recitals.

Series C Convertible Notes ” has the meaning set forth in the recitals.

Subject Securities ” means shares of Class A Common Stock, the Convertible Notes and any shares of Class A Common Stock issuable upon conversion thereof.

Tag-Along Holder ” has the meaning set forth in Section 4(b).

 

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Tag-Along Notice ” has the meaning set forth in Section 4(b).

Tag-Along Transaction ” has the meaning set forth in Section 4(a).

Underwritten Offering ” means a sale of shares of Class A Common Stock to an underwriter for reoffering to the public.

Section 2. Representation and Warranties . The Holder hereby represents and warrants that the Holder and its Affiliates or funds or accounts managed by such Holder, have collectively tendered all of their Existing Notes in the Exchange Offers at or prior to the expiration of the Exchange Offers and elected to receive Convertible Notes in respect of Existing Notes with an aggregate principal amount of greater than $40 million.

Section 3. Preemptive Events . If any time prior to (but not including) a Qualified Public Offering, the Company or Realogy proposes to issue or sell any equity securities (or securities convertible into, issuable upon exercise of or exchangeable for any such equity securities), but not including (i) securities issued pursuant to any equity compensation plans, (ii) securities issued as a dividend or distribution on all shares of Common Stock or upon any stock split, recapitalization or other subdivision or combination of securities, (iii) securities issued upon the exercise, conversion or exchange of any options, warrants or convertible securities issued prior to the date hereof or for which the Holder has had the opportunity to subscribe for pursuant to its preemptive rights (and which shall include the Convertible Notes), and (iv) securities issued (other than to an Apollo Holder) (X) as consideration in an acquisition (whether by stock sale, merger, recapitalization, asset purchase or otherwise) or (Y) in connection with a joint venture or strategic alliance (collectively, “ Company Offered Securities ”), the Company shall give notice in writing (the “ Preemptive Rights Offer Notice ”) to each Holder of such proposed issuance or sale of such equity securities (a “ Preemptive Event ”). The Preemptive Rights Offer Notice shall describe the terms of the proposed transaction, identify the proposed purchaser(s), and contain an offer (the “ Preemptive Rights Offer ”) to sell Company Offered Securities to such Holder, at the same price, on the same terms and for the same consideration to be paid by the proposed purchaser(s) as set forth in this Section 3. Each Holder shall have the right to participate in the Preemptive Event up to its respective pro rata fully-diluted portion of its equity ownership (which shall be a fraction of the Company Offered Securities determined by dividing (A) the number of shares of Common Stock then owned by such Holder on a fully-diluted basis assuming the conversion of all of its Convertible Notes by (B) the number of shares of Common Stock then outstanding (before giving effect to the Preemptive Event) on a fully-diluted basis assuming, among other things, the conversion of all Convertible Notes then outstanding. The Preemptive Rights Offer Notice shall be delivered at least fifteen (15) days prior to the relevant issuance or sale. If any Holder fails to accept in writing the Preemptive Rights Offer by the tenth (10th) day after the Company’s delivery of the Preemptive Rights Offer Notice, such Holder shall have no further rights with respect to the Preemptive Event; provided, however, that if (i) any of the terms of the Preemptive Event, taken as a whole, materially change after the date of the Preemptive Rights Offer Notice or (ii) the issuance or sale of the Company Offered Securities pursuant to the Preemptive Event shall not have occurred within one hundred twenty (120) days after the delivery of the Preemptive Rights Offer Notice (subject to extension

 

6


in the event of required regulatory approvals not having been obtained by such date but in any event no later than one hundred eighty (180) days after delivery of the Preemptive Rights Offer Notice), then, in each case, any additional issuances shall again be subject to this Section 3 and the Company shall be required to give a new Preemptive Rights Offer Notice within the time period described above and such Holder shall have an additional ten (10) days to accept in writing the Preemptive Rights Offer. Notwithstanding any of the foregoing, following any Preemptive Rights Offer Notice, the Company may immediately issue, prior to the expiration of the time periods above, the Company Offered Securities whenever it determines that it would be to the advantage of the Company for it to issue such Company Offered Securities (an “Accelerated Issuance”). To the extent that the Company effects an Accelerated Issuance and the Holder accepts in writing the Preemptive Rights Offer, the Company will issue to such Holder additional Company Offered Securities at the same price, on the same terms and for the same consideration paid by the purchaser(s) in the Accelerated Issuance, such that the percentage of the Company Offered Securities issued to the Holder would equal the percentage of the Company Offered Securities the Holder would have otherwise received in the absence of an Accelerated Issuance in accordance with this Section 3.

Section 4. Tag-Along Rights .

(a) Prior to the consummation of a Qualified Public Offering, if the Apollo Holders desire to effect any sale or transfer of shares of Common Stock representing 5% or more of the outstanding shares of Common Stock on a fully diluted basis in a single transaction or series of related transactions for value to any third party that is not an Affiliate of the Apollo Holders, other than in a Public Sale (a “ Tag-Along Transaction ”), it shall give written notice to each Holder offering such Holder the option to participate in such Tag-Along Transaction (a “ Sale Notice ”). The Sale Notice shall set forth in reasonable detail the material terms and conditions of the proposed Tag-Along Transaction and identify the contemplated transferee or Group.

(b) Each Holder may, by written notice to the Apollo Holders (a “ Tag-Along Notice ”) delivered within ten (10) days after the delivery of the Sale Notice (such Holder delivering such timely notice being a “ Tag-Along Holder ”), elect to sell in such Tag-Along Transaction all or a portion of the shares of Class A Common Stock held by such Holder or shares of Class A Common Stock issuable upon conversion of the Convertible Notes held by such Holder on the same terms and conditions as the Apollo Holders, provided that, without the consent of the Apollo Holders, the Proportionate Percentage of shares of Common Stock to be sold by any Tag-Along Holder will not exceed the Proportionate Percentage of shares of Common Stock that the Apollo Holders propose to sell or transfer in the applicable Tag-Along Transaction; provided that, to the extent that any Tag-Along Holder needs to convert all or a portion of its Convertible Notes into shares of Class A Common Stock in order to participate in the applicable Tag-Along Transaction, the Apollo Holders shall structure the applicable Tag-Along Transaction to enable such conversion to occur on the closing date of such Tag-Along Transaction.

 

7


(c) If the Holder does not deliver a timely Tag-Along Notice, then the Apollo Holders may thereafter consummate the Tag-Along Transaction, at the same sale price and on the same other terms and conditions as are described in the Sale Notice (including, without limitation, the number of shares of Common Stock being sold), for a period of one hundred twenty (120) days thereafter (subject to extension in the event of required regulatory approvals not having been obtained by such date but in any event no later than two hundred seventy (270) days after delivery of the Tag-Along Notice). In the event the Apollo Holders have not consummated the Tag-Along Transaction within such one hundred twenty (120) day period (subject to extension as provided above), the Apollo Holders shall not thereafter consummate a Tag-Along Transaction, without first providing a Sale Notice and an opportunity to each Holder to sell in the manner provided above. If the Holder gives the Apollo Holders a timely Tag-Along Notice, then the Apollo Holders shall use reasonable efforts to cause the prospective transferee or Group to agree to acquire all the shares of Class A Common Stock identified in all timely Tag-Along Notices, upon the same terms and conditions as are applicable to the shares of Common Stock held by the Apollo Holders. If such prospective transferee or Group is unable or unwilling to acquire all the shares of Common Stock proposed to be included in the Tag-Along Transaction upon such terms, then the Apollo Holders may elect either to cancel such Tag-Along Transaction or to allocate the maximum number of shares that such prospective transferee or Group is willing to purchase among the Apollo Holders and the Tag-Along Holders in such proportions that the Apollo Holders’ and each such Tag-Along Holder’s Proportionate Percentages are reduced on a pro rata basis to reflect the total number of shares of Common Stock to be sold. In connection with the Tag-Along Transaction, each party shall bear its own expenses.

(d) For purposes of this Section 4, any holder of shares of Common Stock who has a contractual right (other than, for the avoidance of doubt, pursuant to this Agreement) to participate in such Tag-Along Transaction or any other holder of Common Stock who is otherwise participating in such Tag-Along Transaction with the consent of the Apollo Holders, shall be deemed to be a “Tag-Along Holder” under this Section 4 (provided that, for the avoidance of doubt, this Section 4(d) is not intended to nor shall it grant any rights to any Person to participate in any Tag-Along Transaction that is not otherwise granted pursuant to Section 4 (a)-(c) above).

Section 5. Notices . All notices, requests, consents and other communications hereunder shall be in writing and will be deemed to have been duly delivered: (i) upon personal delivery; (ii) three (3) days after being mailed by certified or registered mail, postage prepaid, return receipt requested; (iii) one (1) Business Day after being sent via a nationally recognized overnight courier service; or (iv) upon receipt of electronic or other confirmation of transmission if sent via facsimile or electronic mail to the appropriate party at the address, facsimile number or email specified on the signature pages hereto, or at such other addresses, facsimile numbers or email addresses as the parties may designate by written notice in accordance with this Section 5.

Section 6. Amendment . This Agreement may be amended, modified, supplemented or waived from time to time by an instrument in writing signed by the Company, Realogy and each

 

8


Apollo Holder; provided, however that this Agreement may not be modified in a manner that is materially adverse to any Holder without the approval of such Holder.

Section 7. Term; Termination . Unless earlier terminated by the mutual agreement of all the parties hereto, this Agreement shall terminate automatically upon the earlier of (i) the dissolution, liquidation or winding-up of the Company (unless the Company continues to exist after such dissolution, liquidation or winding-up as a limited liability company or in another form, whether incorporated in Delaware or another jurisdiction), (ii) upon consummation of a Qualified Public Offering, (iii) with respect to each Holder, the first date on which such Holder, collectively with its Affiliates or funds or accounts managed by such Holder, ceases to own, directly or indirectly, Convertible Notes (or shares of Class A Common Stock issued upon conversion of such Convertible Notes or a combination thereof) representing at least $15 million aggregate principal amount of the Convertible Notes acquired by such Holder, collectively with its Affiliates or funds or accounts managed by such Holder, on the Closing Date, and (iv) with respect to each Apollo Holder, the first date on which such Apollo Holder ceases to own, directly or indirectly, any shares of Common Stock or Convertible Notes convertible into shares of Common Stock.

Section 8. Miscellaneous Provisions .

(a) THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE 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.

(b) Whenever the context requires, the gender of all words used herein shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural.

(c) Except as provided in Section 7, any party to this Agreement who Disposes of all of his, her or its Common Stock and/or Convertible Notes in conformity with the terms of this Agreement shall cease to be a party to this Agreement and shall have no further rights hereunder.

(d) Each party to this Agreement acknowledges that a remedy at law for any breach or attempted breach of this Agreement will be inadequate, agrees that each other party to this Agreement shall be entitled to specific performance and injunctive and other equitable relief

 

9


in case of any such breach or attempted breach and further agrees to waive (to the extent legally permissible) any legal conditions required to be met for the obtaining of any such injunctive or other equitable relief (including posting any bond in order to obtain equitable relief).

(e) This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. Exchange and delivery of this Agreement by PDF via electronic mail or by exchange of facsimile copies bearing the facsimile signature of a party shall constitute a valid and binding execution and delivery of this Agreement by such party. Such PDF and facsimile copies shall constitute legally enforceable original documents.

(f) Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, and such invalid, illegal or otherwise unenforceable provisions shall be null and void as to such jurisdiction. It is the intent of the parties, however, that any invalid, illegal or otherwise unenforceable provisions be automatically replaced by other provisions which are as similar as possible in terms to such invalid, illegal or otherwise unenforceable provisions but are valid and enforceable to the fullest extent permitted by law.

(g) Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and other documents as any other party hereto reasonably may request in order to carry out the provisions of this Agreement and the consummation of the transactions contemplated hereby, in each case, subject to the provisions hereunder, including, without limitation, those set forth in Section 3 and Section 4.

(h) The parties to this Agreement agree that jurisdiction and venue in any action brought by any party hereto pursuant to this Agreement shall exclusively and properly lie in the Delaware State Chancery Court located in Wilmington, Delaware, or (in the event that such court denies jurisdiction) any federal or state court located in the State of Delaware. By execution and delivery of this Agreement each party hereto irrevocably submits to the jurisdiction of such courts for itself and in respect of its property with respect to such action. The parties hereto irrevocably agree that venue for such action would be proper in such court, and hereby waive any objection that such court is an improper or inconvenient forum for the resolution of such action. The parties further agree that the mailing by certified or registered mail, return receipt requested to the address of such parties set forth on the signature pages hereto, of any process required by any such court shall constitute valid and lawful service of process against them, without necessity for service by any other means provided by statute or rule of court.

 

10


(i) No course of dealing between the Company, or its subsidiaries, and the other parties hereto (or any of them) or any delay in exercising any rights hereunder will operate as a waiver of any rights of any party to this Agreement. The failure of any party to enforce any of the provisions of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

(j) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHT OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS ENTERED INTO IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN.

(k) This Agreement sets forth the entire agreement of the parties hereto as to the subject matter hereof and supersedes all previous agreements among all or some of the parties hereto, whether written, oral or otherwise, as to such subject matter. Unless otherwise provided herein, any consent required by any party hereto may be withheld by such party in its sole discretion.

(l) Except as otherwise expressly provided herein, no Person not a party to this Agreement, as a third party beneficiary or otherwise, shall be entitled to enforce any rights or remedies under this Agreement.

(m) If, and as often as, there are any changes in the Common Stock and/or Convertible Notes, as applicable, by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions of this Agreement, as may be required, so that the rights, privileges, duties and obligations hereunder shall continue with respect to the Common Stock or Convertible Notes as so changed.

(n) Without limiting anything in the Company’s certificate of incorporation or the bylaws, no director of the Company shall be personally liable to the Company or any party hereto as a result of any acts or omissions taken under this Agreement in good faith.

 

11


(o) Neither this Agreement nor any of the rights or obligations hereunder may be assigned by any Holder, directly or indirectly, in whole or in part, by operation of law or otherwise, provided that a Holder may assign its rights hereunder to an Affiliate of such Holder if such Holder delivers to the Company a (i) joinder agreement executed by such Affiliate in the form set forth in Exhibit A, (ii) documentation reasonably acceptable to Realogy certifying such Affiliate’s status as a QIB or an IAI and/or (iii) such other documentation as may be reasonably requested by Realogy. Any assignment in violation of the preceding sentence shall be null and void Each Apollo Holder may assign its rights or obligations, in whole or in part, under this Agreement to any member of the Apollo Holders, and such Person shall automatically become party to this Agreement and this Agreement shall be amended and restated to provide that such Person or a designee of such Person shall have the same rights and obligations of the Apollo Holders hereunder.

* * * * *

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date as of the date first above written.

 

REALOGY CORPORATION
By:  

/s/ Anthony E. Hull

  Name:    Anthony E. Hull
  Title:   EVP, CFO & Treasurer
DOMUS HOLDINGS CORP.
By:  

/s/ Anthony E. Hull

  Name:   Anthony E. Hull
  Title:   EVP, CFO & Treasurer

Address for notices to Realogy and to the Company:

One Campus Drive

Parsippany, NJ 07054

Phone: (973) 407-4669

Attention: Marilyn J. Wasser, Esq.

Facsimile: 973-407-6685

Electronic mail: marilyn.wasser@realogy.com

[ Signature Page of New Securityholders Agreement-WAMCO ]


DOMUS INVESTMENT HOLDINGS, LLC
By:  

Apollo Management VI, L.P.,

its manager

By:  

AIF VI Management, LLC,

its general partner

By:  

/s/ Laurie Medley

  Name:    Laurie Medley
  Title:   Vice President
RCIV HOLDINGS, L.P. (CAYMAN)
By:  

Apollo Advisors VI (EH), L.P.,

its general partner

By:  

Apollo Advisors VI (EH-GP), Ltd.,

its general partner

By:  

/s/ Laurie Medley

  Name:   Laurie Medley
  Title:   Vice President
APOLLO INVESTMENT FUND VI, L.P.
By:  

Apollo Advisors VI, L.P.,

its general partner

By:  

Apollo Capital Management VI, LLC,

its general partner

By:  

/s/ Laurie Medley

  Name:   Laurie Medley
  Title:   Vice President

[ Signature Page of New Securityholders Agreement-WAMCO ]


DOMUS CO-INVESTMENT HOLDINGS, LLC
By:  

Apollo Management VI, L.P.,

its managing member

By:  

AIF VI Management, LLC,

its general partner

By:  

/s/ Laurie Medley

  Name:   Laurie Medley
  Title:   Vice President

[ Signature Page of New Securityholders Agreement-WAMCO ]


RCIV HOLDINGS (LUXEMBOURG), S.A.R.L.
By:  

/s/ Laurie Medley

  Name:   Laurie Medley
  Title:   Class A Manager

Address for notices to the Apollo Holders:

c/o Apollo Management VI, L.P.

9 West 57 th Street, 43 rd Floor

New York, NY 10019

Facsimile:

Attention: Marc Becker

Email: Becker@apollolp.com

[ Signature Page of New Securityholders Agreement-WAMCO ]


Western Asset Management Company, as investment manager on behalf of its client accounts
By:  

/s/ W. Stephen Venable, Jr.

  Name:   W. Stephen Venable, Jr.
  Title:   Attorney

Address for notices to Western Asset

Management Company:

385 E. Colorado Blvd.

Pasadena CA 91101

Attn: Legal Department

 

Series

   Principal
amount of
Existing
Notes owned
as of the date
hereof
     Percentage
tendered
for
Convertible
Notes
    Percentage
tendered
for
Extended
Maturity
Notes
 

Existing Senior Cash Notes

     63,188,000         100     0   

Existing Senior Toggle Notes

       

Existing Senior Subordinated Notes

       

[ Signature Page of New Securityholders Agreement-WAMCO ]


EXHIBIT A

JOINDER AGREEMENT

This Joinder Agreement (“ Joinder ”) is executed pursuant to the terms of the Investor Securityholders Agreement dated as of January 5, 2011, a copy of which is attached hereto (the “ Investor Securityholders Agreement ”), by the transferee (“ Transferee ”) executing this Joinder. By the execution of this Joinder, the Transferee agrees as follows:

 

  1. Acknowledgement . Transferee acknowledges that Transferee is an Affiliate of the transferor of the rights and obligations under the Investor Securityholders Agreement (the “ Transferor ”). Capitalized terms used herein without definition are defined in the Investor Securityholders Agreement and are used herein with the same meanings set forth therein.

 

  2. Representations and Warranties . Transferee by delivering this Joinder represents and warrants that the Transferee and, to the knowledge of the Transferee, the Transferor, have complied with the terms and conditions relating to the assignment of rights and obligations in Section 8(o) of the Investor Securityholders Agreement.

 

  3. Effectiveness . This Joinder shall take effect and Transferee shall be bound by the Investor Securityholders Agreement immediately upon the execution hereof.

 

  4. Law . THIS JOINDER WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS ADOPTION, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.


   
Name of Transferee
   
Signature
   
Date

Exhibit 10.31

 

 

 

INVESTOR SECURITYHOLDERS AGREEMENT

by and among

DOMUS HOLDINGS CORP.,

REALOGY CORPORATION, and

the SECURITYHOLDERS that are parties hereto

DATED AS OF JANUARY 5, 2011

 

 

 


INVESTOR SECURITYHOLDERS AGREEMENT, dated as of January 5, 2011 (this “ Agreement ”), by and among Domus Holdings Corp., a Delaware corporation (the “ Company ”), Realogy Corporation, a Delaware corporation (“ Realogy ”), the Apollo Holders (as such term is hereinafter defined) and the eligible holders of Existing Notes (as such term is hereinafter defined) identified on the signature pages hereto (each a “ Holder ”).

WHEREAS, the Company owns, directly or indirectly, all of the outstanding equity interests of Realogy;

WHEREAS, Realogy has previously issued 10.50% Senior Notes due 2014, 11.00%/11.75% Senior Toggle Notes due 2014, and 12.375% Senior Subordinated Notes due 2015 (collectively, the “ Existing Notes ”);

WHEREAS, each Holder, collectively with its Affiliates or funds or accounts managed by such Holder, tendered all of their Existing Notes in the Exchange Offers, in the aggregate principal amount and series of Existing Notes set forth under such Holder’s name on the signature pages hereto, at or prior to the expiration of the Exchange Offers and elected to receive, with respect to an aggregate principal amount of greater than $40 million of such Existing Notes, 11.00% Series A Convertible Notes due 2018 (the “ Series A Convertible Notes ”), 11.00% Series B Convertible Notes due 2018 (the “ Series B Convertible Notes ”) and/or 11.00% Series C Convertible Notes due 2018 (the “ Series C Convertible Notes ” and, together with the Series A Convertible Notes and the Series B Convertible Notes, the “ Convertible Notes ”) issued by Realogy, as the case may be, convertible at any time at the option of the holders thereof, in whole or in part, into shares of Class A common stock of the Company, par value $0.01 per share;

WHEREAS, RCIV Holdings (Luxembourg) s.à.r.l., a Luxembourg société à responsabilité limitée (“ RCIV Luxco ”), a wholly owned subsidiary of RCIV Holdings, L.P, a Cayman Islands exempted limited partnership (“ RCIV Cayman ”), owns Existing Notes and will own Convertible Notes convertible into an equity interest in the Company upon consummation of the Exchange Offers;

WHEREAS, Apollo Investment Fund VI, LP, a Delaware limited partnership (“ AIF VI ”), Domus Investment Holdings, LLC, a Delaware limited liability company (“ Domus Investment ”) and Domus Co-Investment Holdings, LLC, a Delaware limited liability company (“ Co-Investment Holdings ”), each own capital stock of the Company; and

WHEREAS, each of the Company, the Apollo Holders and each Holder deems it to be in their respective best interests to enter into this Agreement to set forth their agreements with respect to certain matters concerning the Company.

NOW, THEREFORE, in consideration of the premises and of the mutual consents and obligations hereinafter set forth, intending to be legally bound, the parties hereto hereby agree as follows:

 

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Section 1. Definitions .

As used in this Agreement:

Accelerated Issuance ” has the meaning set forth in Section 3.

Affiliate ” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. 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.

Agreement ” has the meaning set forth in the preamble.

AIF VI ” has the meaning set forth in the preamble.

Apollo Holders ” means AIF VI, Domus Investment, RCIV Cayman, RCIV Luxco and Co-Investment Holdings, collectively with each of their respective Affiliates (including, for avoidance of doubt, any syndication vehicles).

Business Day ” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close.

Class A Common Stock ” means the Class A common stock of the Company, par value $.01 per share.

Class B Common Stock ” means the Class B common stock of the Company, par value $.01 per share.

Closing Date ” means the date of the closing of the Exchange Offers.

Co-Investment Holdings ” has the meaning set forth in the recitals.

Common Stock ” means the Class A Common Stock, and the Class B Common Stock, collectively, and any class of common stock into which the Class A Common Stock or Class B Common Stock may be reclassified, converted or exchanged.

Company ” has the meaning set forth in the preamble.

Company Offered Securities ” has the meaning set forth in Section 3.

Convertible Notes ” has the meaning set forth in the recitals.

Disposition ” means any direct or indirect transfer, assignment, sale, gift, pledge, hypothecation or other encumbrance, or any other disposition, of Subject Securities (or any interest therein or right thereto) or of all or part of the voting power (other than the granting of a revocable proxy) associated with the Subject Securities (or any interest therein) whatsoever, or

 

3


any other transfer of beneficial ownership of Subject Securities whether voluntary or involuntary, including, without limitation (a) as a part of any liquidation of a securityholder’s assets or (b) as a part of any reorganization of a securityholder pursuant to the United States, state, foreign or other bankruptcy law or other similar debtor relief laws. “ Dispose ” shall have a correlative meaning.

Domus Investment ” has the meaning set forth in the recitals.

Exchange Offers ” means the offers by Realogy to exchange the Existing Notes for Convertible Notes and/or newly issued 11.50% Senior Cash Notes due 2017, 12.00% Senior Cash Notes due 2017, and 13.375% Senior Subordinated Notes due 2018 (such 11.50% Senior Cash Notes due 2017, 12.00% Senior Cash Notes due 2017, and 13.375% Senior Subordinated Notes due 2018, collectively, the “ Extended Maturity Notes ”).

Existing Notes ” has the meaning set forth in the recitals.

Extended Maturity Notes ” has the meaning set forth in the definition of Exchange Offers.

Group ” has the meaning ascribed to such term in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

Holder ” has the meaning set forth in the preamble.

IAI ” means an institutional “accredited investor” within the meaning of Rule 501 (a)(1), (2), (3) or (7) of Regulation D under the Securities Act.

IPO ” means the initial public offering of shares of the Class A Common Stock pursuant to an effective Registration Statement under the Securities Act.

Person ” shall be construed broadly and shall include, without limitation, an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity or any department, agency or political subdivision thereof or any other entity.

Preemptive Event ” has the meaning set forth in Section 3.

Preemptive Rights Offer ” has the meaning set forth in Section 3.

Preemptive Rights Offer Notice ” has the meaning set forth in Section 3.

Proportionate Percentage ” with respect to any holder of Convertible Notes (or shares of Class A Common Stock issued upon conversion of such Convertible Notes or a combination thereof), shall mean a number (expressed as a percentage) equal to a fraction, the numerator of which is the total number of shares of Common Stock on an as-converted basis proposed to be transferred by such holder in a proposed Tag-Along Transaction and the denominator of which is the total number of shares of Common Stock on an as-converted basis owned by such holder.

 

4


Public Sale ” means any sale, occurring simultaneously with or after an IPO, of Common Stock to the public pursuant to an offering registered under the Securities Act or to the public in the manner described by the provisions of Rule 144 promulgated thereunder, other than an offering relating to employee incentive plans.

QIB ” means a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act).

Qualified Public Offering ” means (a) an Underwritten Offering of shares of Class A Common Stock by the Company or any selling securityholders pursuant to an effective Registration Statement filed by the Company with the SEC (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 Class A 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 $200 million and (b) the listing of Company Class A Common Stock on the NASDAQ Global Select Market, the NASDAQ Global Market, the New York Stock Exchange or any successor exchange to the foregoing.

RCIV Cayman ” has the meaning set forth in the recitals.

RCIV Luxco ” has the meaning set forth in the recitals.

Realogy ” has the meaning set forth in the preamble.

Registration Statement ” means any shelf registration statement or other registration statement filed with the SEC with respect to the Class A Common Stock.

Sale Notice ” has the meaning set forth in Section 4.

SEC ” means the Securities and Exchange Commission.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Series A Convertible Notes ” has the meaning set forth in the recitals.

Series B Convertible Notes ” has the meaning set forth in the recitals.

Series C Convertible Notes ” has the meaning set forth in the recitals.

Subject Securities ” means shares of Class A Common Stock, the Convertible Notes and any shares of Class A Common Stock issuable upon conversion thereof.

Tag-Along Holder ” has the meaning set forth in Section 4(b).

 

5


Tag-Along Notice ” has the meaning set forth in Section 4(b).

Tag-Along Transaction ” has the meaning set forth in Section 4(a).

Underwritten Offering ” means a sale of shares of Class A Common Stock to an underwriter for reoffering to the public.

Section 2. Representation and Warranties . The Holder hereby represents and warrants that the Holder and its Affiliates or funds or accounts managed by such Holder, have collectively tendered all of their Existing Notes in the Exchange Offers at or prior to the expiration of the Exchange Offers and elected to receive Convertible Notes in respect of Existing Notes with an aggregate principal amount of greater than $40 million.

Section 3. Preemptive Events . If any time prior to (but not including) a Qualified Public Offering, the Company or Realogy proposes to issue or sell any equity securities (or securities convertible into, issuable upon exercise of or exchangeable for any such equity securities), but not including (i) securities issued pursuant to any equity compensation plans, (ii) securities issued as a dividend or distribution on all shares of Common Stock or upon any stock split, recapitalization or other subdivision or combination of securities, (iii) securities issued upon the exercise, conversion or exchange of any options, warrants or convertible securities issued prior to the date hereof or for which the Holder has had the opportunity to subscribe for pursuant to its preemptive rights (and which shall include the Convertible Notes), and (iv) securities issued (other than to an Apollo Holder) (X) as consideration in an acquisition (whether by stock sale, merger, recapitalization, asset purchase or otherwise) or (Y) in connection with a joint venture or strategic alliance (collectively, “ Company Offered Securities ”), the Company shall give notice in writing (the “ Preemptive Rights Offer Notice ”) to each Holder of such proposed issuance or sale of such equity securities (a “ Preemptive Event ”). The Preemptive Rights Offer Notice shall describe the terms of the proposed transaction, identify the proposed purchaser(s), and contain an offer (the “ Preemptive Rights Offer ”) to sell Company Offered Securities to such Holder, at the same price, on the same terms and for the same consideration to be paid by the proposed purchaser(s) as set forth in this Section 3. Each Holder shall have the right to participate in the Preemptive Event up to its respective pro rata fully-diluted portion of its equity ownership (which shall be a fraction of the Company Offered Securities determined by dividing (A) the number of shares of Common Stock then owned by such Holder on a fully-diluted basis assuming the conversion of all of its Convertible Notes by (B) the number of shares of Common Stock then outstanding (before giving effect to the Preemptive Event) on a fully-diluted basis assuming, among other things, the conversion of all Convertible Notes then outstanding. The Preemptive Rights Offer Notice shall be delivered at least fifteen (15) days prior to the relevant issuance or sale. If any Holder fails to accept in writing the Preemptive Rights Offer by the tenth (10th) day after the Company’s delivery of the Preemptive Rights Offer Notice, such Holder shall have no further rights with respect to the Preemptive Event; provided, however, that if (i) any of the terms of the Preemptive Event, taken as a whole, materially change after the date of the Preemptive Rights Offer Notice or (ii) the issuance or sale of the Company Offered Securities pursuant to the Preemptive Event shall not have occurred within one hundred twenty (120) days after the delivery of the Preemptive Rights Offer Notice (subject to extension

 

6


in the event of required regulatory approvals not having been obtained by such date but in any event no later than one hundred eighty (180) days after delivery of the Preemptive Rights Offer Notice), then, in each case, any additional issuances shall again be subject to this Section 3 and the Company shall be required to give a new Preemptive Rights Offer Notice within the time period described above and such Holder shall have an additional ten (10) days to accept in writing the Preemptive Rights Offer. Notwithstanding any of the foregoing, following any Preemptive Rights Offer Notice, the Company may immediately issue, prior to the expiration of the time periods above, the Company Offered Securities whenever it determines that it would be to the advantage of the Company for it to issue such Company Offered Securities (an “Accelerated Issuance”). To the extent that the Company effects an Accelerated Issuance and the Holder accepts in writing the Preemptive Rights Offer, the Company will issue to such Holder additional Company Offered Securities at the same price, on the same terms and for the same consideration paid by the purchaser(s) in the Accelerated Issuance, such that the percentage of the Company Offered Securities issued to the Holder would equal the percentage of the Company Offered Securities the Holder would have otherwise received in the absence of an Accelerated Issuance in accordance with this Section 3.

Section 4. Tag-Along Rights .

(a) Prior to the consummation of a Qualified Public Offering, if the Apollo Holders desire to effect any sale or transfer of shares of Common Stock representing 5% or more of the outstanding shares of Common Stock on a fully diluted basis in a single transaction or series of related transactions for value to any third party that is not an Affiliate of the Apollo Holders, other than in a Public Sale (a “ Tag-Along Transaction ”), it shall give written notice to each Holder offering such Holder the option to participate in such Tag-Along Transaction (a “ Sale Notice ”). The Sale Notice shall set forth in reasonable detail the material terms and conditions of the proposed Tag-Along Transaction and identify the contemplated transferee or Group.

(b) Each Holder may, by written notice to the Apollo Holders (a “ Tag-Along Notice ”) delivered within ten (10) days after the delivery of the Sale Notice (such Holder delivering such timely notice being a “ Tag-Along Holder ”), elect to sell in such Tag-Along Transaction all or a portion of the shares of Class A Common Stock held by such Holder or shares of Class A Common Stock issuable upon conversion of the Convertible Notes held by such Holder on the same terms and conditions as the Apollo Holders, provided that, without the consent of the Apollo Holders, the Proportionate Percentage of shares of Common Stock to be sold by any Tag-Along Holder will not exceed the Proportionate Percentage of shares of Common Stock that the Apollo Holders propose to sell or transfer in the applicable Tag-Along Transaction; provided that, to the extent that any Tag-Along Holder needs to convert all or a portion of its Convertible Notes into shares of Class A Common Stock in order to participate in the applicable Tag-Along Transaction, the Apollo Holders shall structure the applicable Tag-Along Transaction to enable such conversion to occur on the closing date of such Tag-Along Transaction.

 

7


(c) If the Holder does not deliver a timely Tag-Along Notice, then the Apollo Holders may thereafter consummate the Tag-Along Transaction, at the same sale price and on the same other terms and conditions as are described in the Sale Notice (including, without limitation, the number of shares of Common Stock being sold), for a period of one hundred twenty (120) days thereafter (subject to extension in the event of required regulatory approvals not having been obtained by such date but in any event no later than two hundred seventy (270) days after delivery of the Tag-Along Notice). In the event the Apollo Holders have not consummated the Tag-Along Transaction within such one hundred twenty (120) day period (subject to extension as provided above), the Apollo Holders shall not thereafter consummate a Tag-Along Transaction, without first providing a Sale Notice and an opportunity to each Holder to sell in the manner provided above. If the Holder gives the Apollo Holders a timely Tag-Along Notice, then the Apollo Holders shall use reasonable efforts to cause the prospective transferee or Group to agree to acquire all the shares of Class A Common Stock identified in all timely Tag-Along Notices, upon the same terms and conditions as are applicable to the shares of Common Stock held by the Apollo Holders. If such prospective transferee or Group is unable or unwilling to acquire all the shares of Common Stock proposed to be included in the Tag-Along Transaction upon such terms, then the Apollo Holders may elect either to cancel such Tag-Along Transaction or to allocate the maximum number of shares that such prospective transferee or Group is willing to purchase among the Apollo Holders and the Tag-Along Holders in such proportions that the Apollo Holders’ and each such Tag-Along Holder’s Proportionate Percentages are reduced on a pro rata basis to reflect the total number of shares of Common Stock to be sold. In connection with the Tag-Along Transaction, each party shall bear its own expenses.

(d) For purposes of this Section 4, any holder of shares of Common Stock who has a contractual right (other than, for the avoidance of doubt, pursuant to this Agreement) to participate in such Tag-Along Transaction or any other holder of Common Stock who is otherwise participating in such Tag-Along Transaction with the consent of the Apollo Holders, shall be deemed to be a “Tag-Along Holder” under this Section 4 (provided that, for the avoidance of doubt, this Section 4(d) is not intended to nor shall it grant any rights to any Person to participate in any Tag-Along Transaction that is not otherwise granted pursuant to Section 4 (a)-(c) above).

Section 5. Notices . All notices, requests, consents and other communications hereunder shall be in writing and will be deemed to have been duly delivered: (i) upon personal delivery; (ii) three (3) days after being mailed by certified or registered mail, postage prepaid, return receipt requested; (iii) one (1) Business Day after being sent via a nationally recognized overnight courier service; or (iv) upon receipt of electronic or other confirmation of transmission if sent via facsimile or electronic mail to the appropriate party at the address, facsimile number or email specified on the signature pages hereto, or at such other addresses, facsimile numbers or email addresses as the parties may designate by written notice in accordance with this Section 5.

Section 6. Amendment . This Agreement may be amended, modified, supplemented or waived from time to time by an instrument in writing signed by the Company, Realogy and each

 

8


Apollo Holder; provided, however that this Agreement may not be modified in a manner that is materially adverse to any Holder without the approval of such Holder.

Section 7. Term; Termination . Unless earlier terminated by the mutual agreement of all the parties hereto, this Agreement shall terminate automatically upon the earlier of (i) the dissolution, liquidation or winding-up of the Company (unless the Company continues to exist after such dissolution, liquidation or winding-up as a limited liability company or in another form, whether incorporated in Delaware or another jurisdiction), (ii) upon consummation of a Qualified Public Offering, (iii) with respect to each Holder, the first date on which such Holder, collectively with its Affiliates or funds or accounts managed by such Holder, ceases to own, directly or indirectly, Convertible Notes (or shares of Class A Common Stock issued upon conversion of such Convertible Notes or a combination thereof) representing at least $15 million aggregate principal amount of the Convertible Notes acquired by such Holder, collectively with its Affiliates or funds or accounts managed by such Holder, on the Closing Date, and (iv) with respect to each Apollo Holder, the first date on which such Apollo Holder ceases to own, directly or indirectly, any shares of Common Stock or Convertible Notes convertible into shares of Common Stock.

Section 8. Miscellaneous Provisions .

(a) THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE 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.

(b) Whenever the context requires, the gender of all words used herein shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural.

(c) Except as provided in Section 7, any party to this Agreement who Disposes of all of his, her or its Common Stock and/or Convertible Notes in conformity with the terms of this Agreement shall cease to be a party to this Agreement and shall have no further rights hereunder.

(d) Each party to this Agreement acknowledges that a remedy at law for any breach or attempted breach of this Agreement will be inadequate, agrees that each other party to this Agreement shall be entitled to specific performance and injunctive and other equitable relief

 

9


in case of any such breach or attempted breach and further agrees to waive (to the extent legally permissible) any legal conditions required to be met for the obtaining of any such injunctive or other equitable relief (including posting any bond in order to obtain equitable relief).

(e) This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. Exchange and delivery of this Agreement by PDF via electronic mail or by exchange of facsimile copies bearing the facsimile signature of a party shall constitute a valid and binding execution and delivery of this Agreement by such party. Such PDF and facsimile copies shall constitute legally enforceable original documents.

(f) Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, and such invalid, illegal or otherwise unenforceable provisions shall be null and void as to such jurisdiction. It is the intent of the parties, however, that any invalid, illegal or otherwise unenforceable provisions be automatically replaced by other provisions which are as similar as possible in terms to such invalid, illegal or otherwise unenforceable provisions but are valid and enforceable to the fullest extent permitted by law.

(g) Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and other documents as any other party hereto reasonably may request in order to carry out the provisions of this Agreement and the consummation of the transactions contemplated hereby, in each case, subject to the provisions hereunder, including, without limitation, those set forth in Section 3 and Section 4.

(h) The parties to this Agreement agree that jurisdiction and venue in any action brought by any party hereto pursuant to this Agreement shall exclusively and properly lie in the Delaware State Chancery Court located in Wilmington, Delaware, or (in the event that such court denies jurisdiction) any federal or state court located in the State of Delaware. By execution and delivery of this Agreement each party hereto irrevocably submits to the jurisdiction of such courts for itself and in respect of its property with respect to such action. The parties hereto irrevocably agree that venue for such action would be proper in such court, and hereby waive any objection that such court is an improper or inconvenient forum for the resolution of such action. The parties further agree that the mailing by certified or registered mail, return receipt requested to the address of such parties set forth on the signature pages hereto, of any process required by any such court shall constitute valid and lawful service of process against them, without necessity for service by any other means provided by statute or rule of court.

 

10


(i) No course of dealing between the Company, or its subsidiaries, and the other parties hereto (or any of them) or any delay in exercising any rights hereunder will operate as a waiver of any rights of any party to this Agreement. The failure of any party to enforce any of the provisions of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

(j) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHT OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS ENTERED INTO IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN.

(k) This Agreement sets forth the entire agreement of the parties hereto as to the subject matter hereof and supersedes all previous agreements among all or some of the parties hereto, whether written, oral or otherwise, as to such subject matter. Unless otherwise provided herein, any consent required by any party hereto may be withheld by such party in its sole discretion.

(l) Except as otherwise expressly provided herein, no Person not a party to this Agreement, as a third party beneficiary or otherwise, shall be entitled to enforce any rights or remedies under this Agreement.

(m) If, and as often as, there are any changes in the Common Stock and/or Convertible Notes, as applicable, by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions of this Agreement, as may be required, so that the rights, privileges, duties and obligations hereunder shall continue with respect to the Common Stock or Convertible Notes as so changed.

(n) Without limiting anything in the Company’s certificate of incorporation or the bylaws, no director of the Company shall be personally liable to the Company or any party hereto as a result of any acts or omissions taken under this Agreement in good faith.

 

11


(o) Neither this Agreement nor any of the rights or obligations hereunder may be assigned by any Holder, directly or indirectly, in whole or in part, by operation of law or otherwise, provided that a Holder may assign its rights hereunder to an Affiliate of such Holder if such Holder delivers to the Company a (i) joinder agreement executed by such Affiliate in the form set forth in Exhibit A, (ii) documentation reasonably acceptable to Realogy certifying such Affiliate’s status as a QIB or an IAI and/or (iii) such other documentation as may be reasonably requested by Realogy. Any assignment in violation of the preceding sentence shall be null and void Each Apollo Holder may assign its rights or obligations, in whole or in part, under this Agreement to any member of the Apollo Holders, and such Person shall automatically become party to this Agreement and this Agreement shall be amended and restated to provide that such Person or a designee of such Person shall have the same rights and obligations of the Apollo Holders hereunder.

*    *    *    *    *

 

12


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date as of the date first above written.

 

REALOGY CORPORATION
By:   /s/ Anthony E. Hull
  Name:   Anthony E. Hull
  Title:   EVP, CFO & Treasurer
DOMUS HOLDINGS CORP.
By:   /s/ Anthony E. Hull
  Name:   Anthony E. Hull
  Title:   EVP, CFO & Treasurer

Address for notices to Realogy and to the Company:

One Campus Drive

Parsippany, NJ 07054

Phone: (973) 407-4669

Attention: Marilyn J. Wasser, Esq.

Facsimile: 973-407-6685

Electronic mail: marilyn.wasser@realogy.com

[ Signature Page of New Securityholders Agreement-York ]


DOMUS INVESTMENT HOLDINGS, LLC
By:  

Apollo Management VI, L.P.,

      its manager

By:  

AIF VI Management, LLC,

      its general partner

By:   /s/ Laurie Medley
  Name:   Laurie Medley
  Title:   Vice President
RCIV HOLDINGS, L.P. (CAYMAN)
By:  

Apollo Advisors VI (EH), L.P.,

its general partner

By:  

Apollo Advisors VI (EH-GP), Ltd.,

its general partner

By:   /s/ Laurie Medley
  Name:   Laurie Medley
  Title:   Vice President
APOLLO INVESTMENT FUND VI, L.P.
By:  

Apollo Advisors VI, L.P.,

its general partner

By:  

Apollo Capital Management VI, LLC,

its general partner

By:   /s/ Laurie Medley
  Name:   Laurie Medley
  Title:   Vice President

[ Signature Page of New Securityholders Agreement-York ]


DOMUS CO-INVESTMENT HOLDINGS, LLC
By:  

Apollo Management VI, L.P.,

its managing member

By:  

AIF VI Management, LLC,

its general partner

By:   /s/ Laurie Medley
  Name:   Laurie Medley
  Title:   Vice President

[ Signature Page of New Securityholders Agreement-York ]


RCIV HOLDINGS (LUXEMBOURG), S.A.R.L.
By:   /s/ Laurie Medley
Name:   Laurie Medley
Title:   Class A Manager

Address for notices to the Apollo Holders:

c/o Apollo Management VI, L.P.

9 West 57 th Street, 43 rd Floor

New York, NY 10019

Facsimile:

Attention: Marc Becker

Email: Becker@apollolp.com

[ Signature Page of New Securityholders Agreement-York ]


HFR ED YORK MASTER TRUST
By:   /s/ Jay Parsons
  Name:   Jay Parsons
  Title:   Corporate Controller

Address for notices to HFR ED York Master Trust:

 

c/o York Capital Management

767 Fifth Avenue, 17 th Floor

New York, NY 10153

Attention: Corporate Actions

Fax: 212-300-1302

Email: operations@yorkcapital.com

 

Series    Principal
amount of
Existing
Notes owned
as of the date
hereof
     Percentage
tendered
for
Convertible
Notes
    Percentage
tendered
for
Extended
Maturity
Notes
 

Existing Senior Cash Notes

   $ 426,000         100  

Existing Senior Toggle Notes

       

Existing Senior Subordinated Notes

   $ 49,000         100  

[ Signature Page of New Securityholders Agreement-York ]


YORK CREDIT OPPORTUNITIES MASTER FUND, L.P.
By:  

York Credit Opportunities Domestic

Holdings, LLC, its General Partner

By:   /s/ Adam J. Semler
  Name:   Adam J. Semler
  Title:   Chief Operating Officer

Address for notices to York Credit

Opportunities Master Fund, L.P.:

 

c/o York Capital Management

767 Fifth Avenue, 17 th Floor

New York, NY 10153

Attention: Corporate Actions

Fax: 212-300-1302

Email: operations@yorkcapital.com

 

Series   

Principal
amount of
Existing

Notes owned
as of the date
hereof

     Percentage
tendered
for
Convertible
Notes
    Percentage
tendered
for
Extended
Maturity
Notes
 

Existing Senior Cash Notes

   $ 28,290,000         100  

Existing Senior Toggle Notes

       

Existing Senior Subordinated Notes

   $ 2,453,000         100  

[ Signature Page of New Securityholders Agreement-York ]


JORVIK MULTI-STRATEGY MASTER FUND, L.P.
By:   Dinan Management, L.L.C., its General Partner
By:   /s/ Adam J. Semler
  Name:   Adam J. Semler
  Title:   Chief Operating Officer

Address for notices to Jorvik Multi-Strategy

Master Fund, L.P.:

 

c/o York Capital Management

767 Fifth Avenue, 17 th Floor

New York, NY 10153

Attention: Corporate Actions

Fax: 212-300-1302

Email: operations@yorkcapital.com

 

Series    Principal
amount of
Existing
Notes owned
as of the date
hereof
     Percentage
tendered
for
Convertible
Notes
    Percentage
tendered
for
Extended
Maturity
Notes
 

Existing Senior Cash Notes

   $ 1,093,000         100  

Existing Senior Toggle Notes

       

Existing Senior Subordinated Notes

   $ 125,000         100  

[ Signature Page of New Securityholders Agreement-York ]


LYXOR/YORK FUND LIMITED
By:   /s/ Ingrid Martin
  Name:   Ingrid Martin
  Title:   Deputy Head Managed Account Platform

Address for notices to Lyxor/York Fund Limited:

 

c/o York Capital Management

767 Fifth Avenue, 17 th Floor

New York, NY 10153

Attention: Corporate Actions

Fax: 212-300-1302

Email: operations@yorkcapital.com

 

Series    Principal
amount of
Existing
Notes owned
as of the date
hereof
     Percentage
tendered
for
Convertible
Notes
    Percentage
tendered
for
Extended
Maturity
Notes
 

Existing Senior Cash Notes

   $ 896,000         100  

Existing Senior Toggle Notes

       

Existing Senior Subordinated Notes

   $ 103,000         100  

[ Signature Page of New Securityholders Agreement-York ]


PERMAL YORK LTD.
By:   /s/ Deborah Watson
  Name:   Deborah Watson
  Title:   Director

Address for notices to Permal York Ltd:

 

c/o York Capital Management

767 Fifth Avenue, 17 th Floor

New York, NY 10153

Attention: Corporate Actions

Fax: 212-300-1302

Email: operations@yorkcapital.com

 

Series    Principal
amount of
Existing
Notes owned
as of the date
hereof
     Percentage
tendered
for
Convertible
Notes
    Percentage
tendered
for
Extended
Maturity
Notes
 

Existing Senior Cash Notes

   $ 634,000         100  

Existing Senior Toggle Notes

       

Existing Senior Subordinated Notes

   $ 73,000         100  

[ Signature Page of New Securityholders Agreement-York ]


YORK CREDIT OPPORTUNITIES FUND, L.P.
By:  

York Credit Opportunities Domestic

Holdings, LLC, its General Partner

By:   /s/ Adam J. Semler
  Name:   Adam J. Semler
  Title:   Chief Operating Officer

Address for notices to York Credit

Opportunities Fund, L.P.:

 

c/o York Capital Management

767 Fifth Avenue, 17 th Floor

New York, NY 10153

Attention: Corporate Actions

Fax: 212-300-1302

Email: operations@yorkcapital.com

 

 

Series   

Principal
amount of
Existing

Notes owned
as of the date
hereof

     Percentage
tendered
for
Convertible
Notes
    Percentage
tendered
for
Extended
Maturity
Notes
 

Existing Senior Cash Notes

   $ 18,347,000         100  

Existing Senior Toggle Notes

       

Existing Senior Subordinated Notes

   $ 1,591,000         100  

[ Signature Page of New Securityholders Agreement-York ]


YORK CAPITAL MANAGEMENT, L.P.
By:   Dinan Management, L.L.C., its General Partner
By:   /s/ Adam J. Semler
  Name:   Adam J. Semler
  Title:   Chief Operating Officer

Address for notices to York Capital

Management, L.P.:

 

c/o York Capital Management

767 Fifth Avenue, 17 th Floor

New York, NY 10153

Attention: Corporate Actions

Fax: 212-300-1302

Email: operations@yorkcapital.com

 

Series    Principal
amount of
Existing
Notes owned
as of the date
hereof
     Percentage
tendered
for
Convertible
Notes
    Percentage
tendered
for
Extended
Maturity
Notes
 

Existing Senior Cash Notes

   $ 7,881,000         100  

Existing Senior Toggle Notes

       

Existing Senior Subordinated Notes

   $ 906,000         100  

[ Signature Page of New Securityholders Agreement-York ]


YORK MULTI-STRATEGY MASTER FUND, L.P.
By:  

Dinan Management, L.L.C.,

its General Partner

By:   /s/ Adam J. Semler
  Name:   Adam J. Semler
  Title:   Chief Operating Officer

Address for notices to York Multi-Strategy

Master Fund, L.P.:

 

c/o York Capital Management

767 Fifth Avenue, 17 th Floor

New York, NY 10153

Attention: Corporate Actions

Fax: 212-300-1302

Email: operations@yorkcapital.com

 

Series    Principal
amount of
Existing Notes
owned as of
the date hereof
     Percentage
tendered
for
Convertible
Notes
    Percentage
tendered
for
Extended
Maturity
Notes
 

Existing Senior Cash Notes

   $ 13,256,000         100  

Existing Senior Toggle Notes

       

Existing Senior Subordinated Notes

   $ 1,524,000         100  

[ Signature Page of New Securityholders Agreement-York ]


EXHIBIT A

JOINDER AGREEMENT

This Joinder Agreement (“ Joinder ”) is executed pursuant to the terms of the Investor Securityholders Agreement dated as of January 5, 2011, a copy of which is attached hereto (the “ Investor Securityholders Agreement ”), by the transferee (“ Transferee ”) executing this Joinder. By the execution of this Joinder, the Transferee agrees as follows:

 

  1. Acknowledgement . Transferee acknowledges that Transferee is an Affiliate of the transferor of the rights and obligations under the Investor Securityholders Agreement (the “ Transferor ”). Capitalized terms used herein without definition are defined in the Investor Securityholders Agreement and are used herein with the same meanings set forth therein.

 

  2. Representations and Warranties . Transferee by delivering this Joinder represents and warrants that the Transferee and, to the knowledge of the Transferee, the Transferor, have complied with the terms and conditions relating to the assignment of rights and obligations in Section 8(o) of the Investor Securityholders Agreement.

 

  3. Effectiveness . This Joinder shall take effect and Transferee shall be bound by the Investor Securityholders Agreement immediately upon the execution hereof.

 

  4. Law . THIS JOINDER WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS ADOPTION, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.


   
Name of Transferee
   
Signature
   
Date

Exhibit 10.32

 

 

 

AMENDED AND RESTATED SECURITYHOLDERS AGREEMENT

by and among

DOMUS HOLDINGS CORP.

and the SECURITYHOLDERS that are parties hereto

DATED AS OF January 5, 2011

 

 

 


AMENDED AND RESTATED SECURITYHOLDERS AGREEMENT dated as of January 5, 2010 (this “ Agreement ”), by and among Domus Holdings Corp., a Delaware corporation (the “ Company ”), and the Securityholders that are parties hereto (each, a “ Securityholder ” and, collectively, the “ Securityholders ”).

WHEREAS , the Company and the Securityholders have previously entered into a Securityholders Agreement dated as of April 10, 2007 (the “ Original Agreement ”);

WHEREAS , upon consummation of the Exchange Transactions, RCIV Holdings (Luxembourg) S.à.r.l., a Luxembourg société à responsabilité limitée (“ RCIV Luxco ”), a wholly owned subsidiary of RCIV Holdings, L.P, a Cayman Islands exempted limited partnership (“ RCIV Cayman ”), will own Convertible Notes convertible into an equity interest in the Company;

WHEREAS , the Securityholders each own capital stock, or Convertible Notes convertible into capital stock, of the Company and may, from time to time thereafter, acquire additional equity interests in the Company; and

WHEREAS , each Securityholder deems it to be in the best interest of the Company and the Securityholders to amend and restate the Original Agreement and enter into this Agreement to set forth their agreements with respect to certain matters concerning the Company.

NOW, THEREFORE , in consideration of the premises and of the mutual consents and obligations hereinafter set forth, intending to be legally bound, the parties hereto hereby agree as follows:

Section 1. Definitions .

As used in this Agreement:

Accelerated Issuance ” has the meaning set forth in Section 5.

Affiliate ” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. For the avoidance of doubt, the term “ Affiliate ” as applied to the Sponsor Funds, shall not at any time include Co-Investment Holdings or any portfolio companies of Apollo Management V, L.P., Apollo Management VI, L.P., and Apollo Management VII, L.P. or any of their affiliates. 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.

Agreement ” has the meaning set forth in the preamble.

AIF VI ” means Apollo Investment Fund VI, LP, a Delaware limited partnership.

 

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Apollo Group ” means AIF VI, Domus Investment, RCIV Cayman, RCIV Luxco and Co-Investment Holdings, collectively with each of their respective Affiliates.

Board ” means the Board of Directors of the Company and any duly authorized committee thereof. All determinations by the Board required pursuant to the terms of this Agreement shall be made in the good faith sole discretion of the Board and shall be binding and conclusive.

Bylaws ” means the Company’s Amended and Restated Bylaws, as the same may be amended from time to time.

Charter ” means the Company’s Amended and Restated Certificate of Incorporation, as the same may be amended from time to time.

Class A Common Stock ” means the Class A common stock of the Company, par value $.01 per share.

Class B Common Stock ” means the Class B common stock of the Company, par value $.01 per share.

Closing Date ” means the date of the closing of the Exchange Transactions.

Co-Investment Holdings ” means Domus Co Investment Holdings LLC, a Delaware limited liability company.

Co-Investors ” means the members of Co-Investment Holdings.

Common Stock ” means the Class A Common Stock, and the Class B Common Stock, collectively, and any class of common stock into which the Class A Common Stock or Class B Common Stock may be reclassified, converted or exchanged.

Company ” has the meaning set forth in the preamble.

Company Offered Securities ” has the meaning set forth in Section 5.

Convertible Notes ” means 11.00% Series A Convertible Notes due 2018, 11.00% Series B Convertible Notes due 2018, and 11.00% Series C Convertible Notes due 2018 issued by Realogy.

Domus Investment ” means Domus Investment Holdings, LLC, a Delaware limited liability company.

Director ” has the meaning set forth in Section 7.1.

Disposition ” means any direct or indirect transfer, assignment, or sale or any other disposition for value, of Common Stock (or in the event that the Sponsor Funds own equity securities of the Company other than Common Stock, which shall not include any transfer, conversion, assignment, or sale or any other disposition of Convertible Notes, Disposition shall have a correlative meaning with respect to such securities), or any other transfer of beneficial ownership of Common Stock (excluding, for the avoidance of doubt, granting of a security interest, hedging or borrowing transactions or

 

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pledges or hypothecations in connection therewith) whether voluntary or involuntary. “ Dispose ” has a correlative meaning.

Disposition Notice ” has the meaning set forth in Section 2(i).

Disposition Transaction ” has the meaning set forth in Section 2(i).

Existing Notes ” means the 10.50% Senior Notes due 2014, 11.00%/11.75% Senior Toggle Notes due 2014, and 12.375% Senior Subordinated Notes due 2015 issued by Realogy.

Exchange Transactions ” means the exchange of the Existing Notes for the New Notes.

Extended Maturity Notes ” means the new 11.50% Senior Cash Notes due 2017, new 12.00% Senior Cash Notes due 2017, and new 13.375% Senior Subordinated Notes due 2018 issued by Realogy.

MIRA ” means the Management Investor Rights Agreement, as may be amended, from time to time, by and among the Company, the Sponsor Funds and certain members of Realogy management.

New Notes ” means the Extended Maturity Notes and the Convertible Notes.

Original Agreement ” has the meaning set forth in the recitals.

Person ” shall be construed broadly and shall include, without limitation, an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity or any department, agency or political subdivision thereof or any other entity.

Preemptive Event ” has the meaning set forth in Section 4.

Proportionate Percentage ” with respect to any Securityholder, shall mean a number (expressed as a percentage) equal to a fraction, the numerator of which is the total number of shares of Common Stock proposed to be transferred by the Sponsor Funds in the Disposition Transaction and the denominator of which is the total number of shares of Common Stock owned by the Sponsor Funds.

Public Offering ” means any 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 of 1933, as amended, including the rules and regulations promulgated thereunder (the “ Securities Act ”).

Qualified Public Offering ” means (a) an Underwritten Offering of shares of Class A Common Stock by the Company or any selling securityholders pursuant to an effective Registration Statement

 

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filed by the Company with the SEC (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 Class A 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 $200 million and (b) the listing of Company Class A Common Stock on the NASDAQ Global Select Market, the NASDAQ Global Market, the New York Stock Exchange or any successor exchange to the foregoing.

RCIV Cayman ” has the meaning set forth in the recitals.

RCIV Luxco ” has the meaning set forth in the recitals.

Realogy ” means Realogy Corporation.

SEC ” means the Securities and Exchange Commission.

Securities Act ” means the Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder.

Securityholder ” has the meaning set forth in the preamble.

Sponsor Fund Preemptive Event ” has the meaning set forth in Section 5.

Sponsor Funds Preemptive Rights Offer ” has the meaning set forth in Section 5.

Sponsor Funds Preemptive Rights Offer Notice ” has the meaning set forth in Section 5.

Sponsor Funds ” means AIF VI and Domus Investment, collectively with any other member of the Apollo Group to whom shares of Common Stock are transferred or that otherwise acquires Common Stock (for the avoidance of doubt, excluding Co-Investment Holdings). Immediately after the consummation of the Exchange Offers on the Closing Date, Sponsor Funds shall also include RCIV Cayman and RCIV Luxco. Sponsor Fund has a correlative meaning.

Underwritten Offering ” has the meaning set forth in Exhibit A.

Section 2. Equal Treatment Upon Disposition .

(i) In the event that the Sponsor Funds desire to effect any Disposition to any third party (excluding, for the avoidance of doubt, any Affiliate of the Sponsor Funds or member of the Apollo Group) in any transaction (including in connection with a public offering) (a “ Disposition Transaction ”), the Sponsor Funds shall give prior written notice to Co-Investment Holdings and the Company (a “ Disposition Notice ”). The Disposition Notice shall set forth the material terms (including without limitation, the number of shares of Common Stock proposed to be sold, the price per share and the form of consideration if other than cash for which a sale is proposed to

 

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be made) of the proposed Disposition Transaction and identify the contemplated transferee and the Proportionate Percentage of Co-Investment Holdings.

(ii) In any Disposition Transaction, Co-Investment Holdings and the Sponsor Funds shall transfer their respective Proportionate Percentages of Common Stock on substantially the same terms and conditions (but in any event at the same price per share and form of consideration). Co-Investment Holdings shall take all necessary and desirable actions requested by the Sponsor Funds in connection with the consummation of the Disposition Transaction, including the execution of such agreements and such instruments and the taking of such other actions as are reasonably necessary to provide customary representations, warranties, and indemnities as are customarily provided in a sale transaction (provided that (a) the proportionate liability of Co-Investment Holdings under any such indemnity shall not exceed the proportion that the shares being sold by Co-Investment Holdings in such Disposition Transaction bears to the total number of shares being sold by all sellers in such transaction, (b) Co-Investment Holdings’ obligation to indemnify shall be several and not joint, and (c) Co-Investment Holdings shall not be required to incur liability under such indemnity in excess of the proceeds received by Co-Investment Holdings in such sale), as well as escrow arrangements relating to such Disposition Transaction. It is agreed and understood that there may be more than one Disposition Transaction. If the number of shares of Common Stock proposed to be transferred by the Sponsor Funds together with those other shares of Common Stock that Co-Investment Holdings shall transfer pursuant to this clause (ii), would, if transferred, result in the proposed acquiror in a Disposition Transaction acquiring a greater number of shares of Common Stock than such acquiror is willing to acquire, the number of shares of Common Stock which shall be transferred by all Securityholders in such Disposition Transaction shall be reduced on a pro rata basis to achieve transfers which in the aggregate will result in the acquiror acquiring its desired number of shares of Common Stock.

(iii) In connection with any Disposition Transaction that is a Public Offering, Co-Investment Holdings shall be treated as a member of the “Apollo Group” pursuant to Sections 4 and 5 of the MIRA (such Sections 4 and 5 are attached to this Agreement as Exhibit A) and in the case of underwriter cutbacks applicable to the Apollo Group pursuant to the MIRA, such cutback will be allocated among the Sponsor Funds and Co-Investment Holdings based on their respective Proportionate Percentages. Sections 5(f) and (g) of the MIRA shall apply mutatis mutandis.

(iv) Except to the extent prohibited by applicable law or regulation, the Company shall take such actions as are necessary to facilitate the participation of Co-Investment Holdings in any Disposition Transaction pursuant to this Section 2 .

(v) No less than ten (10) business days prior to the anticipated closing date, or at such later time as may be requested by the Sponsor Funds, in connection with any Disposition Transaction pursuant to this Section 2 , Co-Investment Holdings shall deliver to the Sponsor Funds, the Company or the acquiror in such Disposition Transaction, as requested by the Sponsor Funds, against payment of the purchase price therefor, certificates representing its shares of Common Stock to be sold (if such shares are certificated), duly endorsed for transfer or accompanied by duly endorsed stock

 

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powers, and evidence of the absence of liens, encumbrances and adverse claims with respect thereto and of such other matters as are deemed necessary by the Company for the proper transfer of such shares on the books of the Company.

Section 3. No Dispositions . Without the prior written consent of the Company and each of the Sponsor Funds, subject to Section 2 above, Co-Investment Holdings shall not make any Disposition, directly or indirectly. The preceding sentence shall apply with respect to all shares of Common Stock held at any time by Co-Investment Holdings. Any Disposition or attempted Disposition in breach of this Agreement shall be void ab initio and of no effect. In connection with any attempted Disposition in breach of this Agreement, the Company may hold and refuse to transfer any Common Stock or any certificate therefor, in addition to and without prejudice to any and all other rights or remedies which may be available to it or the Holders.

Section 4. Preemptive Rights . Co-Investment Holdings shall have the right to participate, in whole or in part, on a pro rata basis (measured with reference to the percentage of Common Stock owned by Co-Investment Holdings relative to the Common Stock owned by the Sponsor Funds, collectively), in any subscription for equity securities of the Company or any subsidiary of the Company (or securities convertible into or exchangeable for any such equity securities) by the Sponsor Funds (other than in connection with director or officer compensation plans or arrangements), on the same terms, cash purchase price and subject to the same conditions as applied to the Sponsor Funds (a “ Preemptive Event ”). The offer to Co-Investment Holdings to participate in any such equity issuance shall be made either prior to or as soon as reasonably practicable after the relevant issuance to achieve the same effect. The Company shall give prompt notice to Co-Investment Holdings of any Preemptive Event, including the terms of such subscription, which Co-Investment Holdings shall have 10 days to accept or reject (in whole or in part), provided that in the event Co-Investment Holdings does not reply in such period, such offer shall be deemed rejected. If and to the extent Co-Investment Holdings rejects (in whole or in part) its respective right for subscription in a Preemptive Event, it shall forfeit such opportunity, which opportunity shall revert to the Sponsor Funds.

Section 5. Sponsor Funds Preemptive Rights . If any time prior to (but not including) a Qualified Public Offering, the Company or Realogy proposes to issue or sell any equity securities (or securities convertible into, issuable upon exercise of or exchangeable for any such equity securities, but not including (i) securities issued pursuant to any equity compensation plans, (ii) securities issued as a dividend or distribution on all shares of Common Stock or upon any stock split, recapitalization or other subdivision or combination of securities, (iii) securities issued upon the exercise, conversion or exchange of any options, warrants or convertible securities issued on or prior to the Closing Date or for which the Holder has had the opportunity to subscribe for pursuant to its preemptive rights (and which shall include the Convertible Notes) and (iv) securities issued (other than to an Apollo Holder) (X) as consideration in an acquisition (whether by stock sale, merger, recapitalization, asset purchase or otherwise) or (Y) in connection with a joint venture or strategic alliance (collectively, “ Company Offered Securities ”), the Company shall give notice in writing (the “ Sponsor Funds Preemptive Rights Offer Notice ”) to the Sponsor Funds of such proposed issuance or sale of such equity securities (a “ Sponsor Funds Preemptive Event ”). The Sponsor Funds Preemptive Rights Offer Notice shall describe the terms of the proposed transaction, identify the proposed purchaser(s), and contain an offer

 

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(the “ Sponsor Funds Preemptive Rights Offer ”) to sell Company Offered Securities to the Sponsor Funds, at the same price, on the same terms and for the same consideration to be paid by the proposed purchaser(s) as set forth in this Section 5. The Sponsor Funds shall have the right to participate in the Sponsor Funds Preemptive Event up to its respective pro rata fully-diluted portion of its equity ownership (which shall be a fraction of the Company Offered Securities determined by dividing (A) the number of shares of Common Stock then owned by the Sponsor Funds on a fully diluted basis assuming the conversion of all of its Convertible Notes by (B) the number of shares of Common Stock then outstanding (before giving effect to the Sponsor Fund Preemptive Event) on a fully-diluted basis assuming, among other things, the conversion of all Convertible Notes then outstanding. The Sponsor Funds Preemptive Rights Offer Notice shall be delivered at least fifteen (15) days prior to the relevant issuance or sale. If the Sponsor Funds fails to accept in writing the Sponsor Funds Preemptive Rights Offer by the tenth (10th) day after the Company’s delivery of the Sponsor Funds Preemptive Rights Offer Notice, the Sponsor Funds shall have no further rights with respect to the Sponsor Funds Preemptive Event ; provided, however, that if (i) any of the terms of the Sponsor Fund Preemptive Event, taken as a whole, materially change after the date of the Sponsor Funds Preemptive Rights Offer Notice or (ii) the issuance or sale of the Company Offered Securities pursuant to the Sponsor Funds Preemptive Event shall not have occurred within one hundred twenty (120) days after the delivery of the Sponsor Funds Preemptive Rights Offer Notice (subject to extension in the event of required regulatory approvals not having been obtained by such date but in any event no later than one hundred eighty (180) days after delivery of the Sponsor Funds Preemptive Rights Offer Notice), then, in each case, any additional issuances shall again be subject to this Section 5 and the Company shall be required to give a new Sponsor Funds Preemptive Rights Offer Notice within the time period described above and such Holder shall have an additional ten (10) days to accept in writing the Sponsor Funds Preemptive Rights Offer. Notwithstanding any of the foregoing, following any Sponsor Funds Preemptive Rights Offer Notice, the Company may immediately issue, prior to the expiration of the time periods above, the Company Offered Securities whenever it determines that it would be to the advantage of the Company for it to issue such Company Offered Securities (an “Accelerated Issuance”). To the extent that the Company effects an Accelerated Issuance and the Sponsor Funds accept in writing the Sponsor Funds Preemptive Rights Offer, the Company will issue to the Sponsor Funds additional Company Offered Securities at the same price, on the same terms and for the same consideration paid by the purchaser(s) in the Accelerated Issuance, such that the percentage of the Company Offered Securities issued to the Sponsor Funds would equal the percentage of the Company Offered Securities the Sponsor Funds would have otherwise received in the absence of an Accelerated Issuance in accordance with this Section 5.

Section 6. Dividends and Distributions . In the event that any dividend is paid on any shares of Common Stock or any other distribution is made in respect of shares of Common Stock, shares of Common Stock owned by Co-Investment Holdings shall be treated in the same manner (on a pro rata basis) as shares of Common Stock owned by the Sponsor Funds.

Section 7. The Board

7.1 Composition . As of the Closing Date, the Board shall include two Directors previously designated by Co-Investment Holdings and AIF VI, three Directors designated by the Sponsor Funds

 

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and any additional Directors or non-voting observer designated pursuant to any agreement in which the Company has granted to a Person any right to designate a Director or a non-voting observer. Directors shall serve for the time periods set forth in the Company’s Charter or Bylaws. Without limiting any Securityholders’ rights pursuant to this Section 7.1 , the Board may increase or decrease its size in accordance with the provisions of the Charter and Bylaws.

7.2 Designation; Removal and Replacement . Each of Co-Investment Holdings, AIF VI and the Sponsor Funds shall have the right to continue to designate Directors as provided in Section 7.1 for so long as such Securityholder owns any shares of Common Stock or Convertible Notes, as applicable. Any Securityholder may remove and replace its Director designee for any reason and at any time and shall have the right to designate a replacement Director. No delay by a Securityholder in designating its respective Director designees shall impair such Securityholders’ right to subsequently designate its Director designee.

7.3 Implementation; Facilitation . Each of the parties to this Agreement agrees that it shall (and shall cause its Affiliates to) cooperate in facilitating any action described in or required by this Agreement, including by voting all of the shares of Common Stock under its control in support of such action. Without limiting the generality of the foregoing, each of the parties to this Agreement agrees that it shall (and shall cause its Affiliates to) vote its shares of Common Stock and any shares of Common Stock it holds proxies or powers of attorney with respect to or execute consents, as the case may be, and take all other necessary action (including nominating such designees and calling an annual or special meeting of stockholders) in order to ensure that the composition of the Board is as set forth in this Section 7 and otherwise to give effect to the provisions of this Section 7 . Each party shall vote its shares of Common Stock and any shares of Common Stock it holds proxies or powers of attorney with respect to, and shall take all other actions necessary, to ensure that the Charter and Bylaws facilitate and do not at any time conflict with any provision of this Agreement. The Company agrees that it will (and will cause its officers and its Subsidiaries to) take all such action as shall be necessary (including by voting all shares of capital stock or other equity interests that it holds in each of its Subsidiaries, either in a meeting or in an action by written consent) to ensure that the articles of incorporation and by-laws or other applicable governing documents of each of its Subsidiaries are consistent with, and do not conflict with, any provision of this Agreement and that the boards of directors, general partners, managing members or other applicable governing body or persons for each such Subsidiary shall act in accordance with the provisions of this Agreement and that each Subsidiary board of directors or other applicable governing body is as set forth in Section 7 .

Section 8. Provision of Financial Statements . Prior to such time as Realogy is a reporting company under the Securities Exchange Act of 1934, as amended, the Company shall provide to Co-Investment Holdings such annual and quarterly reports that the Company is required to provide to its lenders under the Company’s senior secured credit facility.

Section 9. Notices . All notices, requests, consents and other communications hereunder shall be in writing and will be deemed to have been duly delivered: (i) upon personal delivery; (ii) three (3) days after being mailed by certified or registered mail, postage prepaid, return receipt requested; (iii)

 

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one (1) Business Day after being sent via a nationally recognized overnight courier service; or (iv) upon receipt of electronic or other confirmation of transmission if sent via facsimile or electronic mail to the appropriate party at the address, facsimile number or email specified on the signature pages hereto, or at such other addresses, facsimile numbers or email addresses as the parties may designate by written notice in accordance with this Section 9.

Section 10. Amendment . This Agreement may be amended, modified, supplemented or waived from time to time by an instrument in writing signed by the Company and each of the Securityholders; provided , however , that this Agreement may not be modified in a manner that is disproportionately materially adverse (including any amendment that adversely affects the liquidity rights or pari passu economic status of Co-Investment Holdings or the Co-Investors vis-à-vis the Sponsor Funds) to Co-Investment Holdings without the prior approval of Co-Investors representing at least a majority of the interests in Co-Investment Holdings (excluding interests held by the Sponsor Funds or any Affiliates of the Sponsor Funds).

Section 11. Miscellaneous Provisions .

(a) THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE 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.

(b) Whenever the context requires, the gender of all words used herein shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural.

(c) This Agreement shall be binding upon the Company, each of the parties hereto, and their respective permitted successors and assigns.

(d) This Agreement shall only be effective on the Closing Date and shall be automatically terminated if the Exchange Offers contemplated herein are terminated or abandoned; provided , that in such event, the Securityholders Agreement, dated April 10, 2007 shall remain in full force and effect. Unless earlier terminated by the mutual agreement of all the parties hereto (in the case of Co-Investment Holdings, upon the approval of Co-Investors representing at least a majority of interests in Co-Investment Holdings), this Agreement shall terminate automatically upon the dissolution of the Company (unless the Company continues to exist after such dissolution as a limited liability company or in another form, whether incorporated in Delaware or another jurisdiction).

 

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(e) Any Securityholder who disposes of all of his, her or its Common Stock and/or disposes or transfers his, her or its Convertible Notes in conformity with the terms of this Agreement shall cease to be a party to this Agreement and shall have no further rights hereunder other than rights to indemnification under Section 2(iii) , if applicable.

(f) Each party to this Agreement acknowledges that a remedy at law for any breach or attempted breach of this Agreement will be inadequate, agrees that each other party to this Agreement shall be entitled to specific performance and injunctive and other equitable relief in case of any such breach or attempted breach and further agrees to waive (to the extent legally permissible) any legal conditions required to be met for the obtaining of any such injunctive or other equitable relief (including posting any bond in order to obtain equitable relief).

(g) This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. Exchange and delivery of this Agreement by PDF via electronic mail or by exchange of facsimile copies bearing the facsimile signature of a party shall constitute a valid and binding execution and delivery of this Agreement by such party. Such PDF and facsimile copies shall constitute legally enforceable original documents.

(h) Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, and such invalid, illegal or otherwise unenforceable provisions shall be null and void as to such jurisdiction. It is the intent of the parties, however, that any invalid, illegal or otherwise unenforceable provisions be automatically replaced by other provisions which are as similar as possible in terms to such invalid, illegal or otherwise unenforceable provisions but are valid and enforceable to the fullest extent permitted by law.

(i) Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and other documents as any other party hereto reasonably may request in order to carry out the provisions of this Agreement and the consummation of the transactions contemplated hereby, in each case, subject to the provisions hereunder.

(j) The parties to this Agreement agree that jurisdiction and venue in any action brought by any party hereto pursuant to this Agreement shall exclusively and properly lie in the Delaware State Chancery Court located in Wilmington, Delaware, or (in the event that such court denies jurisdiction) any federal or state court located in the State of Delaware. By execution and delivery of this Agreement each party hereto irrevocably submit to the jurisdiction of such courts for himself and in respect of his property with respect to such action. The parties hereto irrevocably agree

 

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that venue for such action would be proper in such court, and hereby waive any objection that such court is an improper or inconvenient forum for the resolution of such action. The parties further agree that the mailing by certified or registered mail, return receipt requested, of any process required by any such court shall constitute valid and lawful service of process against them, without necessity for service by any other means provided by statute or rule of court.

(k) No course of dealing between the Company, or its subsidiaries, and the Securityholders (or any of them) or any delay in exercising any rights hereunder will operate as a waiver of any rights of any party to this Agreement. The failure of any party to enforce any of the provisions of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

(l) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHT OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS ENTERED INTO IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN.

(m) Except as otherwise expressly provided herein or in the Co-Investment Agreement with respect to Co-Investment Holdings and the Co-Investors (including Section 11.02 thereof), this Agreement sets forth the entire agreement of the parties hereto as to the subject matter hereof and supersedes all previous agreements among all or some of the parties hereto, whether written, oral or otherwise, as to such subject matter. Unless otherwise provided herein, any consent required by the Company may be withheld by the Company in its sole discretion.

(n) Except as otherwise expressly provided herein, no Person not a party to this Agreement, as a third party beneficiary or otherwise, shall be entitled to enforce any rights or remedies under this Agreement.

(o) If, and as often as, there are any changes in the Common Stock and/or Convertible Notes, as applicable, by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions of this Agreement, as may be required, so that the rights, privileges, duties and obligations hereunder shall continue with respect to the Common Stock or Convertible Notes as so changed.

 

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(p) Without limiting anything in the Charter or the Bylaws, no director of the Company shall be personally liable to the Company or any Securityholder as a result of any acts or omissions taken under this Agreement in good faith.

(q) In the event additional shares of Common Stock and/or Convertible Notes as applicable are issued by the Company to a Securityholder at any time during the term of this Agreement, either directly or upon the exercise or exchange of securities of the Company exercisable for or exchangeable into shares of Common Stock, such additional shares of Common Stock or Convertible Notes, as a condition to their issuance, shall become subject to the terms and provisions of this Agreement, as applicable.

(r) Notwithstanding anything to the contrary contained herein, but subject to Section 2, the Sponsor Funds may assign their rights or obligations, in whole or in part, under this Agreement to any member of the Apollo Group. In the event that any additional members of the Apollo Group becomes an owner of Common Stock, such member shall automatically become party to this Agreement and this Agreement shall be amended and restated to provide that such Person or a designee of such Person shall have the same rights and obligations of the Sponsor Funds hereunder.

*    *    *    *    *

 

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This Securityholders Agreement is executed by the Company and by the other parties hereto to be effective as of the date first above written.

 

DOMUS HOLDINGS CORP.
By:   /s/ Anthony E. Hull
 

Name: Anthony E. Hull

Title: EVP, CFO & Treasurer

 

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DOMUS INVESTMENT HOLDINGS, LLC
By:  

Apollo Management VI, L.P.,

    its manager

By:  

AIF VI Management, LLC,

    its general partner

By:   /s/ Laurie Medley
 

Name: Laurie Medley

Title: Vice President

 

RCIV HOLDINGS, L.P. (CAYMAN)
By:  

Apollo Advisors VI (EH), L.P.,

its general partner

By:  

Apollo Advisors VI (EH-GP), Ltd.,

its general partner

By:   /s/ Laurie Medley
 

Name: Laurie Medley

Title: Vice President

 

APOLLO INVESTMENT FUND VI, L.P.
By:  

Apollo Advisors VI, L.P.,

its general partner

By:  

Apollo Capital Management VI, LLC,

its general partner

By:   /s/ Laurie Medley
 

Name: Laurie Medley

Title: Vice President

 

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DOMUS CO-INVESTMENT HOLDINGS, LLC
By:  

Apollo Management VI, L.P.,

its managing member

By:  

AIF VI Management, LLC,

its general partner

By:   /s/ Laurie Medley
 

Name: Laurie Medley

Title: Vice President

 

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RCIV HOLDINGS (LUXEMBOURG), S.A.R.L.
By:   /s/ Laurie Medley

Name:

Title:

 

Laurie Medley

Class A Manager

 

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ANNEX I

ADDRESSES FOR NOTICE

DOMUS HOLDINGS CORP.

DOMUS INVESTMENT HOLDINGS, LLC

RCIV HOLDINGS, L.P. (CAYMAN)

RCIV HOLDINGS (LUXEMBOURG) S.A.R.L.

APOLLO INVESTMENT FUND VI, L.P.

DOMUS CO-INVESTMENT HOLDINGS LLC

c/o Apollo Management VI, L.P.

9 West 57 th Street, 43 rd Floor

New York, NY 10019

Attention: Ali Rashid

Email: Rashid@apollolp.com

Facsimile:

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Facsimile: (212) 735-2000

Attention:  Stacy J. Kanter, Esq.

                  Thomas W. Greenberg, Esq.

 

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EXHIBIT A

Sections 4 and 5 of MIRA

Section 4. Demand Registration Rights .

(a) Subject to the provisions of this Section 4, at any time and from time to time after the date hereof, the Apollo Group may make one or more written requests (each, a “ Registration Request ”) to the Company for registration under and in accordance with the provisions of the Securities Act of all or part of their shares of Common Stock.

(b) All Registration Requests made pursuant to this Section 4 will specify the aggregate amount of shares of Common Stock to be registered and will also specify the intended methods of disposition thereof. Subject to Section 4(c), promptly upon receipt of any such Registration Request, the Company will use its reasonable best efforts to effect such registration under the Securities Act (including, without limitation, filing post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with the applicable regulations promulgated under the Securities Act) of the shares of Common Stock which the Company has been so requested to register within 180 days of such request (or within 120 days of such request in the case of a Registration Request after a Qualified Public Offering (subject to any lock-up restrictions)).

(c) If the Company receives a Registration Request and the Company furnishes to the Apollo Group a copy of a resolution of the Board certified by the secretary of the Company stating that in the good faith judgment of the Board it would be materially adverse to the Company for a Registration Statement to be filed on or before the date such filing would otherwise be required hereunder, the Company shall have the right to defer such filing for a period of not more than ninety (90) days after the date such filing would otherwise be required hereunder. The Company shall not be permitted to take such action more than once in any 360-day period. If the Company shall so postpone the filing of a Registration Statement, the Apollo Group may withdraw its Registration Request by so advising the Company in writing within thirty (30) days after receipt of the notice of postponement. In addition, if the Company receives a Registration Request and the Company is then in the process of preparing to engage in a Public Sale, the Company shall inform the Apollo Group of the Company’s intent to engage in a Public Sale and may require the Apollo Group to withdraw such Registration Request for a period of up to 120 days so that the Company may complete its Public Sale. In the event that the Company ceases to pursue such Public Sale, it shall promptly inform the Apollo Group and the Apollo Group shall be permitted to submit a new Registration Request. The foregoing shall be without prejudice to any rights of the Apollo Group pursuant to Section 5.

(d) Registrations under this Section 4 shall be on such appropriate registration form of the Securities and Exchange Commission (i) as shall be selected by the Company and as shall be reasonably acceptable to the Apollo Group and (ii) as shall permit the disposition of such Common Stock in accordance with the intended method or methods of disposition specified in the Registration Request. If, in connection with any registration under this Section 4 which is proposed by the Company to be on Form S-3 or any successor form, the managing underwriter, if any, shall advise the

 

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Company in writing that in its opinion the use of another permitted form is of material importance to the success of the offering, then such registration shall be on such other permitted form.

(e) The Company shall use its best efforts to keep any Registration Statement filed in response to a Registration Request effective for as long as is necessary for the Apollo Group to dispose of the covered securities.

(f) In the case of a Registration Request that involves an Underwritten Offering, the Apollo Group shall select the underwriters, provided such selection is reasonably acceptable to the Company.

Section 5. Piggy-Back Registration Rights .

(a) Participation . Subject to Section 5(b), if upon or at any time after the consummation of a Qualified Public Offering (or prior to the consummation of a Qualified Public Offering with the Company’s consent), the Company files a Registration Statement (i) in connection with the exercise of any demand rights by the Apollo Group or any other Holder or Holders possessing such rights, or (ii) in connection with which the Apollo Group exercises piggy-back registration rights (other than a registration on Form S-4 or S-8 or any successor form to such Forms or any registration of securities as it relates to an offering and sale to management of the Company pursuant to any employee stock plan or other employee benefit plan arrangement) with respect to an offering that includes any shares of Common Stock, then the Company shall give prompt notice (the “ Initial Notice ”) to the Management Holders and the Management Holders shall be entitled to include in such Registration Statement the Registrable Securities (as defined in Section 5(h)) held by them. If the Management Holders elect to include any or all of their Registrable Securities in such Registration Statement, then the Company shall give prompt notice (the “ Piggy-Back Notice ”) to each Holder (excluding the Management Holders) and each such Holder shall be entitled to include in such Registration Statement the Registrable Securities held by it. The Initial Notice and Piggy-Back Notice shall offer the Management Holders and the Holders, respectively, the right, subject to Section 5(b) (the “ Piggy-Back Registration Right ”), to register such number of shares of Registrable Securities as each Management Holder and each Holder may request and shall set forth (i) the anticipated filing date of such Registration Statement and (ii) the number of shares of Common Stock that is proposed to be included in such Registration Statement. Subject to Section 5(b), the Company shall include in such Registration Statement such shares of Registrable Securities for which it has received written requests to register such shares within fifteen (15) days after the Initial Notice and seven (7) days after the Piggy-Back Notice has been given. A Management Holder may exercise Piggy-Back Registration Rights with respect to a Qualified Public Offering or any subsequent Public Offering.

(b) Underwriters’ Cutback . Notwithstanding the foregoing, if a registration pursuant to Section 4 or Section 5 involves an Underwritten Offering (as defined in Section 5(h)(ii)) and the managing underwriter or underwriters of such proposed Underwritten Offering advises the Company that the total or kind of securities which such Holders and any other persons or entities intend to include in such offering would be reasonably likely to adversely affect the price, timing or distribution of the securities offered in such offering, then the number of securities proposed to be included in such registration shall be allocated among the Company, the Apollo Group, and all of the selling Management Holders proportionately, such that the number of securities that each such Person shall be entitled to sell in the Underwritten Offering (other than the initial Underwritten Offering) shall be included in the following order:

 

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(i) In the event of an exercise of any demand rights by the Apollo Group or any other Holder or Holders possessing such rights:

(1) first, the Registrable Securities held by the Person exercising a demand right pursuant to Section 4 or pursuant to any other agreement in which the Company has granted demand rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person in connection with such registration;

(2) second, the Registrable Securities held by the Persons requesting their Registrable Securities to be included in such registration pursuant to the terms of Section 5 or pursuant to any other agreement in which the Company has granted piggy-back registration rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person at the time of such registration; and

(3) third, the securities to be issued and sold by the Company in such registration.

(ii) In all other cases:

(1) first, the securities to be issued and sold by the Company in such registration; and

(2) second, the Registrable Securities held by the Persons requesting their Registrable Securities be included in such registration pursuant to the terms of this Section 5 or pursuant to any other agreement in which the Company has granted piggy-back registration rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person at the time of such registration.

Notwithstanding anything to the contrary set forth in this Section 5(b), if the managing underwriter for the initial Underwritten Offering advises the Company that the inclusion of the number of shares of Common Stock proposed to be included in any registration by any particular Management Holder would interfere with the successful marketing (including pricing) of such shares to be offered thereby, then the number of such shares proposed to be included in such registration by such Management Holder shall be reduced to the lower of the number of such shares that the managing underwriter advises that such Holder may sell in the Underwritten Offering and the number of such shares calculated pursuant to the foregoing.

(c) Lock-up . If the Company at any time shall register shares of Common Stock under the Securities Act for sale to the public, no Management Holder shall sell publicly, make any short sale of, grant any option for the purchase of, or otherwise dispose publicly of, any capital stock of the Company without the prior written consent of the Company, for the period of time in which the Apollo Group has similarly agreed not to sell publicly, make any short sale of, grant any option for the purchase of, or otherwise dispose publicly of, any capital stock of the Company. In addition, if requested by the managing underwriter(s), in connection with the initial Public Offering, all Holders shall enter into a customary lock-up agreement with the managing underwriter(s) for such period as may be required by the managing underwriter(s), subject to customary exceptions in the Company’s discretion.

 

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(d) Company Control . The Company may decline to file a Registration Statement after giving the Initial Notice or the Piggy-Back Notice, or withdraw a Registration Statement after filing and after such Piggy-Back Notice, but prior to the effectiveness of the Registration Statement, provided that the Company shall promptly notify each Holder in writing of any such action and provided further that the Company shall bear all reasonable expenses incurred by such Holder or otherwise in connection with such withdrawn Registration Statement. Except as provided in Section 4(f), notwithstanding any other provision herein, the Company shall have sole discretion to select any and all underwriters that may participate in any Underwritten Offering.

(e) Participation in Underwritten Offerings . No Person may participate in any Underwritten Offering hereunder unless such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Persons entitled to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements, lock-ups and other documents required for such underwriting arrangements. Nothing in this Section 5(e) shall be construed to create any additional rights regarding the piggy-back registration of Registrable Securities in any Person otherwise than as set forth herein.

(f) Expenses . The Company will pay all registration fees and other reasonable expenses in connection with each registration of Registrable Securities requested pursuant to this Section 5; provided, that each Holder shall pay all applicable underwriting fees, discounts and similar charges (pro rata based on the securities sold) and that all Holders as a group shall be entitled to a single counsel (at the Company’s expense) to be selected by the Apollo Group.

(g) Indemnification .

(i) Indemnification by the Company . The Company agrees to indemnify and hold harmless, to the full extent permitted by law, each selling Holder, its officers, directors, employees and representatives and each Person who controls (within the meaning of the Securities Act) such selling Holder against any losses, claims, damages, liabilities and expenses caused by any untrue or alleged untrue statement of a material fact contained in any Registration Statement, prospectus or preliminary prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement therein not misleading, except insofar as the same may be caused by or contained in any information furnished in writing to the Company by such selling Holder for use therein; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any such preliminary prospectus if (A) such selling Holder failed to deliver or cause to be delivered a copy of the prospectus to the Person asserting such loss, claim, damage, liability or expense after the Company has furnished such selling Holder with a sufficient number of copies of the same and (B) the prospectus completely corrected in a timely manner such untrue statement or omission; and provided, further, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission in the prospectus, if such untrue statement or alleged untrue statement, omission or alleged omission is completely corrected in an amendment or supplement to the prospectus and the selling Holder thereafter fails to deliver such prospectus as so amended or supplemented prior to or concurrently with the sale of the securities to the Person asserting such loss, claim, damage, liability or expense after the Company had furnished such selling Holder with a sufficient number of copies of the same. The Company will also indemnify

 

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underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, their officers and directors and each Person who controls such Persons (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the selling Holder, if requested.

(ii) Indemnification by Selling Holders . Each selling Holder agrees to indemnify and hold harmless, to the full extent permitted by law, the Company, its directors, officers, employees and representatives and each Person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages or liabilities and expenses caused by any untrue or alleged untrue statement of a material fact contained in any Registration Statement or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such selling Holder to the Company for inclusion in such Registration Statement, prospectus or preliminary prospectus and has not been corrected in a subsequent writing prior to or concurrently with the sale of the securities to the Person asserting such loss, claim, damage, liability or expense. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the proceeds received by such selling Holder upon the sale of the securities giving rise to such indemnification obligation. The Company and the selling Holders shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above with respect to information so furnished in writing by such Persons for inclusion in any prospectus or Registration Statement.

(iii) Conduct of Indemnification Proceedings . Any Person entitled to indemnification hereunder will (i) give prompt (but in any event within 30 days after such Person has actual knowledge of the facts constituting the basis for indemnification) written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any delay or failure to so notify the indemnifying party shall relieve the indemnifying party of its obligations hereunder only to the extent, if at all, that the indemnifying party is actually prejudiced by reason of such delay or failure; provided, further, however, that any Person entitled to indemnification hereunder shall have the right to select and employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (a) the indemnifying party has agreed in writing to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim within a reasonable time after receipt of notice of such claim from the Person entitled to indemnification hereunder and employ counsel reasonably satisfactory to such Person or (c) in the reasonable judgment of any such Person, based upon advice of counsel, a conflict of interest may exist between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person). If such defense is not assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld), provided that an indemnified party shall not be required to consent to any settlement involving the imposition of equitable remedies or involving the imposition of any material obligations on such indemnified party other than financial obligations for which such indemnified party will be indemnified hereunder. No indemnifying party will be required to consent to entry of any judgment or enter into any settlement which does not

 

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include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. Whenever the indemnified party or the indemnifying party receives a firm offer to settle a claim for which indemnification is sought hereunder, it shall promptly notify the other of such offer. If the indemnifying party refuses to accept such offer within 20 business days after receipt of such offer (or of notice thereof), such claim shall continue to be contested and, if such claim is within the scope of the indemnifying party’s indemnity contained herein, the indemnified party shall be indemnified pursuant to the terms hereof. If the indemnifying party notifies the indemnified party in writing that the indemnifying party desires to accept such offer, but the indemnified party refuses to accept such offer within 20 business days after receipt of such notice, the indemnified party may continue to contest such claim and, in such event, the total maximum liability of the indemnifying party to indemnify or otherwise reimburse the indemnified party hereunder with respect to such claim shall be limited to and shall not exceed the amount of such offer, plus reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees and disbursements) to the date of notice that the indemnifying party desires to accept such offer, provided that this sentence shall not apply to any settlement of any claim involving the imposition of equitable remedies or to any settlement imposing any material obligations on such indemnified party other than financial obligations for which such indemnified party will be indemnified hereunder. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim in any one jurisdiction, unless in the written opinion of counsel to the indemnified party, reasonably satisfactory to the indemnifying party, use of one counsel would be expected to give rise to a conflict of interest between such indemnified party and any other of such indemnified parties with respect to such claim, in which even the indemnifying party shall be obligated to pay the fees and expenses of each additional counsel.

(iv) Other Indemnification . Indemnification similar to that specified in this Section 5(g) (with appropriate modifications) shall be given by the Company and each selling Holder with respect to any required registration or other qualification of securities under Federal or state law or regulation of governmental authority other than the Securities Act.

(v) Contribution . If for any reason the indemnification provided for in the preceding clauses g(i) and g(ii) is unavailable to an indemnified party or insufficient to hold it harmless as contemplated by the preceding clauses g(i) and g(ii), then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations, provided that no selling Holder shall be required to contribute in an amount greater than the dollar amount of the proceeds received by such selling Holder with respect to the sale of any securities under this Section 5. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

(h) Certain Definitions . For purposes of this Section 5:

(i) “ Registrable Securities ” shall mean (i) shares of Common Stock and any security issued or distributed in respect thereof; provided , that any Registrable Securities shall cease to be Registrable Securities when (A) a registration statement with respect to the sale of such Registrable

 

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Securities has been declared effective under the Securities Act and such Registrable Securities have been disposed of in accordance with the plan of distribution set forth in such registration statement, (B) such Registrable Securities have been disposed of in reliance upon Rule 144 (or any similar provision then in force) under the Securities Act or (C) such Registrable Securities shall have been otherwise transferred and new certificates for them not bearing a legend restricting further transfer under the Securities Act shall have been delivered by the Company; and provided, further, that any securities that have ceased to be Registrable Securities shall not thereafter become Registrable Securities and any security that is issued or distributed in respect of securities that have ceased to be Registrable Securities is not a Registrable Security and (ii) any shares of Common Stock required to be registered by the Company on behalf of any other Person possessing registration rights pursuant to another agreement in which the Company had granted such rights.

(ii) “ Underwritten Offering ” means a sale of shares of Common Stock to an underwriter for reoffering to the public.

Additional MIRA Definitions (any defined terms used in these Sections 4 and 5 of the MIRA but not otherwise defined therein or below have substantially the same meaning given to such terms in this Agreement)

Apollo Group ” means Domus Investment Holdings, LLC, RCIV Cayman and RCIV Luxco and AIF IV, collectively with each of their respective affiliates (including, for avoidance of debt, any syndication vehicles) to which any transfers of Common Stock are made.

Holders ” means the holders of securities of the Company who are parties to the MIRA.

Management Holder ” means Holders who are employed by, or serve as consultants or directors to, the Company or any of its subsidiaries.

Public Sale ” means any sale, occurring simultaneously with or after an initial public offering, of Common Stock to the public pursuant to an offering registered under the Securities Act or to the public in the manner described by the provisions of Rule 144 promulgated thereunder, other than an offering relating to employee incentive plans.

Qualified Public Offering ” means (a) an Underwritten Offering of shares of Class A Common Stock by the Company or any selling securityholders pursuant to an effective registration statement filed by the Company with the SEC (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 Class A 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 $200 million and (b) the listing of Company Class A Common Stock on the NASDAQ Global Select Market, the NASDAQ Global Market, the New York Stock Exchange or any successor exchange to the foregoing.

 

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Exhibit 10.33

AMENDED AND RESTATED MANAGEMENT INVESTOR RIGHTS AGREEMENT dated as of January 5, 2011 (this “ Agreement ”), among Domus Holdings Corp., a Delaware corporation (the “ Company ”), the Apollo Holders (as such term is hereinafter defined) and the Holders that are parties hereto.

WHEREAS, each Holder deems it to be in the best interest of the Company, the Apollo Holders and the Holders that provision be made for the continuity and stability of the business and policies of the Company, and, to that end, the Company, the Apollo Holders and the Holders hereby set forth herein their agreement with respect to the Common Stock and Options now owned or hereafter owned by them.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and obligations hereinafter set forth, the parties hereto hereby agree as follows:

Section 1. Definitions .

As used in this Agreement:

Affiliate ” means:

(a) in the case of the Company or a Holder 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 V, L.P., Apollo Management VI, L.P., and Apollo Management VII, L.P. or any their 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.

AIF VI ” means Apollo Investment Fund VI, L.P., a Delaware limited partnership.


Apollo Group ” means Domus Investment, AIF VI, RCIV Cayman and RCIV Luxco, collectively with each of their respective affiliates (including, for avoidance of doubt, any syndication vehicles) to which any transfers of Common Stock are made.

Apollo Holder ” means, collectively, Domus Investment, AIF VI, RCIV Cayman and RCIV Luxco.

Asset Sale ” means any sale of assets of the Company, including the sale of all or substantially all of the assets of the Company and its subsidiaries on a consolidated basis.

Award ” has the meaning ascribed to such term in the Stock Incentive Plan.

Bankruptcy Event ” means with respect to any Management Holder (i) such holder shall voluntarily be adjudicated as bankrupt or insolvent; (ii) such holder shall consent to or not contest the appointment of a receiver or trustee for himself, herself or itself or for all or any part of his, her or its property; (iii) such holder shall file a petition seeking relief under the bankruptcy, rearrangement, reorganization or other debtor relief laws of the United States or any state or any other competent jurisdiction (including foreign jurisdictions); (iv) such holder shall make a general assignment for the benefit of his, her or its creditors; (v) a petition shall have been filed against such Holder seeking relief under the bankruptcy, rearrangement, reorganization or other debtor relief laws of the United States or any state or other competent jurisdiction (including foreign jurisdictions); or (vi) a court of competent jurisdiction shall have entered an order, judgment or decree appointing a receiver or trustee for such Holder, or for any part of his, her or its property, and such petition, order, judgment or decree shall not be and remain discharged or stayed within a period of sixty (60) days after its entry.

Board ” means the Board of Directors of the Company and any duly authorized committee thereof. All determinations by the Board required pursuant to the terms of this Agreement to be made by the Board shall be binding and conclusive.

Cause ” has the meaning ascribed to such term in the Stock Incentive Plan.

Closing Date ” means the date of the closing of the Exchange Transactions.

Cl ass A Common Stock ” means the Class A common stock of the Company, par value $.01 per share.

Cl ass B Common Stock ” means the Class B common stock of the Company, par value $.01 per share.

Come-Along Option ” has the meaning ascribed to such term in Section 2(b)(i).

Come-Along Shares ” has the meaning ascribed to such term in Section 2(b)(ii).

 

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Common Stock ” means the Class A Common Stock, and the Class B Common Stock, collectively, and any class of common stock into which the Class A Common Stock or Class B Common Stock may be reclassified, converted or exchanged.

Company ” has the meaning ascribed to such term in the introductory paragraph hereof.

Confidential Information ” has the meaning ascribed to such term in Annex I.

Control Disposition ” means a Disposition which would have the effect of transferring to a Person or Group that is not an Affiliate or a portfolio company of the Apollo Holder or a portfolio company of any Affiliate of the Apollo Holder, a number of shares of Common Stock such that, following the consummation of such Disposition, such Person or Group possesses the voting power to elect a majority of the Board (whether by merger, consolidation or sale or transfer of Common Stock) or the board of directors (or similar body) of any successor entity.

Convertible Notes ” means 11.00% Series A Convertible Notes due 2018, 11.00% Series B Convertible Notes due 2018, and 11.00% Series C Convertible Notes due 2018 issued by Realogy.

Deemed Held Shares ” has the meaning ascribed to such term in Section 2(a)(ii).

Disability ” has the meaning ascribed to such term in the Stock Incentive Plan.

Disposition ” means any direct or indirect transfer, assignment, sale, gift, pledge, hypothecation or other encumbrance, or any other disposition, of Common Stock (or any interest therein or right thereto) or of all or part of the voting power (other than the granting of a revocable proxy) associated with the Common Stock (or any interest therein) whatsoever, or any other transfer of beneficial ownership of Common Stock whether voluntary or involuntary, including, without limitation (a) as a part of any liquidation of a Management Holder’s assets or (b) as a part of any reorganization of a Management Holder pursuant to the United States, state, foreign or other bankruptcy law or other similar debtor relief laws.

Domus Investment ” means Domus Investment Holdings, LLC, a Delaware limited liability company.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

Exchange Transactions ” means the exchange of the Existing Notes for the New Notes.

Existing Notes ” means the 10.50% Senior Notes due 2014, 11.00%/11.75% Senior Toggle Notes due 2014, and 12.375% Senior Subordinated Notes due 2015 issued by Realogy.

Extended Maturity Notes ” means the new 11.50% Senior Cash Notes due 2017, new 12.00% Senior Cash Notes due 2017, and new 13.375% Senior Subordinated Notes due 2018 issued by Realogy.

 

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Fair Market Value ” has the meaning ascribed to such term in the Stock Incentive Plan.

GAAP ” has the meaning ascribed to such term in the definition of “Indebtedness.”

Good Reason ” has the meaning ascribed to such term in the Stock Incentive Plan.

Group ” has the meaning ascribed to such term in Section 13(d)(3) of the Exchange Act.

Holders ” means the holders of securities of the Company who are parties thereto. “ Holder ” has a correlative meaning.

Indebtedness ” means with respect to any Person and without duplication, (a) all indebtedness of such Person for borrowed money, whether current or funded, or secured or unsecured, (b) all indebtedness of such Person for the deferred purchase price of property or services represented by a note, bond, debenture or similar instrument and any other obligation or liability represented by a note, bond, debenture or similar instrument, (c) all indebtedness of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (d) all indebtedness of such Person secured by a purchase money mortgage or other lien to secure all or part of the purchase price of the property subject to such mortgage or lien, (e) all obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under generally accepted accounting principles in the United States of America (“ GAAP ”) and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP, (f) all unpaid reimbursement obligations of such Person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such Person, (g) all obligations of such Person under any forward contract, futures contract, swap, option or other financing agreement or arrangement (including caps, floors, collars and similar agreements), the value of which is dependent upon interest rates, currency exchange rates, commodities or other indices, (h) all interest, fees and other expenses owed with respect to the indebtedness referred to above (and any prepayment penalties or fees or similar breakage costs or other fees and costs required to be paid in order for such Indebtedness to be satisfied and discharged in full), and (i) all indebtedness referred to above which is directly or indirectly guaranteed by such Person or which such Person has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a creditor against loss.

Initial Notice ” has the meaning ascribed to such term in Section 5(a).

Investor Securityholders Agreements ” means (i) the investor securityholders agreement by and among the Company, Realogy, Paulson & Co. Inc., Domus Co-Investment Holdings, LLC and the Apollo Holders, (ii) the investor securityholders agreement by and among the Company, Realogy, Avenue Capital Management II, L.P., Domus Co-Investment Holdings, LLC and the Apollo Holders and (iii) one or more investor securityholders agreements by and among

 

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the Company, Realogy, Domus Co-Investment Holdings, LLC, the Apollo Holders and the securityholders thereto who participated in the Exchange Transactions.

IRA ” has the meaning ascribed to such term in Section 3.2(c).

Management Holder ” means Holders who are employed by, or serve as consultants or directors to, the Company or any of its subsidiaries.

New Notes ” means the Extended Maturity Notes and the Convertible Notes.

Non-Compete Period ” has the meaning ascribed to such term in Annex I.

Offer ” has the meaning ascribed to such term in Section 3.1.

Offeror ” has the meaning ascribed to such term in Section 3.1.

Option ” means the options issued to Management Holders pursuant to the Stock Incentive Plan, as it is amended, supplemented, restated or otherwise modified from time to time, or any other option to purchase Common Stock issued by the Company.

Original Cost ” means the price per share paid by the Management Holder for its shares of Common Stock on the Original Issue Date, subject to appropriate adjustment by the Board for stock splits, stock dividends or other distributions, combinations and similar transactions.

Original Issue Date ” means with respect to any share of Common Stock issued to the Apollo Holder or a Management Holder, the date of issuance of such share of Common Stock to the Apollo Holder or such Management Holder, as applicable.

Person ” shall be construed broadly and shall include, without limitation, an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

Piggy-Back Notice ” has the meaning ascribed to such term in Section 5(a).

Piggy-Back Registration Right ” has the meaning ascribed to such term in Section 5.

Proportionate Percentage ” means, with respect to any Holder at the time of any Tag-Along Transaction, a fraction (expressed as a percentage) the numerator of which is the total number of shares of Common Stock held by such Holder as of such time (including any shares of Common Stock that such Holder purchases or intends to purchase pursuant to any Option exercised in connection with the Tag-Along Transaction and any shares distributed to such Holder pursuant to any deferred compensation plan in connection with the Tag-Along Transaction) and the denominator of which is the total number of shares of Common Stock outstanding at the time of determination on a fully diluted basis (including shares of Common Stock that any securityholder of the Company intends to purchase or acquire pursuant to any Option or any other convertible or exercisable security in connection with the Tag Along

 

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Transaction and any shares of Common Stock distributable to any securityholders of the Company pursuant to any deferred compensation plan in connection with the Tag-Along Transaction. For the avoidance of doubt, the Proportionate Percentage shall not include any Convertible Notes held by the Apollo Holders or any other Person, convertible at any time at the option of the holders thereof, in whole or in part into shares of Class A Common Stock

Proxy ” has the meaning ascribed to such term in Section 7(a).

Public Sale ” means any sale, occurring simultaneously with or after an initial public offering, of Common Stock to the public pursuant to an offering registered under the Securities Act or to the public in the manner described by the provisions of Rule 144 promulgated thereunder, other than an offering relating to employee incentive plans.

Purchase Price ” means: (i) in the case where a Management Holder is terminated by the Company for Cause, the lower of Original Cost or Fair Market Value and (ii) in all other cases, the Fair Market Value.

Put Request ” has the meaning ascribed to such term in Section 6(b).

Put Shares ” has the meaning ascribed to such term in Section 6(b).

Qualified Public Offering ” means (a) an Underwritten Offering of shares of Class A Common Stock by the Company or any selling securityholders pursuant to an effective Registration Statement filed by the Company with the SEC (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 Class A 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 $200 million and (b) the listing of Company Class A Common Stock on the NASDAQ Global Select Market, the NASDAQ Global Market, the New York Stock Exchange or any successor exchange to the foregoing.

RCIV Cayman ” means RCIV Holdings, L.P., a Cayman Islands exempted limited partnership.

RCIV Luxco ” means RCIV Holdings (Luxembourg) s.à.r.l., a Luxembourg société à responsabilité limitée.

Realogy ” means Realogy Corporation.

Registrable Securities ” has the meaning ascribed to such term in Section 5(h)(i).

Registration Request ” has the meaning ascribed to such term in Section 4(a).

 

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Registration Statement ” means any shelf registration statement or any other registration statement filed with the SEC with respect to the Common Stock.

Repurchase Event ” means, with respect to a Management Holder, such Management Holder shall cease to be employed by the Company or any of its subsidiaries for any reason (including upon death or Disability) or a Bankruptcy Event shall have occurred with respect to such Management Holder.

Required Voting Percentage ” means a majority of the shares of Common Stock outstanding owned by the Management Holders as of the date the vote is taken. For the avoidance of doubt, the proxy described in Section 7(a) shall not be applicable for the purpose of obtaining the Required Voting Percentage.

Restricted Stock ” has the meaning set forth in the Stock Incentive Plan.

Restricted Stock Unit ” has the meaning set forth in the Stock Incentive Plan.

Sale Notice ” has the meaning ascribed to such term in Section 2(a)(i).

Securities ” means, with respect to any Person, such Person’s “securities” as defined in Section 2(1) of the Securities Act and includes such Person’s capital stock or other equity interests or any options, warrants or other securities that are directly or indirectly convertible into, or exercisable or exchangeable for, such Person’s capital stock or other equity or equity-linked interests, including phantom stock and stock appreciation rights.

SEC ” means the Securities and Exchange Commission.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

Securityholders Agreement ” shall mean the amended and restated securityholders agreement, as amended, by and between the Apollo Holders and Domus Co-Investment Holdings, LLC.

Stock Incentive Plan ” means the Company’s 2007 Stock Incentive Plan, as it may be amended, supplemented, restated or otherwise modified from time to time.

Subject Employee ” has the meaning ascribed to such term in Section 3.2(c).

Tag-Along Holder ” has the meaning ascribed to such term in Section 2(a)(ii).

Tag-Along Notice ” has the meaning ascribed to such term in Section 2(a)(ii).

Tag-Along Transaction ” has the meaning ascribed to such term in Section 2(a)(i).

Term ” has the meaning ascribed to such term in Section 7(a).

 

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Underwritten Offering ” has the meaning ascribed to such term in Section. 5(h)(ii).

Work Product ” has the meaning ascribed to such term in Annex I.

Section 2. Certain Dispositions .

(a) Tag-Along Transaction .

(i) Subject to the provisions of Section 2(b), prior to the consummation of a Qualified Public Offering, if the Apollo Group desires to effect any sale or transfer of greater than 5% of its shares of Common Stock in one transaction or series of related transactions for value within any six (6) month period to any third party that is not an Affiliate of the Apollo Group, other than in a Public Sale and other than a Come-Along Option transaction (a “ Tag-Along Transaction ”), it shall give written notice to the Management Holders offering such Management Holders the option to participate in such Tag-Along Transaction (a “ Sale Notice ”). The Sale Notice shall set forth in reasonable detail the material terms and conditions of the proposed Tag-Along Transaction and identify the contemplated transferee or Group.

(ii) Each of the Management Holders may, by written notice to the Apollo Holder (a “ Tag-Along Notice ”) delivered within ten (10) days after the date of the Sale Notice (each such Management Holder delivering such timely notice being a “ Tag-Along Holder ”), elect to sell in such Tag-Along Transaction all or a portion of the shares of Common Stock held by such Management Holder on the same terms and conditions as the Apollo Holders, provided that, the number of shares of Common Stock to be sold by such Management Holder will not exceed (as a percentage of the total number of shares, including Deemed Held Shares (as defined below), then held by such Management Holder) the total number of shares of Common Stock that the Apollo Group proposes to sell or transfer in the applicable Tag Along Transaction (as a percentage of the total number of shares then held by the Apollo Group). The shares of Common Stock to be sold by a Tag-Along Holder in a Tag Along Transaction may include Deemed Held Shares. “ Deemed Held Shares ” means shares of Common Stock (x) which a Holder may obtain by exercising any Options held by such Holder that are vested and exercisable as of the relevant measurement date or which would vest and become exercisable in connection with the applicable transaction or (y) to be distributed to such Holder in connection with the applicable transaction from any deferred compensation plan.

(iii) If none of the Management Holders delivers a timely Tag-Along Notice, then the Apollo Group may thereafter consummate the Tag-Along Transaction, at the same sale price and on substantially the same other terms and conditions as are described in the Sale Notice (including, without limitation, the number of shares of Common Stock being sold), for a period of one hundred twenty (120) days thereafter (subject to extension in the event of required regulatory approvals not having been obtained by such date but in any event no later than two hundred seventy (270) days after receipt of the Tag-Along Notice). In the event the Apollo Group has not consummated the Tag-Along Transaction within such one hundred twenty (120) day period (subject to extension as provided above), the Apollo Group shall not thereafter consummate a Tag-Along Transaction, without first providing a Sale Notice and an opportunity to the Management Holders to sell in the manner provided above. If one or more of the Management Holders gives the

 

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Apollo Group a timely Tag-Along Notice, then the Apollo Group shall use reasonable efforts to cause the prospective transferee or Group to agree to acquire all of the shares of Common Stock identified in all timely Tag-Along Notices, upon the same terms and conditions as are applicable to the shares of Common Stock held by the Apollo Group. If such prospective transferee or Group is unable or unwilling to acquire all shares of Common Stock proposed to be included in the Tag-Along Transaction upon such terms, then the Apollo Group may elect either to cancel such Tag-Along Transaction or to allocate the maximum number of shares that such prospective transferee or Group is willing to purchase among the Apollo Group and the Tag-Along Holders in the proportion that the Apollo Group’s and each such Tag-Along Holder’s Proportionate Percentage bears to the total Proportionate Percentages of the Apollo Group and the Tag-Along Holders. In connection with the Tag-Along Transaction, each Tag-Along Holder shall bear a pro rata portion of the total costs incurred by the Apollo Group in connection with such Tag-Along Transaction based on the number of shares of Common Stock sold in such Tag-Along Transaction, and shall take the actions referred to in the second sentence of Section 2(b)(ii) (as such actions would relate to a Tag-Along Transaction).

(iv) For purposes of this Section 2(a), any holder of shares of Common Stock who has a contractual right (other than, for the avoidance of doubt, pursuant to this Agreement) to participate in such Tag-Along Transaction or any other holder of Common Stock who is otherwise participating in such Tag-Along Transaction with the consent of the Apollo Holder, shall be deemed to be a “ Tag-Along Holder ” under this Section 2(a) (provided that, for the avoidance of doubt, this Section 2(a)(iv) is not intended to nor shall it grant any rights to any Person to participate in any Tag-Along Transaction that is not otherwise granted pursuant to Section 2(a)(i)-(iii) above).

(b) Come-Along Option .

(i) If the Apollo Group desires to effect a Tag-Along Transaction or any Control Disposition, then in lieu of complying with the requirements of Section 2(a), the Apollo Group, at its option (the “ Come-Along Option ”), may require all Management Holders to sell the same percentage of their respective shares of Common Stock (including their Deemed Held Shares) as the Apollo Group desires to sell (of its Common Stock) to the transferee or Group selected by the Apollo Group, at the same price per share and on the same terms and conditions as apply to those sold by the Apollo Group.

(ii) Each Management Holder shall consent to and raise no objections against the Come-Along Option, and if the Come-Along Option is structured as (a) a merger or consolidation of the Company or an Asset Sale, each Management Holder shall vote all shares of Common Stock held by such Management Holder in favor of such merger, consolidation or Asset Sale and waive any dissenters rights, appraisal rights or similar rights in connection with such merger, consolidation or Asset Sale, or (b) a sale of all the capital stock of the Company, the Management Holders shall agree to sell all of their respective shares of Common Stock which are the subject of the Come-Along Option (including their Deemed Held Shares) (the “ Come-Along Shares ”).

 

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(iii) The Management Holders shall take all necessary and desirable actions reasonably requested by the Apollo Group in connection with the consummation of the Come-Along Option, including obtaining Board consent to the Come-Along Option and the execution of such agreements and such instruments and the taking of such other actions as are reasonably necessary to provide customary representations, warranties and indemnities regarding title, as well as escrow arrangements relating to such Come-Along Option; provided, however, that any indemnification obligations under such agreements applicable to any Management Holder (other than with respect to such Management Holder’s representations and warranties regarding title to the Come-Along Shares) shall be applicable (A) in the case of a transaction structured as a merger or consolidation of the Company or Asset Sale, to all security holders of the Company and (B) in the case of a transaction structured as a sale of the capital stock of the Company, to all security holders of the Company selling securities in such transaction, in each case set forth in (A) and (B), on a pro rata basis, determined by reference to the aggregate amount of Come-Along Shares subject to the transaction, but in no event shall a Management Holder be liable for more than the total proceeds received by such Management Holder in the transaction giving rise to the Come-Along Option. It is understood and agreed that the Apollo Group may exercise more than one Come-Along Option.

(iv) The Company and each Management Holder shall cooperate in causing any Deemed Held Shares of such Management Holder that are ultimately included in a Come-Along Option or Tag-Along Transaction to be delivered to the Management Holder immediately prior to the closing of such Come-Along Option or Tag-Along Transaction in order that the Management Holder may exercise his rights under Section 2(a) or that the Apollo Group may exercise its rights under Section 2(b), as the case may be.

(v) Upon the closing of the sale of any shares of Common Stock (including any Deemed Held Shares) pursuant to this Section 2, the Holders shall deliver at such closing, against payment of the purchase price therefor, certificates representing their shares of Common Stock to be sold, duly endorsed for transfer or accompanied by duly endorsed stock powers, and evidence of the absence of liens, encumbrances and adverse claims with respect thereto and of such other matters as are deemed necessary by the Company for the proper transfer of such shares on the books of the Company.

Section 3. Transfers; Additional Parties .

3.1 Restrictions; Permitted Dispositions .

Without the consent of the Company, no Management Holder shall make any Disposition, directly or indirectly, through an Affiliate or otherwise. The preceding sentence shall apply with respect to all shares of Common Stock held at any time by a Management Holder (including without limitation, all Awards and all shares of Common Stock that may be acquired or received upon the exercise or settlement of any Award or upon a distribution pursuant to any deferred compensation plan), regardless of the manner in which such Management Holder initially acquired such shares of Common Stock. Notwithstanding the foregoing, the following Dispositions by a Management Holder shall be permitted at any time:

(a) dispositions pursuant to Section 5 (Piggy-back Rights);

 

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(b) any Disposition after a Qualified Public Offering;

(c) to: (i) a guardian of the estate of such Management Holder, (ii) an inter-vivos trust primarily for the benefit of such Management Holder; (iii) an inter-vivos trust whose primary beneficiary is one or more of such Management Holder’s lineal descendants (including lineal descendants by adoption); or (iv) the spouse of such Management Holder during marriage and not incident to divorce;

(d) to any individual Management Holder by: (i) a guardian of the estate of such Management Holder; (ii) an inter-vivos trust whose primary beneficiary is such Management Holder or one or more of such Management Holder’s lineal descendants (including lineal descendants by adoption); (iii) the spouse of such Management Holder during marriage and not incident to divorce; or (iv) such Management Holder’s lineal descendants;

(e) with the consent of the Company, by any Management Holder to a qualified retirement plan sponsored by the Management Holder (including with respect to a qualified retirement plan referred to in this paragraph 3.1(e), to participants, alternate payees and beneficiaries to the extent required by law and the provisions of such plan);

(f) to a trust, to any successor trust or successor trustee established for the exclusive benefit of a Management Holder or any other Person referred to in clauses (c) or (d) above; and

(g) any Disposition permitted pursuant to Section 2(a) or required pursuant to Section 2(b); and

(h) with the consent of the Company, by any Management Holder to other Persons for tax planning purposes;

provided, in each case that such Disposition complies with the terms of this Agreement and applicable securities laws, rules and regulations in effect at the time of the Disposition.

In the event of any transaction by a Management Holder involving a change of ownership interest or voting power of a Management Holder not specifically permitted by (a) through (h) of this Section, such transaction shall be deemed a Disposition by such Management Holder and an irrevocable “ Offer ”. Such Management Holder (“ Offeror ”) shall promptly notify the Company of such event and offer (the “ Offer ”), by written notice to the Company, to sell all securities subject to the Offer to the Company and/or the Apollo Group for the Fair Market Value. Offers under this Section 3.1 shall (a) be in writing; (b) be irrevocable for so long as the Company or the Apollo Holder has the right to purchase any securities subject to the Offer; (c) be sent by the Offeror to the Company and the Apollo Group; and (d) contain a description of the proposed transaction and change of ownership interest or voting power. The date of such Offer shall be deemed to be the date such written notice of the Offer is so delivered to the Company and the Apollo Holder or, if no such written notice is delivered to the Company and the Apollo Holder by the Management Holder, within five (5) business days from the Company’s receipt of evidence, satisfactory to it, of such a Disposition by the Offeror. In such event, the Company

 

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and the Apollo Group shall have the right to repurchase all shares of securities subject to the Offer in accordance with the procedures set forth in Section 6, mutatis mutandis .

3.2 Additional Parties .

(a) As a condition to the Company’s obligation to effect a transfer of shares of Common Stock permitted by this Agreement on the books and records of the Company (other than a transfer to the Apollo Group or of any of the Apollo Group’s Affiliates, the Company or any subsidiary of the Company), the transferee shall be required to become a party to this Agreement by executing (together with such Person’s spouse, if applicable) an Adoption Agreement in substantially the form of Exhibit A or in such other form that is reasonably satisfactory to the Company.

(b) In the event that any Person acquires shares of Common Stock, other than in connection with a Public Sale, from (i) a Management Holder or any Affiliate or member of such Management Holder’s Group or (ii) any direct or indirect transferee of a Management Holder, such Person shall be subject to any and all obligations and restrictions of such Management Holder hereunder (other than the provisions of Section 8), as if such Person was such Management Holder named herein. Additionally, other than in connection with a Public Sale, whenever a Management Holder makes a transfer of shares of Common Stock, such shares of Common Stock shall contain a legend so as to inform any transferee that such shares of Common Stock were held originally by a Management Holder and are subject to repurchase pursuant to Section 6 below based on the employment of or events relating to such Management Holder. Such legend shall not be placed on any shares of Common Stock acquired from a Management Holder by the Company, the Apollo Group or any of its Affiliates.

(c) If applicable, any shares of Common Stock acquired by an individual retirement account (“ IRA ”) on behalf of an employee of the Company or any of its subsidiaries (the “ Subject Employee ”) shall be deemed to be held by a Management Holder. Additionally, such Subject Employee shall be deemed to be a Management Holder and his or her IRA shall be deemed to have acquired all shares of Common Stock it holds from such Subject Employee pursuant to a transfer that is subject to Section 3.2(b) above.

3.3 Securities Restrictions; Legends .

(a) No shares of Common Stock shall be transferable except upon the conditions specified in this Section 3.3, which conditions are intended to insure compliance with the provisions of the Securities Act.

(b) Each certificate representing shares of Common Stock shall (unless otherwise permitted by the provisions of paragraph (d) below) be stamped or otherwise imprinted with a legend in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF

 

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1933, AS AMENDED, OR ANY STATE SECURITIES OR BLUE SKY LAWS. THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO A MANAGEMENT INVESTOR RIGHTS AGREEMENT, AS AMENDED, DATED AS OF APRIL 10, 2007 AMONG THE ISSUER OF SUCH SECURITIES (THE “ COMPANY ”), AND THE OTHER PARTIES NAMED THEREIN. THE TERMS OF SUCH MANAGEMENT INVESTOR RIGHTS AGREEMENT INCLUDE, AMONG OTHER THINGS, RESTRICTIONS ON TRANSFER. A COPY OF SUCH AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”

(c) The holder of any shares of Common Stock by acceptance thereof agrees, prior to any transfer of any such shares, to give written notice to the Company of such holder’s intention to effect such transfer and to comply in all other respects with the provisions of this Section 3.3. Each such notice shall describe the manner and circumstances of the proposed transfer. Upon request by the Company, the holder delivering such notice shall deliver a written opinion, addressed to the Company, of counsel for the holder of such shares, stating that in the opinion of such counsel (which opinion and counsel shall be reasonably satisfactory to the Company) such proposed transfer does not involve a transaction requiring registration or qualification of such shares under the Securities Act. Such holder of such shares shall be entitled to transfer such shares in accordance with the terms of the notice delivered to the Company, if the Company does not reasonably object to such transfer and request such opinion within fifteen (15) days after delivery of such notice, or, if it requests such opinion, does not reasonably object to such transfer within fifteen (15) days after delivery of such opinion. Each certificate or other instrument evidencing any such transferred shares of Common Stock shall bear the legend set forth in paragraph (b) above unless (i) such opinion of counsel to the holder of such shares (which opinion and counsel shall be reasonably acceptable to the Company) states that registration of any future transfer is not required by the applicable provisions of the Securities Act or (ii) the Company shall have waived the requirement of such legends.

(d) Notwithstanding the foregoing provisions of this Section 3.3, the restrictions imposed by this Section 3.3 upon the transferability of any shares of Common Stock shall cease and terminate when (i) any such shares are sold or otherwise disposed of pursuant to an effective registration statement under the Securities Act, or (ii) after a Qualified Public Offering, the holder of such shares has met the requirements for transfer of such shares pursuant to Rule 144 under the Securities Act. Whenever the restrictions imposed by this Section 3.3 shall terminate, the holder of any shares as to which such restrictions have terminated shall be entitled to receive from the Company, without expense, a new certificate not bearing the restrictive legend set forth in paragraph (b) above and not containing any other reference to the restrictions imposed by this Section 3.3.

 

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(e) Improper Dispositions . Any Disposition or attempted Disposition in breach of this Agreement shall be void ab initio and of no effect. In connection with any attempted Disposition in breach of this Agreement, the Company may hold and refuse to transfer any Common Stock or any certificate therefor, in addition to and without prejudice to any and all other rights or remedies which may be available to it or the Holders.

Section 4. Demand Registration Rights .

(a) Subject to the provisions of this Section 4, at any time and from time to time after the date hereof, the Apollo Group may make one or more written requests (each, a “ Registration Request ”) to the Company for registration under and in accordance with the provisions of the Securities Act of all or part of their shares of Common Stock.

(b) All Registration Requests made pursuant to this Section 4 will specify the aggregate amount of shares of Common Stock to be registered and will also specify the intended methods of disposition thereof. Subject to Section 4(c), promptly upon receipt of any such Registration Request, the Company will use its reasonable best efforts to effect such registration under the Securities Act (including, without limitation, filing post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with the applicable regulations promulgated under the Securities Act) of the shares of Common Stock which the Company has been so requested to register within 180 days of such request (or within 120 days of such request in the case of a Registration Request after a Qualified Public Offering (subject to any lock-up restrictions)).

(c) If the Company receives a Registration Request and the Company furnishes to the Apollo Group a copy of a resolution of the Board certified by the secretary of the Company stating that in the good faith judgment of the Board it would be materially adverse to the Company for a Registration Statement to be filed on or before the date such filing would otherwise be required hereunder, the Company shall have the right to defer such filing for a period of not more than ninety (90) days after the date such filing would otherwise be required hereunder. The Company shall not be permitted to take such action more than once in any 360-day period. If the Company shall so postpone the filing of a Registration Statement, the Apollo Group may withdraw its Registration Request by so advising the Company in writing within thirty (30) days after receipt of the notice of postponement. In addition, if the Company receives a Registration Request and the Company is then in the process of preparing to engage in a Public Sale, the Company shall inform the Apollo Group of the Company’s intent to engage in a Public Sale and may require the Apollo Group to withdraw such Registration Request for a period of up to 120 days so that the Company may complete its Public Sale. In the event that the Company ceases to pursue such Public Sale, it shall promptly inform the Apollo Group and the Apollo Group shall be permitted to submit a new Registration Request. The foregoing shall be without prejudice to any rights of the Apollo Group pursuant to Section 5.

(d) Registrations under this Section 4 shall be on such appropriate registration form of the Securities and Exchange Commission (i) as shall be selected by the Company and as shall be reasonably acceptable to the Apollo Group and (ii) as shall permit the disposition of such Common Stock in accordance with the intended method or methods of disposition specified in

 

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the Registration Request. If, in connection with any registration under this Section 4 which is proposed by the Company to be on Form S-3 or any successor form, the managing underwriter, if any, shall advise the Company in writing that in its opinion the use of another permitted form is of material importance to the success of the offering, then such registration shall be on such other permitted form.

(e) The Company shall use its best efforts to keep any Registration Statement filed in response to a Registration Request effective for as long as is necessary for the Apollo Group to dispose of the covered securities.

(f) In the case of a Registration Request that involves an Underwritten Offering, the Apollo Group shall select the underwriters, provided such selection is reasonably acceptable to the Company.

Section 5. Piggy-Back Registration Rights .

(a) Participation . Subject to Section 5(b), if upon or at any time after the consummation of a Qualified Public Offering (or prior to the consummation of a Qualified Public Offering with the Company’s consent), the Company files a Registration Statement (i) in connection with the exercise of any demand rights by the Apollo Group or any other Holder or Holders possessing such rights, or (ii) in connection with which the Apollo Group exercises piggy-back registration rights (other than a registration on Form S-4 or S-8 or any successor form to such Forms or any registration of securities as it relates to an offering and sale to management of the Company pursuant to any employee stock plan or other employee benefit plan arrangement) with respect to an offering that includes any shares of Common Stock, then the Company shall give prompt notice (the “ Initial Notice ”) to the Management Holders and the Management Holders shall be entitled to include in such Registration Statement the Registrable Securities (as defined in Section 5(h)) held by them. If the Management Holders elect to include any or all of their Registrable Securities in such Registration Statement, then the Company shall give prompt notice (the “ Piggy-Back Notice ”) to each Holder (excluding the Management Holders) and each such Holder shall be entitled to include in such Registration Statement the Registrable Securities held by it. The Initial Notice and Piggy-Back Notice shall offer the Management Holders and the Holders, respectively, the right, subject to Section 5(b) (the “ Piggy-Back Registration Right ”), to register such number of shares of Registrable Securities as each Management Holder and each Holder may request and shall set forth (i) the anticipated filing date of such Registration Statement and (ii) the number of shares of Common Stock that is proposed to be included in such Registration Statement. Subject to Section 5(b), the Company shall include in such Registration Statement such shares of Registrable Securities for which it has received written requests to register such shares within fifteen (15) days after the Initial Notice and seven (7) days after the Piggy-Back Notice has been given. A Management Holder may exercise Piggy-Back Registration Rights with respect to a Qualified Public Offering or any subsequent Public Offering.

(b) Underwriters’ Cutback . Notwithstanding the foregoing, if a registration pursuant to Section 4 or Section 5 involves an Underwritten Offering (as defined in Section 5(h)(ii)) and the managing underwriter or underwriters of such proposed Underwritten Offering

 

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advises the Company that the total or kind of securities which such Holders and any other persons or entities intend to include in such offering would be reasonably likely to adversely affect the price, timing or distribution of the securities offered in such offering, then the number of securities proposed to be included in such registration shall be allocated among the Company, the Apollo Group, and all of the selling Management Holders proportionately, such that the number of securities that each such Person shall be entitled to sell in the Underwritten Offering (other than the initial Underwritten Offering) shall be included in the following order:

(i) In the event of an exercise of any demand rights by the Apollo Group or any other Holder or Holders possessing such rights:

(1) first, the Registrable Securities held by the Person exercising a demand right pursuant to Section 4 or pursuant to any other agreement in which the Company has granted demand rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person in connection with such registration;

(2) second, the Registrable Securities held by the Persons requesting their Registrable Securities to be included in such registration pursuant to the terms of Section 5 or pursuant to any other agreement in which the Company has granted piggy-back registration rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person at the time of such registration; and

(3) third, the securities to be issued and sold by the Company in such registration.

(ii) In all other cases:

(1) first, the securities to be issued and sold by the Company in such registration; and

(2) second, the Registrable Securities held by the Persons requesting their Registrable Securities be included in such registration pursuant to the terms of this Section 5 or pursuant to any other agreement in which the Company has granted piggy-back registration rights, pro rata based upon the number of Registrable Securities proposed to be included by each such Person at the time of such registration.

Notwithstanding anything to the contrary set forth in this Section 5(b), if the managing underwriter for the initial Underwritten Offering advises the Company that the inclusion of the number of shares of Common Stock proposed to be included in any registration by any particular Management Holder would interfere with the successful marketing (including pricing) of such shares to be offered thereby, then the number of such shares proposed to be included in such registration by such Management Holder shall be reduced to the lower of the number of such shares that the managing underwriter advises that such Holder may sell in the Underwritten Offering and the number of such shares calculated pursuant to the foregoing.

(c) Lock-up . If the Company at any time shall register shares of Common Stock under the Securities Act for sale to the public, no Management Holder shall sell publicly,

 

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make any short sale of, grant any option for the purchase of, or otherwise dispose publicly of, any capital stock of the Company without the prior written consent of the Company, for the period of time in which the Apollo Group has similarly agreed not to sell publicly, make any short sale of, grant any option for the purchase of, or otherwise dispose publicly of, any capital stock of the Company. In addition, if requested by the managing underwriter(s), in connection with the initial Public Offering, all Holders shall enter into a customary lock-up agreement with the managing underwriter(s) for such period as may be required by the managing underwriter(s), subject to customary exceptions in the Company’s discretion.

(d) Company Control . The Company may decline to file a Registration Statement after giving the Initial Notice or the Piggy-Back Notice, or withdraw a Registration Statement after filing and after such Piggy-Back Notice, but prior to the effectiveness of the Registration Statement, provided that the Company shall promptly notify each Holder in writing of any such action and provided further that the Company shall bear all reasonable expenses incurred by such Holder or otherwise in connection with such withdrawn Registration Statement. Except as provided in Section 4(f), notwithstanding any other provision herein, the Company shall have sole discretion to select any and all underwriters that may participate in any Underwritten Offering.

(e) Participation in Underwritten Offerings . No Person may participate in any Underwritten Offering hereunder unless such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Persons entitled to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements, lock-ups and other documents required for such underwriting arrangements. Nothing in this Section 5(e) shall be construed to create any additional rights regarding the piggy-back registration of Registrable Securities in any Person otherwise than as set forth herein.

(f) Expenses . The Company will pay all registration fees and other reasonable expenses in connection with each registration of Registrable Securities requested pursuant to this Section 5; provided, that each Holder shall pay all applicable underwriting fees, discounts and similar charges (pro rata based on the securities sold) and that all Holders as a group shall be entitled to a single counsel (at the Company’s expense) to be selected by the Apollo Group.

(g) Indemnification .

(i) Indemnification by the Company . The Company agrees to indemnify and hold harmless, to the full extent permitted by law, each selling Holder, its officers, directors, employees and representatives and each Person who controls (within the meaning of the Securities Act) such selling Holder against any losses, claims, damages, liabilities and expenses caused by any untrue or alleged untrue statement of a material fact contained in any Registration Statement, prospectus or preliminary prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement therein not misleading, except insofar as the same may be caused by or contained in any information furnished in writing to the Company by such selling Holder for use therein; provided, however, that the Company shall not be

 

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liable in any such case to the extent that any such loss, claim, damage, liability or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any such preliminary prospectus if (A) such selling Holder failed to deliver or cause to be delivered a copy of the prospectus to the Person asserting such loss, claim, damage, liability or expense after the Company has furnished such selling Holder with a sufficient number of copies of the same and (B) the prospectus completely corrected in a timely manner such untrue statement or omission; and provided, further, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission in the prospectus, if such untrue statement or alleged untrue statement, omission or alleged omission is completely corrected in an amendment or supplement to the prospectus and the selling Holder thereafter fails to deliver such prospectus as so amended or supplemented prior to or concurrently with the sale of the securities to the Person asserting such loss, claim, damage, liability or expense after the Company had furnished such selling Holder with a sufficient number of copies of the same. The Company will also indemnify underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, their officers and directors and each Person who controls such Persons (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the selling Holder, if requested.

(ii) Indemnification by Selling Holders . Each selling Holder agrees to indemnify and hold harmless, to the full extent permitted by law, the Company, its directors, officers, employees and representatives and each Person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages or liabilities and expenses caused by any untrue or alleged untrue statement of a material fact contained in any Registration Statement or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such selling Holder to the Company for inclusion in such Registration Statement, prospectus or preliminary prospectus and has not been corrected in a subsequent writing prior to or concurrently with the sale of the securities to the Person asserting such loss, claim, damage, liability or expense. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the proceeds received by such selling Holder upon the sale of the securities giving rise to such indemnification obligation. The Company and the selling Holders shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above with respect to information so furnished in writing by such Persons for inclusion in any prospectus or Registration Statement.

(iii) Conduct of Indemnification Proceedings . Any Person entitled to indemnification hereunder will (i) give prompt (but in any event within 30 days after such Person has actual knowledge of the facts constituting the basis for indemnification) written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any delay or failure to so notify the indemnifying party shall relieve the indemnifying party of its obligations hereunder only to the extent, if at all, that the indemnifying party is actually prejudiced by reason of such delay or failure; provided, further,

 

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however, that any Person entitled to indemnification hereunder shall have the right to select and employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (a) the indemnifying party has agreed in writing to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim within a reasonable time after receipt of notice of such claim from the Person entitled to indemnification hereunder and employ counsel reasonably satisfactory to such Person or (c) in the reasonable judgment of any such Person, based upon advice of counsel, a conflict of interest may exist between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person). If such defense is not assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld), provided that an indemnified party shall not be required to consent to any settlement involving the imposition of equitable remedies or involving the imposition of any material obligations on such indemnified party other than financial obligations for which such indemnified party will be indemnified hereunder. No indemnifying party will be required to consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. Whenever the indemnified party or the indemnifying party receives a firm offer to settle a claim for which indemnification is sought hereunder, it shall promptly notify the other of such offer. If the indemnifying party refuses to accept such offer within 20 business days after receipt of such offer (or of notice thereof), such claim shall continue to be contested and, if such claim is within the scope of the indemnifying party’s indemnity contained herein, the indemnified party shall be indemnified pursuant to the terms hereof. If the indemnifying party notifies the indemnified party in writing that the indemnifying party desires to accept such offer, but the indemnified party refuses to accept such offer within 20 business days after receipt of such notice, the indemnified party may continue to contest such claim and, in such event, the total maximum liability of the indemnifying party to indemnify or otherwise reimburse the indemnified party hereunder with respect to such claim shall be limited to and shall not exceed the amount of such offer, plus reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees and disbursements) to the date of notice that the indemnifying party desires to accept such offer, provided that this sentence shall not apply to any settlement of any claim involving the imposition of equitable remedies or to any settlement imposing any material obligations on such indemnified party other than financial obligations for which such indemnified party will be indemnified hereunder. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim in any one jurisdiction, unless in the written opinion of counsel to the indemnified party, reasonably satisfactory to the indemnifying party, use of one counsel would be expected to give rise to a conflict of interest between such indemnified party and any other of such indemnified parties with respect to such claim, in which even the indemnifying party shall be obligated to pay the fees and expenses of each additional counsel.

(iv) Other Indemnification . Indemnification similar to that specified in this Section 5(g) (with appropriate modifications) shall be given by the Company and each selling

 

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Holder with respect to any required registration or other qualification of securities under Federal or state law or regulation of governmental authority other than the Securities Act.

(v) Contribution . If for any reason the indemnification provided for in the preceding clauses g(i) and g(ii) is unavailable to an indemnified party or insufficient to hold it harmless as contemplated by the preceding clauses g(i) and g(ii), then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations, provided that no selling Holder shall be required to contribute in an amount greater than the dollar amount of the proceeds received by such selling Holder with respect to the sale of any securities under this Section 5. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

(h) Certain Definitions . For purposes of this Section 5:

(i) “ Registrable Securities ” shall mean (i) shares of Common Stock and any security issued or distributed in respect thereof; provided , that any Registrable Securities shall cease to be Registrable Securities when (A) a registration statement with respect to the sale of such Registrable Securities has been declared effective under the Securities Act and such Registrable Securities have been disposed of in accordance with the plan of distribution set forth in such registration statement, (B) such Registrable Securities have been disposed of in reliance upon Rule 144 (or any similar provision then in force) under the Securities Act or (C) such Registrable Securities shall have been otherwise transferred and new certificates for them not bearing a legend restricting further transfer under the Securities Act shall have been delivered by the Company; and provided, further, that any securities that have ceased to be Registrable Securities shall not thereafter become Registrable Securities and any security that is issued or distributed in respect of securities that have ceased to be Registrable Securities is not a Registrable Security and (ii) any shares of Common Stock required to be registered by the Company on behalf of any other Person possessing registration rights pursuant to another agreement in which the Company had granted such rights.

Underwritten Offering ” means a sale of shares of Common Stock to an underwriter for reoffering to the public.

Section 6. Repurchase Rights .

(a) Company Repurchase Right . From and after a Repurchase Event with respect to any Management Holder, the Company and its subsidiaries shall have the right, but not the obligation, to repurchase all or any portion of the shares of Common Stock held by such Holder (including any Deemed Held Shares) in accordance with this Section 6, for the Purchase Price. The Company or any of its subsidiaries may exercise its right to purchase such shares of Common Stock until the date that is (i) six months after the Repurchase Event (with respect to shares of Common Stock held by such holder on such event), (ii) six months after the date all Options have been exercised by the applicable Management Holder or such Management

 

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Holder’s successors, assigns or representatives (with respect to shares of Common Stock acquired by exercise of such Options), and (iii) six months after the date all Awards of Restricted Stock Units have been settled and Restricted Shares have vested (with respect to shares of Common Stock received pursuant to such settlement or vesting) (such date, the “ Repurchase Date ”). To the extent necessary to comply with Section 409A of the Code, with respect to shares of Common Stock received by a Management Holder upon exercise of any Options, the provisions of this Section 6(a) shall cease to apply on the ten-year anniversary of the grant of such Options to such Management Holder. The determination date for purposes of determining the Fair Market Value shall be the closing date of the purchase of the applicable shares (which closing date shall not be later than the Repurchase Date unless so required by Section 6(d)).

(b) Management Holder Put Request . If, prior to the consummation of a Qualified Public Offering, a Management Holder dies or such Management Holder’s employment by the Company or, if applicable, a subsidiary thereof, is terminated as a result of a Disability, then such Management Holder or such Management Holder’s legal representative or trustee, as the case may be, shall have the right to request (but not, for the avoidance of doubt, require) (a “ Put Request ”) that the Company purchase all (but not less than all) of such Management Holder’s Common Stock (including any Deemed-Held Shares) (such shares on each particular Put Request date, the “ Put Shares ”) at Fair Market Value; provided that in no event shall a Put Request be made after the date which is ninety (90) days after the termination of such Management Holder’s employment with the Company or, if applicable, a subsidiary thereof. The Company shall consider in good faith any Put Request and use its reasonable efforts (taking into account, without limitation, the financial burden to the Company associated with purchasing the Put Shares, the Company’s available cash and other liquid assets and the restrictions contained in Section 6(e)), to purchase the Put Shares at Fair Market Value, provided that in no event shall the Company be obligated to purchase any Put Shares.

(c) The Apollo Group Repurchase Right . The Company or a subsidiary thereof shall give written notice to the Apollo Group stating whether the Company or any subsidiary will exercise such purchase rights pursuant to clause (a) above or upon an Offer pursuant to Section 3.1. If such notice states that the Company and its subsidiaries will not exercise their purchase rights for all or a portion of the shares of Common Stock then subject thereto, the Apollo Group shall have the right to purchase such shares of Common Stock not purchased by the Company or its subsidiaries on the same terms and conditions as the Company and its subsidiaries until the later of (i) the 30 th day following the receipt of such notice or (ii) the Repurchase Date (in the case of a repurchase pursuant to clause (a)(i) above).

(d) Closing . The closing date of any purchase of shares of Common Stock pursuant to this Section 6 shall take place on a date designated by the Company, one of its subsidiaries, or the Apollo Group, as applicable, in accordance with the applicable provisions of this Section 6; provided that the closing date will be deferred until such time as the applicable Management Holder has held the shares of Common Stock for a period of at least six months and one day. The Company, one of its subsidiaries, or the Apollo Group, as applicable, will pay for the shares of Common Stock purchased by it pursuant to this Section 6 by delivery of a check or wire transfer of funds, in exchange for the delivery by the Management Holder of the certificates representing such shares of Common Stock, duly endorsed for transfer to the Company, such

 

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subsidiary or the Apollo Group, as applicable. The Company shall have the right to record such purchase on its books and records without the consent of the Management Holder.

(e) Restrictions on Repurchase . Notwithstanding anything to the contrary contained in this Agreement, all purchases of shares of Common Stock by the Company shall be subject to applicable restrictions contained in federal, state or non-U.S. law and in the Company’s and its respective subsidiaries’ agreements evidencing the Company’s Indebtedness. Notwithstanding anything to the contrary contained in this Agreement, if any such restrictions prohibit or otherwise delay any purchase of shares of Common Stock which the Company is otherwise entitled or required to make pursuant to this Section 6, then the Company shall have the option to make such purchases pursuant to this Section 6 within thirty (30) days of the date that it is first permitted to make such purchase under the laws and/or agreements containing such restrictions. In the event that any shares of Common Stock are sold by a Management Holder pursuant to this Section 6, the Company, Apollo Group, the Management Holder, and such Management Holder’s successors, assigns or representatives, will take all reasonable steps necessary and desirable to obtain all required third-party, governmental and regulatory consents and approvals with respect to such sale and take all other actions necessary and desirable to facilitate consummation of such sale in a timely manner. For the avoidance of doubt, in the event a repurchase is delayed pursuant to the terms of this Section 6(e), the determination date for purposes of determining Fair Market Value shall be the date on which the applicable shares could, but for the prohibition or delay described above in this Section 6(e), have been repurchased.

(f) Withholding . The Company may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation, or may permit a Management Holder to elect to pay the Company any such required withholding taxes. If such Management Holder so elects, the payment by such Management Holder of such taxes shall be a condition to the receipt of amounts payable to such Management Holder under this Agreement. The Company shall, to the extent permitted or required by law, have the right to deduct any such taxes from any payment otherwise due to such Management Holder.

Section 7. Voting Agreement .

(a) Proxy . Each Management Holder hereby revokes any and all prior proxies or powers of attorney in respect of any of such Management Holder’s shares of Common Stock and constitutes and appoints Apollo Holder, or any nominee of Apollo Holder, with full power of substitution and resubstitution, at any time from the date hereof until the earlier of (i) the termination of this Agreement pursuant to Section 10(g) hereof (the “ Term ”) and (ii) the consummation of a Qualified Public Offering, as its true and lawful attorney and proxy (its “ Proxy ”), and in its name, place and stead, to vote each of such shares (whether such shares are currently held or may be acquired in the future by such Management Holder) as its Proxy, at every annual, special, adjourned or postponed meeting of the stockholders of the Company, including the right to sign its name (as stockholder) to any consent, certificate or other document relating to the Company to the fullest extent permitted by applicable law with respect to any matter referred to be voted on by the stockholders of the Company. THE FOREGOING PROXY

 

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AND POWER OF ATTORNEY ARE IRREVOCABLE AND COUPLED WITH AN INTEREST THROUGHOUT THE TERM.

(b) No Proxies for or Encumbrances on Management Holder Shares . Except pursuant to the terms of this Agreement, during the Term and prior to a Qualified Public Offering, no Holder shall, without the prior written consent of Apollo Holder, directly or indirectly, (i) grant any proxies (other than pursuant to Section 7(a) above) or enter into any voting trust or other agreement or arrangement with respect to the voting of any shares of Common Stock held by such Holder or (ii) except as permitted pursuant to Section 2 or Section 3, sell, assign, transfer, encumber or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to the direct or indirect sale, assignment, transfer, encumbrance or other disposition of, any such Management Holder’s shares.

Section 8. Restrictive Covenants . Each Management Holder agrees to be bound by (and has initialed each page of) the restrictive covenants set forth in Annex I hereto, which restrictive covenants are hereby incorporated by reference herein.

Section 9. Notices . In the event a notice or other document is required to be sent hereunder to the Company or to any Holder or the spouse or legal representative of a Holder, such notice or other document, if sent by mail, shall be sent by registered mail, return receipt requested (and by air mail in the event the addressee is not in the continental United States), to the party entitled to receive such notice or other document at the address set forth on Annex II hereto. Any such notice shall be effective and deemed received three (3) days after proper deposit in the mails, but actual notice shall be effective however and whenever received. The Company, any Holder or any spouse or legal representative of a Holder may effect a change of address for purposes of this Agreement by giving notice of such change to the Company, and the Company shall, upon the request of any party hereto, notify such party of such change in the manner provided herein. Until such notice of change of address is properly given, the addresses set forth on Annex II shall be effective for all purposes.

Section 10. Miscellaneous Provisions .

(a) Each Management Holder that is an entity that was formed for the sole purpose of acquiring shares of Common Stock or that has no substantial assets other than the shares of Common Stock or interests in shares of Common Stock agrees that (a) certificates of shares of its common stock or other instruments reflecting equity interests in such entity (and the certificates for shares of common stock or other equity interests in any similar entities controlling such entity) will note the restrictions contained in this Agreement on the transfer of Common Stock as if such common stock or other equity interests were shares of Common Stock and (b) no such shares of common stock or other equity interests may be transferred to any Person other than in accordance with the terms and provisions of this Agreement as if such shares or equity interests were shares of Common Stock.

(b) No Holder shall enter into any stockholder agreements or arrangements of any kind with any Person with respect to any securities of the Company on terms inconsistent with the provisions of this Agreement (whether or not such agreements or arrangements are with

 

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other Holders or with Persons that are not parties to this Agreement), including agreements or arrangements with respect to the acquisition or disposition of any Securities of the Company in a manner inconsistent with this Agreement. Notwithstanding the foregoing, neither the Investor Securityholders Agreements nor the Amended and Restated Securityholders Agreement, shall be deemed to be inconsistent with this Agreement.

(c) THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE 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.

(d) Whenever the context requires, the gender of all words used herein shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural.

(e) This Agreement shall be binding upon the Company, the Apollo Holder, the Management Holders, any spouses of the Management Holders, and their respective heirs, executors, administrators and permitted successors and assigns.

(f) This Agreement may be amended or waived from time to time by an instrument in writing signed by the Company and the Apollo Holder; provided , however , that if an amendment or waiver would disproportionately adversely affect the rights or obligations of the Management Holders as a group, such instrument in writing shall also require the signatures of Management Holders representing the Required Voting Percentage, provided , that this Agreement may be amended by the Company without the consent of any Holder to cure any ambiguity or to cure, correct or supplement any defective provisions contained herein, or to make any other provisions with respect to matters or questions hereunder as the Company may deem necessary or advisable so long as such action does not affect adversely the interest of any Holder. Notwithstanding the foregoing, if the Company issues a new class of capital stock, the Company may in good faith amend the terms of this Agreement to reflect such issuance and apply the terms of this Agreement to such new class of capital stock

(g) This Agreement shall only be effective on the Closing Date and shall be automatically terminated if the Exchange Offers contemplated herein are terminated or abandoned; provided , that the Management Investor Rights Agreement, dated April 10, 2007 shall remain in full force and effect. This Agreement shall terminate automatically upon the earlier to occur of: (i) the dissolution of the Company (unless the Company continues to exist after such dissolution as a limited liability company or in another form, whether incorporated in Delaware or another jurisdiction), (ii) any event which reduces the number of Holders to one in accordance with the terms hereof, or (iii) the consummation of a Control Disposition, provided,

 

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however, that if Registrable Securities have been registered pursuant to Sections 4 or 5 hereof prior to such termination, Section 5(g) shall survive such termination.

(h) Any Holder who disposes of all of his, her or its Common Stock in conformity with the terms of this Agreement shall cease to be a party to this Agreement and shall have no further rights hereunder other than rights to indemnification under Section 5(g), if applicable (it being understood and agreed, for the avoidance of doubt, that the obligations and restrictions under Annex I shall continue to apply to a Management Holder after such disposition in accordance with the terms of Annex I).

(i) The spouses of each Management Holder are fully aware of, understand and fully consent and agree to the provisions of this Agreement and its binding effect upon any community property interests or similar marital property interests in the Common Stock or other Company securities they may now or hereafter own, and agree that the termination of their marital relationship with any Management Holder for any reason shall not have the effect of removing any Common Stock or other securities of the Company otherwise subject to this Agreement from the coverage of this Agreement and that their awareness, understanding, consent and agreement are evidenced by their signing this Agreement. Furthermore, each individual Management Holder agrees to cause his or her spouse (and any subsequent spouse) to execute and deliver, upon the request of the Company, a counterpart of this Agreement, or an Adoption Agreement substantially in the form of Exhibit A or in a form satisfactory to the Company.

(j) Each party to this Agreement acknowledges that a remedy at law for any breach or attempted breach of this Agreement will be inadequate, agrees that each other party to this Agreement shall be entitled to specific performance and injunctive and other equitable relief in case of any such breach or attempted breach and further agrees to waive (to the extent legally permissible) any legal conditions required to be met for the obtaining of any such injunctive or other equitable relief (including posting any bond in order to obtain equitable relief).

(k) This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. The failure of any Holder to execute this Agreement does not make it invalid as against any other Holder. Exchange and delivery of this Agreement by PDF via electronic mail or by exchange of facsimile copies bearing the facsimile signature of a party shall constitute a valid and binding execution and delivery of this Agreement by such party. Such PDF and facsimile copies shall constitute legally enforceable original documents.

(l) Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, and such invalid, illegal or otherwise unenforceable provisions shall be null and void as to such jurisdiction. It is the intent of the parties, however,

 

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that any invalid, illegal or otherwise unenforceable provisions be automatically replaced by other provisions which are as similar as possible in terms to such invalid, illegal or otherwise unenforceable provisions but are valid and enforceable to the fullest extent permitted by law.

(m) Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and other documents as any other party hereto reasonably may request in order to carry out the provisions of this Agreement and the consummation of the transactions contemplated hereby, in each case, subject to the provisions hereunder.

(n) The parties to this Agreement agree that jurisdiction and venue in any action brought by any party hereto pursuant to this Agreement shall exclusively and properly lie in the Delaware State Chancery Court located in Wilmington, Delaware, or (in the event that such court denies jurisdiction) any federal or state court located in the State of Delaware. By execution and delivery of this Agreement each party hereto irrevocably submit to the jurisdiction of such courts for himself and in respect of his property with respect to such action. The parties hereto irrevocably agree that venue for such action would be proper in such court, and hereby waive any objection that such court is an improper or inconvenient forum for the resolution of such action. The parties further agree that the mailing by certified or registered mail, return receipt requested, of any process required by any such court shall constitute valid and lawful service of process against them, without necessity for service by any other means provided by statute or rule of court.

(o) No course of dealing between the Company, or its subsidiaries, and the Holders (or any of them) or any delay in exercising any rights hereunder will operate as a waiver of any rights of any party to this Agreement. The failure of any party to enforce any of the provisions of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

(p) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHT OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS ENTERED INTO IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN.

(q) Except as otherwise expressly provided herein, this Agreement sets forth the entire agreement of the parties hereto as to the subject matter hereof and supersedes all previous agreements among all or some of the parties hereto, whether written, oral or otherwise,

 

26


as to such subject matter, including without limitation the Management Investor Rights Agreement dated as of April 10, 2007. Unless otherwise provided herein, any consent required by the Company may be withheld by the Company in its sole discretion.

(r) Except as otherwise expressly provided herein, no Person not a party to this Agreement, as a third party beneficiary or otherwise, shall be entitled to enforce any rights or remedies under this Agreement.

(s) If, and as often as, there are any changes in the Common Stock by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions of this Agreement, as may be required, so that the rights, privileges, duties and obligations hereunder shall continue with respect to the Common Stock as so changed.

(t) No director of the Company shall be personally liable to the Company or any Holder as a result of any acts or omissions taken under this Agreement in good faith.

(u) In the event additional shares of Common Stock are issued by the Company to a Holder at any time during the term of this Agreement, either directly or upon the exercise or exchange of securities of the Company exercisable for or exchangeable into shares or Common Stock, such additional shares of Common Stock, as a condition to their issuance, shall become subject to the terms and provisions of this Agreement.

(v) Notwithstanding anything to the contrary contained herein, but subject to Section 3.2, the Apollo Holder may assign its rights or obligations, in whole or in part, under this Agreement to any member of the Apollo Group. In the event that any Affiliate of the Apollo Holder becomes an owner of Common Stock of the Company, such member shall automatically become party to this Agreement and this Agreement shall be amended and restated to provide that such Person or a designee of such Person shall have the same rights and obligations of the Apollo Holder hereunder.

(w) Neither the ownership of Common Stock or grant of Awards nor any provision contained in this Agreement shall entitle the Management Holder to obtain employment with or remain in the employment of the Company or any of its subsidiaries or Affiliates or affect any right the Company or any subsidiary or Affiliate of the Company may have to terminate the Management Holder’s employment, pursuant to an applicable employment agreement or otherwise for any reason. This Agreement is subject and without prejudice to the Stock Incentive Plan or any employment agreement, consulting arrangement or other contractual arrangement binding on a Management Holder.

*   *   *   *   *

 

27


This Agreement is executed by the Company, the Apollo Holders and by each Management Holder and spouse of each Management Holder to be effective as of the date first above written.

 

DOMUS HOLDINGS CORP.
By:   /s/ Anthony E. Hull
  Name: Chief Financial Officer
  Title: Chief Financial Officer

 

28


DOMUS INVESTMENT HOLDINGS, LLC

By: Apollo Management VI, L.P.,

its manager

By: AIF VI Management, LLC,

its general partner

By:   /s/ Laurie Medley
  Name: Laurie Medley
  Title: Vice President
RCIV HOLDINGS, L.P. (CAYMAN)

By: Apollo Advisors VI (EH), L.P.,

its general partner

By: Apollo Advisors VI (EH-GP), Ltd.,

its general partner

By:   /s/ Laurie Medley
  Name: Laurie Medley
  Title: Vice President
APOLLO INVESTMENT FUND VI, L.P.

By: Apollo Advisors VI, L.P.,

its general partner

By: Apollo Capital Management VI, LLC,

its general partner

By:   /s/ Laurie Medley
  Name: Laurie Medley
  Title: Vice President

 

[ Signature Page of Amended and Restated Management Investor Rights Agreement ]


RCIV HOLDINGS (LUXEMBOURG), S.A.R.L.
By:   /s/ Laurie Medley
  Name: Laurie Medley
  Title: Class A Manager

 

[ Signature Page of Amended and Restated Management Investor Rights Agreement ]


MANAGEMENT HOLDERS (as evidenced by their execution of an Adoption Agreement attached hereto as Exhibit A)

 

31


EXHIBIT A

ADOPTION AGREEMENT

This Adoption Agreement (“ Adoption ”) is executed pursuant to the terms of the Amended and Restated Management Investor Rights Agreement dated as of [                  ], 2011, a copy of which is attached hereto (the “ Management Investor Rights Agreement ”), by the transferee (“ Transferee ”) executing this Adoption. By the execution of this Adoption, the Transferee agrees as follows:

 

  1. Acknowledgement . Transferee acknowledges that Transferee is acquiring or receiving certain shares of Common Stock of Domus Holdings Corp. a Delaware corporation (the “ Company ”), subject to the terms and conditions of the Management Investor Rights Agreement, among the Company and the Holders party thereto. Capitalized terms used herein without definition are defined in the Management Investor Rights Agreement and are used herein with the same meanings set forth therein.

 

  2. Agreement . Transferee (i) agrees that the shares of Common Stock acquired or received by Transferee, and certain other shares of Common Stock that may be acquired by Transferee in the future, shall be bound by and subject to the terms of the Management Investor Rights Agreement, pursuant to the terms thereof, except as such terms have been modified by the letter agreement, executed on even date herewith (the “ Side Letter ”), between Transferee and the Company, (ii) hereby adopts the Management Investor Rights Agreement with the same force and effect as if he were originally a party thereto, except to the extent that the terms of the Management Investor Rights Agreement have been modified by the Side Letter, and (iii) hereby agrees that Transferee shall be deemed a “Management Holder” or “Holder”, as applicable, for purposes of the Management Investor Rights Agreement.

 

  3. Notice . Any notice required as permitted by the Management Investor Rights Agreement shall be given to Transferee at the address listed beside Transferee’s signature below.

 

  4. Law . THIS ADOPTION WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS ADOPTION, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

 

  5. Joinder . The spouse of the undersigned Transferee, if applicable, executes this Adoption to acknowledge its fairness and that it is in such spouse’s best interest, and to bind such spouse’s community interest, if any, in the shares of Common Stock and other securities referred to above and in the Management Investor Rights Agreement, to the terms of the Management Investor Rights Agreement.

 

32


           
Name of Transferee     Name of Spouse
           
Signature     Signature
           
Date     Date

 

33


ANNEX I

Restrictive Covenants

Each Management Holder acknowledges and agrees that it has received good and valuable consideration for the restrictive covenants set forth herein, including without limitation, the right to acquire and own securities of the Company, the employment by the Company or its subsidiaries and the related compensation and benefits and other good and valuable consider, the sufficiency of which is hereby acknowledged. Each Management Holder shall be bound by the provisions contained in this Annex I.

1. Non-Solicitation . During the period commencing on the date hereof and ending on the third anniversary of the date of termination of the Management Holder’s employment with the Company and its Affiliates for any reason (or such longer period as may be specified in any agreement between the Company and such Management Holder), the Management Holder shall not, directly or indirectly, through another Person (i) induce or attempt to induce any employee, consultant or independent contractor of the Company or any Affiliate of the Company to leave the employ of the Company or such Affiliate, or in any way interfere with the relationship between the Company or any such Affiliate, on the one hand, and any employee, consultant or independent contractor thereof, on the other hand, (ii) hire any person who was an employee, consultant or independent contractor of the Company or any Affiliate of the Company or (iii) induce or attempt to induce any customer (whether current or former), supplier, licensee or other business relation of the Company or any Affiliate of the Company to cease doing business with the Company or such Affiliate, or in any way interfere with the relationship between any such customer, supplier, licensee or business relation, on the one hand, and the Company or any such Affiliate, on the other hand.

2. Non-Competition . Each Management Holder acknowledges that, in the course of his employment with the Company and/or its Affiliates and their predecessors, he or she has become familiar, or will become familiar, with the Company’s and its Affiliates and their respective predecessors’ trade secrets and other Confidential Information and that such Management Holder’s services have been and will be of special, unique and extraordinary value to the Company and its Affiliates. Therefore, each Management Holder agrees that, during the period commencing on the date hereof and ending on the second anniversary of the Management Holder’s termination of employment with the Company and its Affiliates for any reason (or such longer period as may be specified in any agreement between the Company and such Management Holder, the “ Non-Compete Period ”), such Management Holder shall not, directly or indirectly, own, manage, operate, control, be employed by (whether as an employee, consultant, independent contractor or otherwise, and whether or not for compensation) or render services to any person, firm, corporation or other entity, in whatever form, engaged in any business of the same type as any business in which (a) with respect to the President of the Company (or, if the President of the Company as of the Closing Date is no longer serving in such position, the Chief Executive Officer of the Company) (such individual, the “ Reporting Person ”) and Management Holders who directly report to the Reporting Person, the Company or any of its Affiliates is engaged on the date of termination of such Management Holder’s employment or in which they have proposed, on or prior to such date, to be engaged in on or after such date and in which the Management Holder has been involved to any extent (other than de minimis) at any

 

34


time during the two (2) year period ending with the date of termination of such Management Holder’s employment, anywhere in the world in which the Company or its Affiliates conduct business and (b) with respect to all other Management Holders, the Management Holder is engaged on the date of termination of such Management Holder’s employment or has been engaged in at any time during the two (2) year period ending with the date of termination of such Management Holder’s employment, anywhere in the world in which the Company or its Affiliates conducts business. Nothing in this Section 2 shall prohibit any Management Holder from being a passive owner of not more than 4.99% of the outstanding stock of any class of a corporation which is publicly traded, so long as such Management Holder has no active participation in the business of such corporation.

3. Non-Disclosure; Non-Use of Confidential Information . The Management Holder shall not disclose or use at any time, either during his employment with the Company and its Affiliates or thereafter, any Confidential Information (as hereinafter defined) of which the Management Holder is or becomes aware, whether or not such information is developed by him, except to the extent that such disclosure or use is directly related to and required by the Management Holder’s performance in good faith of duties assigned to the Management Holder by the Company. The Management Holder will take all appropriate steps to safeguard Confidential Information in his possession and to protect it against disclosure, misuse, espionage, loss and theft. The Management Holder shall deliver to the Company at the termination of his employment with the Company and its Affiliates, or at any time the Company may request, all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data (and copies thereof) relating to the Confidential Information or the Work Product (as hereinafter defined) of the business of the Company or any of its Affiliates that the Management Holder may then possess or have under his control.

4. Proprietary Rights . The Management Holder recognizes that the Company and its Affiliates possess a proprietary interest in all Confidential Information and Work Product and have the exclusive right and privilege to use, protect by copyright, patent or trademark, or otherwise exploit the processes, ideas and concepts described therein to the exclusion of the Management Holder, except as otherwise agreed between the Company and the Management Holder in writing. The Management Holder expressly agrees that any Work Product made or developed by the Management Holder or the Management Holder’s agents or affiliates during the course of the Management Holder’s employment, including any Work Product which is based on or arises out of Work Product, shall be the property of an inure to the exclusive benefit of the Company and its Affiliates. The Management Holder further agrees that all Work Product developed by the Management Holder (whether or not able to be protected by copyright, patent or trademark) during the course of such Management Holder’s employment, or involving the use of the time, materials or other resources of the Company or any of its Affiliates, shall be promptly disclosed to the Company and shall become the exclusive property of the Company, and the Management Holder shall execute and deliver any and all documents necessary or appropriate to implement the foregoing.

5. Certain Definitions .

(a) As used herein, the term “ Confidential Information ” means information that is not generally known to the public (except for information known to the public

 

35


because of the Management Holder’s violation of Section 3 of this Annex) and that is used, developed or obtained by the Company in connection with its business, including, but not limited to, information, observations and data obtained by the Management Holder while employed by the Company or any predecessors thereof (including those obtained prior to the date of this Agreement) concerning (i) the business or affairs of the Company (or such predecessors), (ii) products or services, (iii) fees, costs and pricing structures, (iv) designs, (v) analyses, (vi) drawings, photographs and reports, (vii) computer software, including operating systems, applications and program listings, (viii) flow charts, manuals and documentation, (ix) databases, (x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (xii) customers and clients and customer or client lists, (xiii) other copyrightable works, (xiv) all production methods, processes, technology and trade secrets, and (xv) all similar and related information in whatever form. Confidential Information will not include any information that has been published in a form generally available to the public prior to the date the Management Holder proposes to disclose or use such information. Confidential Information will not be deemed to have been published or otherwise disclosed merely because individual portions of the information have been separately published, but only if all material features comprising such information have been published in combination. For purposes of this Section 5(a), the “Company” shall mean the Company collectively with its Affiliates.

(b) As used herein, the term “ Work Product ” means all inventions, innovations, improvements, technical information, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable) that relates to the Company’s or any of its Affiliates’ actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by the Management Holder (whether or not during usual business hours and whether or not alone or in conjunction with any other person) while employed by the Company or any of its Affiliates (including those conceived, developed or made prior to the date of this Agreement) together with all patent applications, letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing.

 

36


ANNEX II

 

1.   If to the Company:
     
  Domus Holdings Corp.
  c/o Apollo Management VI, L.P.
  9 West 57 th Street, 43 rd Floor
  New York, NY 10019
  Facsimile: (212) 515-3264
  Attention: Marc E. Becker
 
  with a copy (which shall not constitute notice) to:
 
  Wachtell, Lipton, Rosen & Katz
  51 West 52 nd Street
  New York, NY 10019-6150
  Facsimile: (212) 403-2000
  Attention:            Steven A. Cohen, Esq.
                              Igor Kirman, Esq.
 
  and
 
  Skadden, Arps, Slate, Meagher & Flom LLP
  Four Times Square
  New York, NY 10036
  Facsimile: (212) 735-2000
  Attention:            Stacy J. Kanter, Esq.
                              Thomas W. Greenberg, Esq.
 
2.   If to the Apollo Holder:
 
  Domus Investment Holdings, LLC
  Apollo Investment Fund VI, L.P.
  c/o Apollo Management VI, L.P.
  9 West 57 th Street, 43 rd Floor
  New York, NY 10019
  Facsimile: (212) 515-3264
  Attention: Marc E. Becker
 
  with a copy (which shall not constitute notice) to:

 

37


  Wachtell, Lipton, Rosen & Katz
  51 West 52 nd Street
  New York, NY 10019-6150
  Facsimile: (212) 403-2000
  Attention:            Steven A. Cohen, Esq.
                              Igor Kirman, Esq.
 
  and
 
  Skadden, Arps, Slate, Meagher & Flom LLP
  Four Times Square
  New York, NY 10036
  Facsimile: (212) 735-2000
  Attention:            Stacy J. Kanter, Esq.
                              Thomas W. Greenberg, Esq.
 
3.   If to any Management Holder, to the address set forth with respect to such Management Holder in the Company’s records.

*   *   *   *   *

 

38

Exhibit 10.49

Execution Copy

AMENDMENT NO. 3

TO

TRADEMARK LICENSE AGREEMENT

THIS AMENDMENT TO TRADEMARK LICENSE AGREEMENT is made and entered into on this 14 th day of January, 2011 by and among SPTC DELAWARE, LLC, a Delaware limited liability company (as assignee of SPTC, Inc., a Delaware corporation) ( SPTC ) and SOTHEBY’S, a Delaware corporation, as successor by merger to SOTHEBY’S HOLDINGS, INC., a Michigan corporation ( Holdings ), on the one hand, and REALOGY CORPORATION, a Delaware corporation, as successor to CENDANT CORPORATION, a Delaware Corporation ( Parent ) and SOTHEBY’S INTERNATIONAL REALTY LICENSEE CORPORATION (f/k/a Monticello Licensee Corporation), a Delaware corporation ( Licensee ). Capitalized terms used herein and not defined herein shall have the meaning ascribed to such terms in the License Agreement (as defined below).

WHEREAS, SPTC, Holdings, Parent and Licensee entered into that certain Trademark License Agreement on February 17, 2004, as amended (the “License Agreement”); and

WHEREAS, the parties hereby desire to amend the License Agreement to add the country of Australia to the Territory on the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:

1. Addition of Australia to the Territory. The country of Australia is hereby added to the Territory.

1.1 Amendment of Schedule C . Schedule C is hereby amended by adding the country of Australia as part of the Territory.

2. Sharing of Development Fees for Australia . In the event that an initial franchise fee or development fee ( “Development Fee” ) is paid to the Licensee Group in connection with the grant of a master franchise or subfranchise agreement for the country of Australia as permitted under Subsection 7.2(a) of the License Agreement, the Licensee Group shall pay to Licensor an amount equal to 75% of such Development Fees until Licensor is paid $500,000, and 25% of such Development Fees thereafter. All payments to Licensor shall be made on the 15 th Business Day after the end of the calendar month in which such Development Fees are received by the Licensee Group.


3. Use of abbreviation SIR . The parties acknowledge that Licensor has approved the use of the abbreviation “SIR” in a mobile device application. Hereafter, the parties will memorialize any authorized future uses of the “SIR” abbreviation for products or services in writing (e-mail or otherwise) but such authorizations need not be included in a formal amendment to the License Agreement.

4. Miscellaneous .

3.1 Counterparts . This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, when taken together shall constitute one and the same agreement.

3.2 Heading . The headings herein are for convenience purposes only, do not constitute a part of this Amendment and shall not be deemed to limit or affect any of the provisions of this Amendment.

3.3 License Agreement . This Amendment shall operate as an Amendment to the License Agreement. Except as expressly provided herein, the License Agreement is not amended, modified or affected by this Amendment, and the License Agreement and the rights and obligations of the parties hereto thereunder are hereby ratified and confirmed by the parties hereto in all respects.

[Remainder of Page Intentionally Left Blank; Signature Page Follows]


IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above written.

 

SPTC DELAWARE, LLC
By:   /s/ William S. Sheridan
Name:   William S. Sheridan
Title:   Vice President and Treasurer
SOTHEBY’S
By:   /s/ Henry Howard-Sneyd
Name:   Henry Howard-Sneyd
Title:   Executive Vice President
REALOGY CORPORATION
By:   /s/ Dave Weaving
Name:   Dave Weaving
Title:   Executive Vice President and Chief Administrative Officer
SOTHEBY’S INTERNATIONAL REALTY LICENSEE CORPORATION
By:   /s/ Dave Weaving
Name:   Dave Weaving
Title:   Authorized Person

Exhibit 10.70

REALOGY CORPORATION

PHANTOM VALUE PLAN

This phantom value plan (the “ Plan ”) is intended to provide certain designated members of the management team of Realogy Corporation (the “ Company ”) with an incentive to remain in the service of the Company and to increase their interest in the success of the Company and to receive compensation based upon the Company’s success. Various examples describing the intended operation of Incentive Awards are set forth in Appendix A annexed hereto and deemed a part hereof.

 

1. DEFINITIONS

For purposes of the Plan, the following terms shall have the meanings set forth below:

 

  (a) 2007 Plan ” means the Domus Holdings Corp. 2007 Stock Incentive Plan (or any successor thereto).

 

  (b) Additional Amount ” shall have the meaning set forth in Section 6(a)(1) of the Plan.

 

  (c) Additional Amount Cash ” shall have the meaning set forth in Section 6(a)(1) of the Plan.

 

  (d) Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

 

  (e) Affiliate Holders ” means holders of the Notes who are Affiliates of Apollo Global Management, LLC.

 

  (f) Award Amount ” shall have the meaning set forth in Section 4(a) of the Plan.

 

  (g) Award Payment Date ” shall have the meaning set forth in Section 4(d) of the Plan.

 

  (h) Board ” shall have the meaning set forth in Section 2(a) of the Plan.

 

  (i) Cash Payment Date ” shall have the meaning set forth in Section 4(d) of the Plan.

 

  (j) Cash Payment Event ” shall have the meaning set forth in Section 4(d) of the Plan.


  (k) Change of Control ” shall have the meaning given to such term under Section 409A of the Code.

 

  (l) Code ” means the Internal Revenue Code of 1986, as amended.

 

  (m) Committee ” shall have the meaning set forth in Section 2(a) of the Plan.

 

  (n) First Grant ” shall have the meaning set forth in Section 4(b) of the Plan.

 

  (o) Holdings ” means Domus Holdings Corp., a Delaware corporation.

 

  (p) Holdings Committee ” shall have the meaning set forth in Section 6(a)(2) of the Plan.

 

  (q) Incentive Award ” means the Series A Convertible Notes Incentive Award, the Series B Convertible Notes Incentive Award and/or the Series C Convertible Notes Incentive Award.

 

  (r) Incentive Award Agreement ” means any writing setting forth the terms of an Incentive Award that has been duly authorized and approved by the Committee.

 

  (s) Initial Valuation Event ” shall have the meaning set forth in Section 4(c) of the Plan.

 

  (t) Initial Valuation Event Threshold ” shall have the meaning set forth in Section 4(c) of the Plan.

 

  (u) Interest Payment Date ” means each April 15 and October 15 starting in the year 2011.

 

  (v) Notes ” means the Series A Convertible Notes, the Series B Convertible Notes and the Series C Convertible Notes.

 

  (w) Participant ” shall have the meaning set forth in Section 3 of the Plan.

 

  (x) 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.

 

  (y) Prior Transaction ” shall have the meaning set forth in Section 4(c) of the Plan.

 

  (z)

Qualified Public Offering ” means the closing of the first underwritten public offering of shares of common stock of the Company or any indirect or direct parent of the Company pursuant to an effective registration statement under the Securities Act of 1933, as amended (other than (A) a registration relating solely to an employee benefit plan or employee stock plan, a dividend reinvestment plan,

 

2


 

or a merger or a consolidation, (B) a registration incidental to an issuance of securities under Rule 144A, (C) a registration on Form S–4 or any successor form or (D) a registration on Form S–8 or any successor form).

 

  (aa) Series A Convertible Notes ” means the Company’s 11.00% Series A Convertible Notes due 2018.

 

  (bb) Series A Convertible Notes Incentive Awards ” means an award that corresponds to the Series A Convertible Notes.

 

  (cc) Series B Convertible Notes ” means the Company’s 11.00% Series B Convertible Notes due 2018.

 

  (dd) Series B Convertible Notes Incentive Awards ” means an award that corresponds to the Series B Convertible Notes.

 

  (ee) Series C Convertible Notes ” means the Company’s 11.00% Series C Convertible Notes due 2018.

 

  (ff) Series C Convertible Notes Incentive Awards ” means an award that corresponds to the Series C Convertible Notes.

 

  (gg) Shares ” shall mean shares of Class A common stock of Holdings, par value $0.01 per share.

 

  (hh) Similar Consideration ” shall have the meaning set forth in Section 5(d) of the Plan.

 

  (ii) Stock Option ” shall have the meaning set forth in Section 6(a)(2) of the Plan.

 

  (jj) Subsequent Valuation Event ” means each Valuation Event occurring after the Initial Valuation Event.

 

  (kk) 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.

 

  (ll) Term ” shall have the meaning set forth in Section 4(b) of the Plan.

 

  (mm) Valuation Event ” shall have the meaning set forth in Section 4(c) of the Plan.

 

2. ADMINISTRATION

 

  (a) The Plan shall be administered by the Board of Directors of the Company (the “ Board ”) or the Compensation Committee of the Board (the “ Committee ”). The term “Committee” shall, for all purposes of the Plan, be deemed to refer to the Board if the Board is administering the Plan.

 

3


  (b) 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 majority of the Committee shall constitute a quorum and the actions of the majority of the Committee present at a meeting, or actions approved in writing by the majority of the Committee, shall be the actions of the Committee. Except as may otherwise be expressly reserved to the Board as provided herein and, with respect to any Incentive Award, except as may otherwise be provided in the Incentive Award Agreement evidencing such Incentive Award, the Committee shall have all powers with respect to the administration of the Plan, including the authority to:

 

  (i) determine eligibility and the particular persons who will receive Incentive Awards;

 

  (ii) grant Incentive Awards to eligible persons, determine the Award Amount, determine the other specific terms and conditions of Incentive Awards consistent with the express limits of the Plan and establish the events of termination or forfeiture of such Incentive Awards;

 

  (iii) approve the forms of Incentive Award Agreements, which need not be identical either as to type of Incentive Award or among Participants;

 

  (iv) construe and interpret the provisions of the Plan and any Incentive 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;

 

  (v) cancel, modify, or waive the Company’s rights with respect to, or modify, discontinue, suspend, or terminate any or all outstanding Incentive Awards held by Participants, subject to any required consent under Section 14;

 

  (vi) accelerate or extend the term of any or all outstanding Incentive Awards, subject to any consent required under Section 14; and

 

  (vii) 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.

 

  (c)

All decisions of the Committee shall be 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 may obtain the advice of experts, including employees of and professional advisors to the Company. The Committee 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

 

4


 

in good faith. The provisions of Incentive Awards need not be the same with respect to each Participant.

 

3. ELIGIBILITY

The Committee shall, from time to time, select certain employees of the Company to whom awards may be granted, and who will, upon such grant, become participants in the Plan (each, a “ Participant ”).

 

4. INCENTIVE AWARDS

 

  (a) General . The Committee shall grant each Participant an Incentive Award which shall be granted in three series, the Series A Convertible Notes Incentive Award, the Series B Convertible Notes Incentive Award and the Series C Convertible Notes Incentive Award. Each series of an Incentive Award shall be denominated as a dollar amount (the “ Award Amount ”).

 

  (b) Term . The “ Term ” with respect to a each series of an Incentive Award means the period from the date of the first grant of Incentive Awards to any Participant (the “ First Grant ”) to the earlier of (i) the tenth anniversary of such date of the First Grant or (ii) the date on which the last payment is made with respect to an Incentive Award pursuant to Section 4(d) below.

 

  (c) Valuation Event . A “ Valuation Event ” shall be deemed to occur with respect to a particular series of an Incentive Award each time that (i) all or a portion of the outstanding obligations owed to Affiliate Holders under the series of Notes to which the Incentive Award corresponds is discharged by the Company, whether on the maturity date or otherwise or (ii) the Affiliate Holders sell to a non-affiliated third party all or a portion of the Notes they own of the series to which the Incentive Award corresponds; provided , that a Valuation Event shall not be deemed to occur under the series of Notes to which the Incentive Awards corresponds until such time as transactions described in clauses (i) and (ii) above have been completed with respect to at least $267,638,044 (the “ Initial Valuation Event Threshold ”) of the aggregate principal amount of all Notes owned by the Affiliate Holders on the date of the First Grant (the “ Initial Valuation Event ”). In the event that the Initial Valuation Event Threshold is met through more than one transaction, then any of the transactions described in clauses (i) or (ii) above which is completed prior to, and including, the date the Initial Valuation Event Threshold is met (each, a “ Prior Transaction ”), including, if applicable, any transaction completed prior to, and including, the date the Initial Valuation Event Threshold is met in which the Affiliate Holders receive cash upon the transfer or exchange or in satisfaction of all or a portion of the non-cash consideration received in connection with a Prior Transaction, shall be aggregated and treated as having occurred on the date of, and as forming part of, the Initial Valuation Event for all purposes under the Plan. For the sake of clarity, in no event shall the receipt by the Affiliate Holders of cash interest payments pursuant to the terms of the Notes give rise to a Valuation Event.

 

5


  (d)

Payment . Subject to Sections 8 and 9, payment in respect of the Incentive Awards will be made on the 15 th business day (each such 15 th business day, an “ Award Payment Date ”) following (i) the Initial Valuation Event or a Subsequent Valuation Event, as the case may be, but only if (A) such Valuation Event occurs prior to the tenth anniversary of the date of the First Grant and (B) all or a portion of the consideration paid to Affiliate Holders in connection with such Valuation Event consists of cash and (ii) each date (each a “ Cash Payment Date ”) which occurs on or after the date of the Initial Valuation Event but prior to the tenth anniversary of the date of the First Grant and on which the Affiliate Holders receive cash upon the transfer or exchange or in satisfaction of (each a “ Cash Payment Event ”) all or a portion of the non-cash consideration received in connection with such Valuation Event (including in connection with a Prior Transaction).

 

5. CALCULATION OF PAYMENTS

 

  (a) On the Award Payment Date following the Initial Valuation Event, each Participant shall be entitled to receive, with respect to the particular series of Incentive Awards to which the Initial Valuation Event relates, an amount which bears the same ratio to the Award Amount as (i) the aggregate amount of cash received by Affiliate Holders in connection with the Initial Valuation Event in respect of the particular series of Notes bears to (ii) the aggregate principal amount of such series of Notes held by Affiliate Holders on the date of the First Grant.

 

  (b) On the Award Payment Date following each Subsequent Valuation Event, if any, each Participant shall be entitled to receive, with respect to the particular series of Incentive Awards to which the Subsequent Valuation Event relates, an amount which bears the same ratio to the Award Amount as (i) the aggregate amount of cash received by Affiliate Holders in such Subsequent Valuation Event in respect of the particular series of Notes bears to (ii) the aggregate principal amount of such series of Notes held by Affiliate Holders on the date of the First Grant.

 

  (c) On each Award Payment Date following a Cash Payment Date, (i) each Participant will be entitled to receive, with respect to the particular series of Incentive Awards to which the Cash Payment Event relates, an amount which bears the same ratio to the Award Amount as (A) the aggregate amount of cash received by Affiliate Holders in the Cash Payment Event in respect of the particular series of Notes bears to (B) the aggregate principal amount of such series of Notes held by Affiliate Holders on the date of the First Grant and (ii) each Participant may also be entitled to receive an Additional Amount pursuant to Section 6 below.

 

  (d)

If the non-cash consideration received by the Affiliate Holders with respect to two or more series of Notes in connection with a Valuation Event shall be of exactly the same type ( i.e. , shares of common stock, shares of preferred stock of the same series, etc.) (the “ Similar Consideration ”), then for purposes of determining the

 

6


 

amount of cash received in connection with a Cash Payment Event of all or a portion of the Similar Consideration, such amounts shall be allocated between the two or more series of Incentive Awards in such proportions so as to reflect the relative portion of such Similar Consideration received by the Affiliate Holders in satisfaction of its Series A Convertible Notes, its Series B Convertible Notes and its Series C Convertible Notes, as applicable, in connection with the applicable Valuation Event.

 

6. ADDITIONAL AMOUNT; GRANT OF STOCK OPTIONS

 

  (a) (1) Subject to Section 9 below, to the extent the Affiliate Holders shall have received cash as interest or dividends pursuant to the terms of the non-cash consideration received in connection with a Valuation Event or a subsequent Cash Payment Event (the “ Additional Amount Cash ”), the Company shall deliver to the Participant on the applicable Award Payment Date additional cash in an amount (an “ Additional Amount ”) which bears the same ratio to the Award Amount as (A) the aggregate amount of Additional Amount Cash received by the Affiliate Holders pursuant to the terms of the non-cash consideration from the date of the applicable Valuation Event or a prior Cash Payment Date, as the case may be, to the applicable Cash Payment Date bears to (B) the aggregate principal amount of such series of Notes held by Affiliate Holders on the date of the First Grant.

(2) Except as set forth on Schedule I , as of each Interest Payment Date on which the Affiliate Holders receive cash interest payments pursuant to the terms of the Notes, the Board of Directors of Holdings or an authorized committee thereof (either such entity, the “ Holdings Committee ”) shall grant to each Participant listed on attached Schedule I (so long as such Participant is then employed by the Company or an Affiliate thereof) a stock option under the 2007 Plan (the “ Stock Option ”) with an aggregate value (determined on a Black-Scholes basis in the sole discretion of the Holdings Committee) equal to an amount which bears the same ratio to the aggregate Award Amount in respect of such Participant’s Incentive Award as (A) the aggregate amount of interest payments received by Affiliate Holders on such Interest Payment Date pursuant to the Notes bears to (B) the aggregate principal amount of Notes held by Affiliate Holders on the date of the First Grant; provided , however , that for purposes of determining the number of Stock Options to be granted as of the first Interest Payment Date (April 15, 2011), the foregoing clause (2)(A) shall be calculated based solely on the aggregate amount of interest which has accrued from the issue date of the Notes through the first Interest Payment Date. For the sake of clarity, the Black-Scholes value of each Stock Option grant shall not be determined separately with respect to each series of Notes, but rather shall be determined based on all series of Notes and the aggregate Award Amount. Each Stock Option grant shall have an exercise price equal to the fair market value of a Share on the date

 

7


of grant of such Stock Option; one-third of each Stock Option grant shall vest on each of the first three anniversaries of the date of grant of such Stock Option so long as the Participant has remained employed the Company or an Affiliate thereof; a vested Stock Option shall not be exercisable until the one-year anniversary of a Qualified Public Offering; each Stock Option grant shall have a term of 7.5 years, subject to the earlier termination in the event of termination of employment; and each Stock Option grant shall be subject to the terms and conditions of the 2007 Plan and shall contain such other customary terms and conditions as may be prescribed by the Holdings Committee.

 

  (b) With respect to Section 6(a)(1) above, the Additional Amount shall be determined separately with respect to the Series A Convertible Notes Incentive Award, the Series B Convertible Notes Incentive Award and the Series C Convertible Notes Incentive Award and will only be paid to the extent the non-cash consideration pursuant to which such cash payments were received by the Affiliate Holders was received in satisfaction of the Notes to which each series relates. If the non-cash consideration pursuant to which such cash payments were received by the Affiliate Holders was paid to two or more series of Notes, the Additional Amount shall be allocated proportionately in accordance with Section 5(d) above.

 

7. QUALIFIED PUBLIC OFFERING

If a Cash Payment Event consists of and occurs in conjunction with or subsequent to a Qualified Public Offering, then prior to the close of business on the tenth (10 th ) business day immediately preceding the Award Payment Date related to such Cash Payment Event, Participant may elect to receive, in lieu of cash, a number of unrestricted shares of common stock with a fair market value, as determined in good faith by the Committee, equal to the amount due on such Award Payment Date, plus a number of restricted shares of such common stock with a fair market value, as determined in good faith by the Committee, equal to the amount due on such Award Payment Date multiplied by 0.15. The restricted shares of common stock shall vest, based on continued employment, on the first anniversary of such Cash Payment Event.

 

8. CHANGE IN CONTROL

Incentive Awards under the Plan shall be subject to acceleration and payment upon a Change of Control, but only if the Affiliate Holders receive consideration in the Change of Control transaction with respect to the Notes then held by such Affiliate Holders or with respect to any non-cash consideration previously received by such Affiliate Holders in respect of such Notes in connection with each Valuation Event; provided , however , that in no event shall a Qualified Public Offering constitute a Change of Control. Payment in connection with a Change of Control shall be made on the 15 th business day following the date on which the event that resulted in the Change of Control is consummated and in the same form (and in the same proportion) as such consideration received by Affiliate Holders.

 

9. FORFEITURE

 

8


Outstanding Incentive Awards under the Plan shall be immediately forfeited and cancelled upon the Participant’s termination of employment with the Company and its Subsidiaries for any reason. In addition, all outstanding Incentive Awards shall be forfeited and cancelled on the tenth anniversary of the date of the First Grant; provided , however , that Participants shall retain their rights to receive payment in respect of any Valuation Event or Cash Payment Event that occurs prior to such tenth anniversary.

 

10. EQUITABLE ADJUSTMENTS

The Committee shall adjust the Incentive Awards from time to time as it deems necessary in the event of certain corporate transactions or transactions by the Affiliate Holders, including, but not limited to, certain debt for equity exchanges, certain debt for debt exchanges and an underwritten initial public offering of its, or its direct or indirect parent’s, common equity, in order to preserve (but neither enlarge nor dilute) the underlying incentive opportunity represented by the Incentive Awards.

 

11. NONASSIGNABILITY OF INCENTIVE AWARDS

Unless otherwise specifically provided by the Committee in an Incentive Award Agreement, no Incentive Award granted under the Plan shall be assignable or otherwise transferable by the Participant, except by will or by the laws of descent and distribution.

 

12. NO RIGHT TO AN INCENTIVE AWARD

Neither the adoption of the Plan nor any action of the Committee shall be deemed to give an employee, director or consultant any right to receive an Incentive Award under the Plan, except as may be evidenced by an Incentive 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 Incentive Award Agreement. The Plan shall be unfunded. The Company shall 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 Incentive Award.

 

13. NO EVIDENCE OF EMPLOYMENT OR SERVICE

Nothing contained in the Plan or in any Incentive 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 Incentive Award.

 

14. AMENDMENT OF PLAN

The Plan may be modified or amended in any respect by the Committee with the prior approval of the Board. Notwithstanding the foregoing, except as set forth in Section 17, the Plan may not be modified or amended as it pertains to any existing Incentive Award if such

 

9


modification or amendment would materially impair the rights taken as a whole of the applicable Participant under the Plan without the written consent of such Participant.

 

15. WITHHOLDING TAXES

Upon any payment of any Incentive Award, the Company shall have the right at its option and in its sole discretion to (a) 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 payment; (b) deduct from any amount payable to the Participant in respect of the Incentive Award the amount of any taxes which the Company or any Subsidiary may be required to withhold with respect to such payment; or (c) effect such withholding through such other method as the Committee may from time to time approve.

 

16. GOVERNING LAW

All questions concerning the construction, interpretation and validity of the Plan and the instruments evidencing the Incentive Awards granted hereunder shall be governed by and construed and enforced in accordance with the internal 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.

 

17. SECTION 409A

The intent of the parties is that payments and benefits under this Plan be exempt from or comply with Section 409A of the Code, to the extent subject thereto, and accordingly, to the maximum extent permitted, this Plan shall be interpreted and administered to be in compliance therewith. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, a Participant shall not be considered to have terminated employment with the Company for purposes of this Plan unless the Participant would be considered to have incurred a “separation from service” from the Company within the meaning of Section 409A of the Code. Each amount to be paid or benefit to be provided under this Plan shall be construed as a separate identified payment for purposes of Section 409A of the Code, and any payments described in this Plan that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Plan during the six-month period immediately following a Participant’s separation from service shall instead be paid on the first business day after the date that is six months following the Participant’s separation from service (or death, if earlier). The Plan and any Incentive Award Agreements issued thereunder may be amended in any respect deemed by the Board or the Committee to be necessary in order to preserve compliance with, or exemption from, Section 409A of the Code.

 

10


Schedule I

Stock Option Participants: Exceptions to Section 6(a)(2) of the Plan 1

Richard A. Smith

Anthony E. Hull

Kevin J. Kelleher

Alexander E. Perriello III

Bruce G. Zipf

Donald J. Casey

David J. Weaving

Marilyn Wasser

 

1

Exception to apply only to Richard Smith. For purposes of Section 6(a)(2) of the Plan, the number of Stock Options to be granted to Richard Smith as of each Interest Payment Date shall be 50% of the number of Stock Options otherwise determined under Section 6(a)(2) of the Plan.


APPENDIX A

EXAMPLES

Example A. Assumptions :

 

   

Principal amount of Notes owned by the Affiliate Holders equals $1 million.

 

   

Award Amount equals $500.

 

   

In connection with the Initial Valuation Event, Affiliate Holders receive $450,000 in cash and 450,000 shares of common stock.

 

   

In connection with a subsequent Cash Payment Event, one-third of the shares of common stock (150,000 shares) is sold for $300,000.

Results for Example A :

 

   

In connection with the Initial Valuation Event, recipient will receive $225 ($225 bears the same ratio to $500 (45%) as $450,000 bears to $1 million).

 

   

In connection with the Cash Payment Event, recipient will receive $150 ($150 bears the same ratio to $500 (30%) as $300,000 bears to $1 million).

Example B. Assumptions :

 

   

Same as Example A, except that in connection with a second Cash Payment Event, an additional one-third of the shares of common stock (150,000 shares) is sold for $300,000.

Results for Example B :

 

   

In connection with the Initial Valuation Event, recipient will receive $225 (see above).

 

   

In connection with the first Cash Payment Event, recipient will receive $150 (see above).

 

   

In connection with the second Cash Payment Event, recipient will receive $150 ($150 bears the same ratio to $500 (30%) as $300,000 bears to $1 million).

Example C. Assumptions :

 

   

Principal amount of Notes owned by the Affiliate Holders equals $1 million.

 

   

Award Amount equals $500.

 

   

In connection with the Initial Valuation Event, Affiliate Holders receive $400,000 in cash in satisfaction of $500,000 in Notes.

 

   

In connection with a Subsequent Valuation Event, Affiliate Holders receive $450,000 in cash in satisfaction of the remaining $500,000 in Notes.

Results for Example C :

 

   

In connection with the Initial Valuation Event, recipient will receive $200 ($200 bears the same ratio to $500 (40%) as $400,000 bears to $1 million).


   

In connection with the Subsequent Valuation Event, recipient will receive $225 ($225 bears the same ratio to $500 (45%) as $450,000 bears to $1 million).

 

   

Recipient will have no right to receive any additional payments since Affiliate Holders no longer hold any Notes.

Example D. Assumptions :

 

   

Principal amount of Notes owned by the Affiliate Holders equals $1 million.

 

   

Award Amount equals $500.

 

   

Affiliate Holders first receive $90,000 in cash in satisfaction of $100,000 (10%) of Notes (the “ First Transaction ”).

 

   

Affiliate Holders subsequently receive $130,000 in cash in satisfaction of an additional $150,000 (15%) of Notes (the “ Second Transaction ”).

Results for Example D :

 

   

Recipient not entitled to any payment upon completion of First Transaction since Initial Valuation Event Threshold has not been met.

 

   

Completion of Second Transaction constitutes Initial Valuation Event since, when aggregated with First Transaction, the Initial Valuation Event Threshold has been met. The First Transaction is deemed to have occurred on the date of, and to form part of, the Initial Valuation Event.

 

   

In connection with Initial Valuation Event, recipient will receive $110 ($110 bears the same ratio to $500 (22%) as ($90,000 + $130,000) bears to $1 million).

Example E. Assumptions :

 

   

Principal amount of Notes owned by the Affiliate Holders equals $1 million.

 

   

Award Amount equals $500.

 

   

Affiliate Holders convert all Notes into 900,000 shares of common stock. Such conversion constitutes an Initial Valuation Event.

 

   

In connection with a subsequent Cash Payment Event, all of the shares of common stock (900,000 shares) are sold for $1.2 million ($1.33 per share FMV).

Results for Example E :

 

   

In connection with the conversion/Initial Valuation Event, recipient will not receive a payment because the consideration paid to Affiliate Holders did not consist of cash.

 

   

In connection with the Cash Payment Event, recipient will receive $600 ($600 bears the same ratio to $500 (120%) as $1.2 million bears to $1 million).

 

   

If Cash Payment Event occurs after a Qualified Public Offering and in lieu of cash recipient elects to receive stock, recipient would immediately receive 451


 

shares of unrestricted common stock ($600/$1.33) and 68 restricted shares (451*.15) that vest one year post grant.

Example F. Assumptions :

 

   

Principal amount of Notes owned by the Affiliate Holders equals $1 million.

 

   

Award Amount equals $500.

 

   

Participant is listed on Schedule I.

 

   

Affiliate Holders receive an aggregate cash interest payment of $50,000 on an Interest Payment Date with respect to the Notes.

Results for Example F :

 

   

As of the Interest Payment Date, Participant shall be granted a Stock Option with a Black-Scholes value (determined by the Holdings Committee) equal to $25 ($25 bears the same ratio to $500 as $50,000 bears to $1 million).

Exhibit 10.72

CONVERSION SHARES AGREEMENT

This CONVERSION SHARES AGREEMENT (this “ Agreement ”) is made and entered into as of January 5, 2011, by and between Domus Holdings Corp, a Delaware corporation (“ Holdings ”), and Realogy Corporation, a Delaware corporation and Holdings’ indirect wholly owned subsidiary (“ Realogy ”).

WHEREAS, Realogy refinanced certain of its unsecured indebtedness through offers to exchange its 10.50% Senior Notes due 2014, 11.00%/11.75% Senior Toggle Notes due 2014 and 12.375% Senior Subordinated Notes due 2015 for its newly issued (1) 11.00% Series A Convertible Notes due 2018 (the “ Series A Convertible Notes ”), 11.00% Series B Convertible Notes due 2018 (the “ Series B Convertible Notes ”) or 11.00% Series C Convertible Notes due 2018 (the “ Series C Convertible Notes ” and, together with the Series A Convertible Notes and the Series B Convertible Notes, the “ Convertible Notes ”) and/or (2) 11.50% Senior Notes due 2017, 12.00% Senior Notes due 2017 and 13.375% Senior Subordinated Notes due 2018 and solicitation of consents to amend certain provisions of the indentures governing the Existing Notes upon the terms and subject to the conditions set forth in Realogy’s confidential offering memorandum, dated November 30, 2010, as supplemented;

WHEREAS, the Convertible Notes will be convertible at any time at the option of the holders thereof, in whole or in part, into shares of Class A common stock, par value $0.01 per share (“ Class A Common Stock ”), of Holdings in accordance with the terms and conditions of the indenture governing the Convertible Notes (each, a “ Conversion ”) and Realogy is solely obligated to deliver such shares of Class A Common Stock; and

WHEREAS, Holdings desires to agree to issue shares of Class A Common Stock, at Realogy’s option and direction, to Realogy or holders of the Convertible Notes upon any Conversion to facilitate Realogy’s refinancing transactions because of the benefits it receives from Realogy’s debt reduction resulting from such Conversion.

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

1. Delivery of Conversion Shares . Holdings hereby agrees to, from time to time, promptly at Realogy’s option and direction and upon notification of a Conversion, issue, contribute and deliver validly issued, fully paid and nonassessable shares of Class A Common Stock to be delivered upon any Conversion (the “ Conversion Shares ”) to Realogy or issue and deliver validly issued, fully paid and nonassessable Conversion Shares directly to holders of the Convertible Notes upon any Conversion.

 

2.

Conversion Rate Adjustment . Realogy agrees that, before taking any action which would cause an adjustment under the indenture governing the Convertible Notes increasing the rate at which the Convertible Notes are convertible into shares of Class A Common Stock (the “ Conversion Rate ”) to an amount that would cause the related price of such Conversion to be reduced below the then par value, if any,


 

of the shares of Class A Common Stock, Realogy shall notify Holdings and Holdings shall take all corporate action necessary to validly and legally issue shares of such Class A Common Stock at such adjusted Conversion Rate.

 

3. Reservation of Conversion Shares . Holdings hereby represents, warrants and agrees that it has reserved and will reserve such number of authorized but unissued shares of Class A Common Stock in an amount equal to the Conversion Shares as may from time to time be issuable upon any Conversion.

 

4. Remedies . In the event that Holdings fails to deliver the Conversion Shares following written demand by Realogy therefor, Realogy may exercise any right or remedy available to it at law or in equity, including the right to sue for specific performance hereof and to recover from Holdings its out-of-pocket costs incurred in connection with the enforcement of this Agreement, including reasonable attorneys’ fees and expenses incurred before and at trial, at all levels, and whether or not suit is instituted.

 

5. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

6. Entire Agreement . This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, incorporates all prior negotiations and understandings with respect to such subject matter and may be amended solely by an instrument in writing executed by all of the parties.

 

7. Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be an original but all of which together shall constitute but one and the same agreement.

 

8. Assignments; Successors; No Third-Party Rights . No party may assign any of its rights under this Agreement without the prior consent of the other party. Subject to the preceding sentence, this Agreement is intended to bind and inure to the benefit of the parties hereto and their respective successors, assigns, heirs, executors, administrators and representatives. Nothing in this Agreement shall confer any rights or remedies under or by reason of this Agreement on any person or entity other than the parties and their respective successors and assigns, nor shall anything in this Agreement relieve or discharge the obligation or liability of any third person to any party to this Agreement, nor shall any provision of this Agreement give any third person any right of subrogation or action over or against any party to this Agreement.


9. Amendments; Waivers . Any provision of this Agreement may be amended or waived, if, and only if, such amendment or waiver is in writing and signed by each party to this Agreement. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

[Signature Page Follows]


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

 

REALOGY CORPORATION
By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Chief Financial Officer
DOMUS HOLDINGS CORP.
By:   /s/ Anthony E. Hull
Name:   Anthony E. Hull
Title:   Chief Financial Officer

Exhibit 21

SUBSIDIARIES

Access Title LLC (joint venture)

Alpha Referral Network LLC

American Title Company of Houston

Apple Ridge Funding LLC

Apple Ridge Services Corporation

Associated Client Referral LLC

ATCOH Holding Company

Better Homes and Gardens Real Estate Licensee LLC

Better Homes and Gardens Real Estate LLC

Burgdorff LLC

Burgdorff Referral Associates LLC

Burnet Realty LLC

Burnet Title Holding LLC

Burnet Title LLC

Burnet Title of Indiana, LLC (joint venture)

Burrow Escrow Services, Inc.

Career Development Center, LLC

Cartus Asset Recovery Corporation

Cartus Business Answers (No. 2) Plc

Cartus B.V.

Cartus Corporation

Cartus Corporation (Canada)

Cartus Corporation Limited

Cartus Corporation Pte. Ltd.

Cartus Financial Corporation

Cartus Financing Limited

Cartus Funding Limited

Cartus Global Holdings Limited

Cartus Holdings Limited

Cartus India Private Limited

Cartus II Limited

Cartus Limited

Cartus Management Consulting (Shanghai) Co., Ltd.

Cartus Partner Corporation

Cartus Property Services Limited

Cartus Puerto Rico Corporation

Cartus Relocation Canada Company

Cartus Relocation Canada Limited

Cartus Relocation Corporation

Cartus Relocation Hong Kong Limited

Cartus Relocation Limited

Cartus Relocation Pte. Ltd.


Cartus Sarl

Cartus SAS

Cartus Services II Limited

Cartus Services Limited

Cartus UK Plc

CDRE TM LLC

Century 21 Real Estate LLC

CGRN, Inc.

Coldwell Banker Canada Operations ULC

Coldwell Banker Commercial Pacific Properties LLC

Coldwell Banker LLC

Coldwell Banker Pacific Properties LLC

Coldwell Banker Real Estate LLC

Coldwell Banker Real Estate Services LLC

Coldwell Banker Residential Brokerage Company

Coldwell Banker Residential Brokerage LLC

Coldwell Banker Residential Real Estate LLC

Coldwell Banker Residential Referral Network (CA Corp.)

Coldwell Banker Residential Referral Network, Inc. (PA)

Colorado Commercial, LLC

Cornerstone Title Company

Equity Title Company

Equity Title Messenger Service Holding LLC

ERA Franchise Systems LLC

Fairtide Insurance Ltd.

First Advantage Title, LLC (joint venture)

First California Escrow Corporation

First Place Title, LLC (joint venture)

Franchise Settlement Services LLC

Global Client Solutions LLC

Guardian Holding Company

Guardian Title Agency, LLC

Guardian Title Company

Gulf South Settlement Services, LLC

Home Referral Network LLC

J.W. Riker - Northern R.I., Inc.

Jack Gaughen LLC

Kenosia Funding, LLC

Keystone Closing Services LLC

Lakecrest Title, LLC

Lincoln Title, LLC (joint venture)

Market Street Settlement Group LLC

Mercury Title LLC (joint venture)

Metro Title, LLC (joint venture)


Mid-Atlantic Settlement Services LLC

National Coordination Alliance LLC

NRT Arizona Commercial LLC

NRT Arizona LLC

NRT Arizona Referral LLC

NRT Colorado LLC

NRT Columbus LLC

NRT Commercial LLC

NRT Commercial Utah LLC

NRT Development Advisors LLC

NRT Devonshire LLC

NRT Hawaii Referral, LLC

NRT Insurance Agency, Inc.

NRT LLC

NRT Mid-Atlantic LLC

NRT Missouri LLC

NRT Missouri Referral Network LLC

NRT New England LLC

NRT New York LLC

NRT Northfork LLC

NRT Philadelphia LLC

NRT Pittsburgh LLC

NRT Referral Network LLC (DE)

NRT Referral Network LLC (Utah)

NRT Relocation LLC

NRT REOExperts LLC

NRT Settlement Services of Missouri LLC

NRT Settlement Services of Texas LLC

NRT Sunshine Inc.

NRT Texas LLC

NRT Title Services of Maryland, LLC (joint venture)

NRT Utah LLC

ONCOR International LLC

PHH Network Services S.A. de C.V. (Mexico)

Platinum Title & Settlement Services, LLC (joint venture)

Primacy Closing Corporation

Primacy Domestic Quarters, LLC

Primacy Relocation Consulting (Shanghai) Co., Ltd.

Processing Solutions LLC

Progressive Title Company, Inc.

Pu Bai Si (85% owned by Cartus Relocation Hong Kong Limited)

Quality Choice Title LLC (joint venture)

Real Estate Referral LLC

Real Estate Referrals LLC


Real Estate Services LLC

Realogy Blue Devil Holdco LLC

Realogy Cavalier Holdco LLC

Realogy Franchise Group LLC

Realogy Global Services LLC

Realogy Licensing LLC

Realogy Operations LLC

Realogy Services Group LLC

Realogy Services Venture Partner LLC

Referral Associates of New England LLC

Referral Network LLC (FL)

Referral Network Plus, Inc.

Referral Network, LLC (CO)

Riverbend Title, LLC (joint venture)

RT Title Agency, LLC (joint venture)

Secured Land Transfers LLC

Security Settlement Services, LLC (joint venture)

Skyline Title, LLC (joint venture)

Sotheby’s International Realty Affiliates LLC

Sotheby’s International Realty Licensee LLC

Sotheby’s International Realty Referral Company, LLC

Sotheby’s International Realty, Inc.

St. Joe Title Services LLC

St. Mary’s Title Services, LLC (joint venture)

Sunland Title, LLC

TAW Holding Inc.

Texas American Title Company

The Masiello Group Closing Services, LLC (joint venture)

The Sunshine Group (Florida) Ltd. Corp.

The Sunshine Group, Ltd.

Title Resource Group Affiliates Holdings LLC

Title Resource Group Holdings LLC

Title Resource Group LLC

Title Resource Group Services LLC

Title Resource Group Settlement Services, LLC

Title Resources Guaranty Company

Title Resources Incorporated

TRG Services, Escrow, Inc.

TRG Settlement Services, LLP

True Line Technologies LLC (joint venture)

Valley of California, Inc.

Waydan Title, Inc.

West Coast Escrow Company

World Real Estate Marketing LLC


WREM of Arizona LLC

WREM of Idaho LLC

WREM of Maine LLC

WREM of Nevada LLC

WREM, Inc.

Exhibit 31.1

CERTIFICATION

I, Richard A. Smith, certify that:

 

  1. I have reviewed this annual report on Form 10-K of Realogy Corporation;

 

  2. 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;

 

  3. 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;

 

  4. 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:

 

  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b) 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;

 

  c) 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; and

 

  d) 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

 

  5. 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):

 

  a) 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

 

  b) 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: March 4, 2011

/ S /    R ICHARD A. S MITH      
C HIEF E XECUTIVE O FFICER

Exhibit 31.2

CERTIFICATION

I, Anthony E. Hull. certify that:

 

  1. I have reviewed this annual report on Form 10-K of Realogy Corporation;

 

  2. 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;

 

  3. 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;

 

  4. 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:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b. 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;

 

  c. 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; and

 

  d. 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

 

  5. 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):

 

  a. 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

 

  b. 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: March 4, 2011

/ S /    ANTHONY E. HULL        
C HIEF F INANCIAL O FFICER

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 Annual Report of Realogy Corporation (the “Company”) on Form 10-K for the period ended December 31, 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        
R ICHARD A. S MITH
C HIEF E XECUTIVE O FFICER

March 4, 2011

 

/ S /    A NTHONY E. H ULL        
A NTHONY E. H ULL
E XECUTIVE V ICE P RESIDENT A ND
C HIEF F INANCIAL O FFICER

March 4, 2011